nep-ene New Economics Papers
on Energy Economics
Issue of 2020‒01‒20
39 papers chosen by
Roger Fouquet
London School of Economics

  2. Politics of low-carbon transitions: The European Emissions Trading System as a Trojan Horse for climate policy? By Jochen Markard; Daniel Rosenbloom
  3. Public-Private Partnerships Investment in Energy as New Determinant of CO2 Emissions: The Role of Technological Innovations in China By Shahbaz, Muhammad; Raghutla, Chandrashekar; Song, Malin; Zameer, Hashim; Jiao, Zhilun
  4. The Renewable Energy Consumption-Environmental Degradation Nexus in Top-10 Polluted Countries: Fresh Insights from Quantile-on-Quantile Regression Approach By Sharif, Arshian; Mishra, Shekhar; Sinha, Avik; Jiao, Zhilun; Shahbaz, Muhammad; Afshan, Sahar
  5. Does ICT-Trade Openness ensure Energy and Environmental Sustainability? Empirical Evidence from selected South Asian Economies By Murshed, Muntasir
  6. Green transitions and the prevention of environmental disasters : market based vs command-and-control policies By Francesco Lamperti; Mauro Napoletano; Andrea Roventini
  7. Determinants of solar photovoltaic deployment in the electricity mix: Do oil prices really matter? By Margaux ESCOFFIER; Emmanuel HACHE; Valérie MIGNON; Anthony PARIS
  8. Who's winning the low-carbon innovation race? An assessment of countries' leadership in renewable energy technologies By Clément Bonnet; Emmanuel Hache; Gondia Sokhna Seck; Marine Simoen; Samuel Carcanague
  9. COSTOS DE GENERACIÓN, INVERSIÓN Y PRECIOS DEL SECTOR ELÉCTRICO EN MÉXICO By Enriquez, Alejandra; Ramirez, Jose Carlos; Rosellon, Juan
  10. Asymmetric price adjustment and the effects of structural reforms in a low income environment: the case of the gasoline market in Greece By Zacharias Bragoudakis; Dimitrios Sideris
  11. Consumer savings, price, and emissions impacts of increasing demand response in the Midcontinent electricity market By Dahlke, Steven; Prorok, Matt
  12. Does Drawing Down the U.S. Strategic Petroleum Reserve Help Stabilize Oil Prices? By Lutz Kilian; Xiaoqing Zhou
  13. The Role of Aggregators in Facilitating Industrial Demand Response: Evidence from Germany By Jan Stede; Karin Arnold; Christa Dufter; Georg Holtz; Serafin von Roon; Jörn C. Richstein
  14. Challenges for electricity network governance in Energy transitions: Insights from Norway By Dierk Bauknecht; Allan Dahl Andersen; Karoline Dunne
  15. Carbon fueling complex global value chains tripled in the period 1995-2012 By Hertwich, Edgar
  16. Oil Revenues vs Domestic Taxation: Deeper insights into the crowding-out effect By Michael Keller
  17. Oil price Volatility and Exchange rate Dynamics in Nigeria: A Markov Switching Approach By Ilu, Ahmad Ibraheem
  18. Forecasting energy commodity prices: a large global dataset sparse approach By Ferrari, Davide; Ravazzolo, Francesco; Vespignani, Joaquin
  19. Is your valley as green as it should be? Incorporating economic development into environmental performance indicators By Sam, Aflaki; Syed Abul, Basher; Andrea, Masini
  20. Economic Concept of Energy Efficiency By Pillai N., Vijayamohanan; AM, Narayanan
  21. U.S. Monetary Policy Spillovers to GCC Countries: Do Oil Prices Matter? By Olumuyiwa S Adedeji; Erik Roos; Sohaib Shahid; Ling Zhu
  22. Dematerialization Through Services: Evaluating the Evidence By Fix, Blair
  23. The Future of Oil and Fiscal Sustainability in the GCC Region By Tokhir N Mirzoev; Ling Zhu; Yang Yang; Tian Zhang; Erik Roos; Andrea Pescatori; Akito Matsumoto
  24. Energy Efficiency Indicators: Estimation Methods By Pillai N., Vijayamohanan; AM, Narayanan
  25. Service life of building elements: An empirical investigation By Benjamin Volland; Mehdi Farsi; Sébastien Lasvaux; Pierryves Padey
  26. Sharing the Global Benefits of Finite Natural Resource Exploitation: A Dynamic Coalitional Stability Perspective By Stéphane Gonzalez; Fatma Zahra Rostom
  27. Combating climate change with matching-commitment agreements By Molina, Chai; Akcay, Erol; Dieckmann, Ulf; Levin, Simon; Rovenskaya, Elena A.
  28. Can a Growing World Be Fed When the Climate Is Changing? By Simon Dietz; Bruno Lanz
  29. Oil Discoveries and Protectionism By Rick Van der Ploeg; Fidel Perez-Sebastian; Ohad Raveh
  30. Market Functioning & Market Integration in EU Network Industries – Telecommunications, Energy & Transport By Martijn Brons; Fotios Kalantzis; Lucia Vergano
  31. Environmental behaviour and choice of sustainable travel mode in urban areas: comparative evidence from commuters in Asian cities By Kumagai, Junya; Managi, Shunsuke
  32. Policy and market drivers for advancing clean energy By Dahlke, Steven
  33. Is There a Link Between Air Pollution and Impaired Memory? Evidence on 34,000 English Citizens By Powdthavee, Nattavudh; Oswald, Andrew J.
  34. Enhancing Governance for Environmental Sustainability in Sub-Saharan Africa By Simplice A. Asongu; Nicholas M. Odhiambo
  35. Climate change awareness: Empirical evidence for the European Union By Donatella, Baiardi; Claudio, Morana
  36. Effect of temperature on bio-oil fractions of palm kernel shell thermal distillation By Qarizada, Deana; Mohammadian, Erfan; Alias, Azil Bahari; Rahimi, Humapar Azhar
  37. Un climat démocratique? Le rôle de l’opinion publique dans l’adoption de la tarification du carbone dans les provinces canadiennes By Houle, David
  38. Secession with Natural Resources By Dhillon, Amrita; Krishnan, Pramila; Patnam, Manasa; Perroni, Carlo
  39. WTA-WTP disparity: The role of perceived realism of the valuation setting By Frondel, Manuel; Sommer, Stephan; Tomberg, Lukas

  1. By: Rick Van der Ploeg; Armon Rezai
    Abstract: Assets in the fossil fuel industries are at risk of losing market value due to anticipated breakthroughs in renewable technology and governments stepping up climate policies in the light of the Paris commitments to limit global warming to 1.5 or 2 degrees Celsius. Stranded assets arise due to uncertainty about the future timing of these two types of events and substantial intertemporal and intersectoral investment adjustment costs. Stranding of assets mostly affects the 20 biggest oil, gas and coal companies who have been responsible for at least a third of global warming since 1965, but also carbon-intensive industries such as steel, aluminium, cement, plastics and greenhouse horticulture. A disorderly transition to the carbon-free economy will lead to stranded assets and legal claims. Institutional investors should be aware of these financial risks. A broader definition of stranded assets also includes countries reliant on fossil fuel exports and workers with technology-specific skills.
    Keywords: de-carbonisation, policy tipping, technology, stranded assets
    JEL: E62 F41 G11 O33 Q33 Q34 Q35 Q40 Q54
    Date: 2019–12–19
  2. By: Jochen Markard (Department of Management, Technology and Economics, Swiss Federal Institute of Technology Zurich); Daniel Rosenbloom (Department of Political Science, University of Toronto)
    Abstract: Many view carbon pricing as the single best policy approach to address climate change. Such optimism, however, tends to neglect the politics and struggles that surround climate policy and the necessity to accelerate the ongoing low-carbon energy transition. To unveil the multiple facets of political struggles around climate and energy policy, we analyze the responses of key actors to climate-energy consultations in 2015-16 surrounding the EU emissions trading system (ETS) and the EU renewable energy directive. Among other positions, we identify a prominent policy position that contends that climate policy should focus on the ETS given its purported efficiency. Some actors who share this position use the ETS like a Trojan Horse to fend off strict climate action as well as complementary renewable energy policies. Such political strategies do not just undermine carbon pricing but confront the energy transition at large. However, we also find energy industry incumbents that want a much stronger ETS and more effective climate policy. Therefore, it seems that the ‘Trojan Horse strategy’ may fail and the low-carbon transition might gain increasing support from a broad range of constituents. Even so, we argue that any singular climate policy approach risks political capture and that a broad range of policies will be necessary to accelerate the ongoing transition.
    Date: 2020–01
  3. By: Shahbaz, Muhammad; Raghutla, Chandrashekar; Song, Malin; Zameer, Hashim; Jiao, Zhilun
    Abstract: This paper explores the relationship between ‘public-private partnerships investment in energy sector and carbon emissions’ considering the vital role of technological innovations in carbon emissions function for China. In doing so, we apply bootstrapping autoregressive distributed lag modeling (BARDL) for examining the cointegration between carbon emissions and its determinants. The empirical results reveal that public-private partnerships investment in energy impedes environmental quality by increasing carbon emissions. On contrary, technological innovations have negative effect on carbon emissions. The relationship between economic growth and carbon emissions is inverted-U shaped i.e. environmental Kuznets curve hypothesis. Exports are positively linked with carbon emissions. Foreign direct investment impedes environmental quality by stimulating CO2 emissions. The empirical findings provide new insights for policy makers to direct public-private partnerships investment in energy for the betterment of environmental quality in China.
    Keywords: Public-Private Partnerships Investment, Energy, CO2 Emissions, Technological Innovation, China
    JEL: Q5
    Date: 2019–11–02
  4. By: Sharif, Arshian; Mishra, Shekhar; Sinha, Avik; Jiao, Zhilun; Shahbaz, Muhammad; Afshan, Sahar
    Abstract: This empirical examination explored the link between renewable energy utilization and environmental degradation in top-10 polluted countries by using monthly data from 1990-2017. The Quantile-on-Quantile regression (QQ) proposed by Sim and Zhou (2015) and Granger causality in quantiles developed by Troster (2018) are applied. In particular, we examine in what manners, quantiles of renewable energy consumption affect the quantiles of environmental degradation. Our empirical findings unfold overall dependence between renewable energy consumption and ecological deterioration. The findings recommend the presence of a significant negative association between renewable energy consumption and environmental degradation in China, USA, Japan, Canada, Brazil, South Korea and Germany, predominantly in high and low tails but results are totally contrasting in the case of India, Russia and Indonesia. Furthermore, the outcomes of Granger-causality in quantiles conclude a bidirectional causal link between renewable energy consumption and environmental degradation. The empirical findings suggest that governments should need to subsidize green energy in declining ecological degradation.
    Keywords: Renewable Energy; CO2 Emissions; Quantile-on-Quantile (QQ) Approach; Granger-Causality in Quantiles
    JEL: Q5
    Date: 2019–12–15
  5. By: Murshed, Muntasir
    Abstract: Consumption of fossil fuels has triggered worldwide awareness to attain sustainability with respect to ensuring adequate energy access and mitigating environmental adversities, globally. Against this background, this paper aimed at investigating the impacts of enhancing ICT-trade openness on the transition from non-renewable to renewable energy use and carbon dioxide emissions in the context of six South Asian economies. The overall results from the econometric analyses confirm that greater openness to ICT-trade leads to greater consumption of renewable energy, reduces the intensity of energy-use and enhances the access to clean fuel and technology for cooking. However, although ICT trade is found to foster renewable energy consumption across South Asia, it fails to ensure renewable energy transition completely since greater openness to ICT-trade curbs the share of renewables in the aggregate energy consumption figures. Moreover, trade of ICT goods is found to reduce the levels of carbon emissions as well. Thus, these results impose key policy implications for the governments with respect to ensuring energy security alongside environmental sustainability across South Asia.
    Keywords: ICT; renewable energy; non-renewable energy; carbon emissions; cross-sectional dependence
    JEL: Q20
    Date: 2019
  6. By: Francesco Lamperti (Université Panthéon-Sorbonne - Paris 1 (UP1)); Mauro Napoletano (Observatoire français des conjonctures économiques); Andrea Roventini (Observatoire français des conjonctures économiques)
    Abstract: The paper compares the effects of market-based (M-B) and command-and-control (C&C) climate policies on the direction of technical change and the prevention of environmental disasters. Drawing on a model of endogenous growth and directed technical change, we show that M-B policies (carbon taxes and subsidies toward clean sectors) suffer from path dependence and exhibit bounded window of opportunities: delays in their implementation make them ineffective both in redirecting technical change, (i.e. triggering a transition toward clean energy) and in avoiding environmental catastrophes. On the contrary, we find that C&C interventions are favored by path dependence and guarantee policy effectiveness irrespectively of the timing of their introduction. As the hypothesis of path dependence in technological change has received vast empirical support and it is a key feature of many models of growth, we argue that C&C policies should be seen as a valuable and non-equivalent alternative to M-B interventions.
    Date: 2019–12
  7. By: Margaux ESCOFFIER; Emmanuel HACHE; Valérie MIGNON; Anthony PARIS
    Keywords: , Solar photovoltaic, Renewables deployment, Oil prices, Panel smooth transition regression
    Date: 2019
  8. By: Clément Bonnet (IFPEN - IFP Energies nouvelles - IFPEN - IFP Energies nouvelles, EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique); Emmanuel Hache (IFPEN - IFP Energies nouvelles - IFPEN - IFP Energies nouvelles, IRIS - Institut de Relations Internationales et Stratégiques, EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique); Gondia Sokhna Seck (IFPEN - IFP Energies nouvelles - IFPEN - IFP Energies nouvelles); Marine Simoen (IFPEN - IFP Energies nouvelles - IFPEN - IFP Energies nouvelles); Samuel Carcanague (IRIS - Institut de Relations Internationales et Stratégiques)
    Abstract: Intellectual property is a central issue in climate negotiations. On the one hand, it shapes and encourages innovation in low-carbon technologies. On the other hand, it can reduce access to these technologies by giving patent holders market power. We analyse the interactions between climate negotiations and the acquisition of renewable energy technology patents. First, we present the history of climate negotiations, emphasizing the role of technologies. Second, we conduct an empirical analysis aimed at determining which countries could be considered leaders in renewable energy technologies (RETs). Major changes were observed in the geographical distribution of low-carbon innovation during the 2000s, foreshadowing a reorganization of the geopolitical balances of innovation in renewable energies.
    Keywords: Patent data,International relations,energy transition,renewable energy technology,innovation,international relations JEL Classification: Q42,Q55,O31,O38
    Date: 2019–12
  9. By: Enriquez, Alejandra; Ramirez, Jose Carlos; Rosellon, Juan
    Abstract: Electricity prices have seen a consistent upward trend since the implementation of Mexico's electricity market reform (RME). This has been interpreted by some as a failure of the RME. In this paper we study the determinants of such price increases. We calculate the generation cost curve of the Federal Electricity Commission prior to the entry into force of the reform. We then construct daily data on average prices during the REM. We also finally study the relationship between prices and transmission congestion rents. Our main results indicate that the most profitable types of generation technology are the ones resulting from the RME. Likewise, price increases have taken place despite the existence of a considerably larger number of competitors in the generation sector. Lastly, the strong correlation between prices and congestion revenues is evidence that the increase in prices under the RME is mainly due to the growing congestion in the national electricity transmission network rather than due to an inefficient competitive market design in the generation sector.
    Keywords: Electric reform, electric generation, congestion rents, nodal prices, Mexico.
    JEL: D21 D4 D47 L50 L51 Q41
    Date: 2019
  10. By: Zacharias Bragoudakis (Bank of Greece and National and Kapodistrian University of Athens); Dimitrios Sideris (Bank of Greece and Panteion University)
    Abstract: The pricing mechanism in the gasoline market has often been the subject of public debate in Greece during the crisis years. Inefficient pricing could imply oligopolistic practices in the market and losses to consumers’ welfare in a period characterised by a dramatic fall in consumers’ income and standard of living. A way to test whether pricing is efficient in the market is by testing for asymmetries in the adjustment of domestic gasoline prices to world oil price changes. The present paper has two aims: (a) the first is to investigate the existence of asymmetric adjustment of gasoline prices to oil price variations in the Greek market, thus contributing to the relevant literature; (b) the second is to examine whether the structural reforms that took place in the gasoline market and the large fall in income, which characterise consumers’ behaviour in the recent period, had any impact on the pricing dynamics in the market. To this end, the analysis: (i) applies the TAR-ECM threshold cointegration technique, which assumes asymmetric adjustment towards the long-run equilibrium; (ii) makes use of observations at the highest frequency available; and (iii) uses the most recent data. The results provide evidence in favour of symmetric behaviour just for the crisis period. This may reflect competitive behaviour by suppliers who had to interact in a low demand environment and under a new institutional framework following the reforms, along with a change in consumers’ search behaviour who had to deal with a severe fall in their income.
    Keywords: Price asymmetry; Gasoline prices; Crude oil; Threshold cointegration.
    JEL: D43 Q41 Q43 Q48
    Date: 2019–12
  11. By: Dahlke, Steven; Prorok, Matt
    Abstract: This paper estimates consumer savings, CO2 emissions reductions, and price effects from increasing demand response (DR) dispatch in the Midcontinent Independent System Operator (MISO) electricity market. To quantify market effects, we develop a dynamic supply and demand model to explore a range of DR deployment scenarios. The study is motivated by the existence of regulatory and market rule barriers to market-based deployment of DR resources in the MISO region. We show annual consumer savings from increased market-based DR can vary from $1.3 million to $17.6 million under typical peak operating conditions, depending on the amount of DR resources available for market dispatch and the frequency of deployment. Consumer savings and other market effects increase exponentially during atypical periods with tight supply and high prices. Additionally, we find that DR deployment often reduces CO2 emissions, but the magnitude of emissions reductions varies depending on the emissions content of marginal generation at the time and location of deployment. The results of this study suggest regulators and other stakeholders should focus policy efforts to reducing regulatory barriers to DR deployment in wholesale markets, particularly in locations that experience high price spikes, to improve market efficiency and achieve cost savings for consumers.
    Date: 2018–11–30
  12. By: Lutz Kilian; Xiaoqing Zhou
    Abstract: We study the efficacy of releases from the U.S. Strategic Petroleum Reserve (SPR) within the context of fully specified models of the global oil market that explicitly allow for storage demand as well as unanticipated changes in the SPR. Using novel identifying strategies and evaluation methods, we examine seven questions. First, how much have exogenous shocks to the SPR contributed to the variability in the real price of oil? Second, how much would a one-time exogenous reduction in the SPR lower the real price of oil? Third, are exogenous SPR releases partially or fully offset by increases in private sector oil inventories and how does this response affect the transmission of SPR policy shocks? Fourth, how effective were actual SPR policy interventions, consisting of sequences of exogenous changes in the SPR, at lowering the real price of oil? Fifth, are there differences in the effectiveness of SPR emergency drawdowns and SPR exchanges? Sixth, how much did the creation and expansion of the SPR contribute to higher real oil prices? Finally, how much would selling half of the oil in the SPR, as recently proposed by the White House, lower the global price of oil (and hence the U.S. price of motor gasoline) and how much fiscal revenue would it generate?
    Keywords: SPR; crude oil; oil inventories; storage; expectations; policy intervention; fiscal policy
    JEL: Q38 Q43 E62
    Date: 2019–12–20
  13. By: Jan Stede; Karin Arnold; Christa Dufter; Georg Holtz; Serafin von Roon; Jörn C. Richstein
    Abstract: Industrial demand response can play an important part in balancing the intermittent production from a growing share of renewable energies in electricity markets. This paper analyses the role of aggregators – intermediaries between participants and the electricity market – in facilitating industrial demand response. Based on the results from semi-structured interviews with German demand response aggregators, as well as a wider stakeholder online survey, we examine the role of aggregators in overcoming barriers to industrial demand response. We find that a central role for aggregators is to raise awareness for the potentials of demand response, as well as to support implementation by engaging key actors in industrial companies. Moreover, we develop a taxonomy that helps analyse how the different functional roles of aggregators create economic value. We find that there is considerable heterogeneity in the kind of services that aggregators offer, many of which do create significant economic value. However, some of the functional roles that aggregators currently fill may become obsolete once market barriers to demand response are reduced or knowledge on demand response becomes more diffused.
    Keywords: Aggregator, demand response, barriers, function, roles, industry, interview
    JEL: D22 L23 Q40 Q41
    Date: 2020
  14. By: Dierk Bauknecht (Institute for Applied Ecology, Germany); Allan Dahl Andersen (Center for Technology, Innovation and Culture (TIK), Oslo University, Norway); Karoline Dunne (Center for Technology, Innovation and Culture (TIK), Oslo University, Norway)
    Abstract: Once transitions progress beyond the startup phase, niche technologies diffuse more widely to generate important knock-on effects in the focal sector. With this comes a need for moving beyond nurturing niches to embracing a 'whole system perspective'. In the case of the power sector, a whole systems view puts the role of electricity networks more central. This paper analyses how the governance of power networks is challenged by the pending renewable energy transitions. We integrate insights from network regulation studies and transition studies to propose a framework for understanding how energy transition challenges current regulatory thinking and practice. We use the framework for assessing recent attempts at regulatory innovation by the Norwegian network regulator. The paper shows how the established toolbox of network regulation can be amended to tackle innovation and transition. The Norwegian case shows that the network regulator does take up the challenges resulting from the energy transition. Yet it also shows the difficulties of making these new instruments effective. A key issue is the tension between a strong focus on cost-efficiency in the existing regulatory framework, on the one hand, and transformative change on the other.
    Date: 2020–01
  15. By: Hertwich, Edgar (Norwegian University of Science and Technology)
    Abstract: Complex global value chains are those involving more than two countries and imply that a country imports products as capital goods or intermediate inputs to the production of its exports. When tracing the life-cycle greenhouse gas (GHG) emissions of traded products, for example for border carbon adjustments, such emissions are counted at each border crossing. The prevalence and dynamics of this phenomenon have been poorly understood. This paper shows that GHG emissions associated with the production of imports used for producing exports have risen rapidly from 1995, peaking in 2012 and declining slightly to 2016. They now constitute a total of 4.4 PgCO2equ. or 10% of global emissions. The most important exported products in terms of emissions associated with imported inputs are chemicals, vehicles, machinery, and information and communications technology (ICT). Crude petroleum, iron and steel, chemicals, and ICT components are the imported products being used for this export production. A driver analysis indicates that in industrialized countries, the declining domestic value added in exports and increasing share of exports in GDP have contributed most to this development, while in emerging economies, the growth of GDP itself has been an important driving factor, while declines in the energy intensity of export production have provided a weak counterbalance. The importance of transiting carbon raises questions of how climate policies affect industrial competitiveness and how border tax adjustment would account for such emissions.
    Date: 2018–11–29
  16. By: Michael Keller (Department of Economics, University of Sussex, Falmer, United Kingdom)
    Abstract: This paper exploits the 2000s commodity price boom to identify the impact of oil revenues on domestic taxation in oil exporting countries. It estimates the average effect of oil revenues on non-resource taxation for 19 oil exporting countries using synthetic control methodology and finds that non-resource tax per capita is on average 14% lower in oil exporting countries because of the 2000s commodity price boom compared to a scenario without price shock. This result confirms the existing literature concerning the resource revenues vs domestic taxation debate. Additional knowledge is derived from the synthetic control method showing that the effect is heterogeneous and occurs only in oil exporting countries with a low level of institutional quality, which are highly oil dependent and prefer the use of tax instruments rather than non-tax instruments. Furthermore, the dynamics of the effect differs in countries with a state-owned oil sector compared to a private-owned oil sector. These findings are new within the debate and contribute to our understanding of the effect of natural resources on domestic taxation. Policy makers concerned by a crowding-out effect should invest the oil dividend to improve their tax administration to avoid the negative consequences accompanying low domestic taxes such as the resulting dependency on a volatile income stream from oil, difficulty in achieving non-fiscal objectives, and lack of positive externalities from taxes such as transparency and better governance.
    Keywords: Natural resources, oil, oil revenue, tax revenue
    JEL: H2 Q33 Q38
    Date: 2019–12
  17. By: Ilu, Ahmad Ibraheem
    Abstract: The paper examines the spillover effect of crude oil price shocks to exchange rate movement of appreciation and depreciation in Nigeria using monthly data ranging from January 2004- June 2019. The study employed a two stage heteroskedastic Markov switching model. Results from preliminary investigations reveal that both Crude oil prices and exchange rate series are characterized with non- normal distribution, presence of unit root and ARCH effects. Also the BDS, Bai-Perron and Cusum Q tests are conducted to figure out the nonlinearities and structural breaks in the data. The result obtained from the estimated model indicated a positive relationship between oil prices and exchange rate in regime 1(depreciation regime) and negative relationship in regime 2 (appreciation regime). Further analysis reveals that low volatility appreciation regime is more persistent than high volatility deprecation regime with transitional probabilities 0.97 and 0.39 respectively. Consistently the expected duration of stay reveals that duration of stay in the appreciation regime is higher than in the depreciation regime at 35.92 months and 1.6 months respectively. Further, analysis of volatility spillover between oil prices and exchange rate reveals that a rise in oil prices leads to appreciation of the Naira and conversely negative shock in oil prices cause a consequent deprecation of the local currency. Certainly the findings are shall be of utmost relevance to monetary authorities.
    Keywords: Markov switching model, exchange rate, appreciation, deprecation, volatility
    JEL: F31 Q41 Q43
    Date: 2019–12–17
  18. By: Ferrari, Davide (Free University of Bozen-Bolzano, Faculty of Economics and Management, Italy); Ravazzolo, Francesco (Free University of Bozen-Bolzano, Faculty of Economics and Management, Italy); Vespignani, Joaquin (Tasmanian School of Business & Economics, University of Tasmania)
    Abstract: This paper focuses on forecasting quarterly energy prices of commodities, such as oil, gas and coal, using the Global VAR dataset proposed by Mohaddes and Raissi (2018). This dataset includes a number of potentially informative quarterly macroeconomic variables for the 33 largest economies, overall accounting for more than 80% of the global GDP. To deal with the information on this large database, we apply a dynamic factor model based on a penalized maximum likelihood approach that allows to shrink parameters to zero and to estimate sparse factor loadings. The estimated latent factors show considerable sparsity and heterogeneity in the selected loadings across variables. When the model is extended to predict energy commodity prices up to four periods ahead, results indicate larger predictability relative to the benchmark random walk model for 1-quarter ahead for all energy commodities. In our application, the largest improvement in terms of prediction accuracy is observed when predicting gas prices from 1 to 4 quarters ahead.
    Keywords: energy prices, forecasting, Dynamic Factor model, sparse esti- mation, penalized maximum likelihood
    JEL: C1 C5 C8 E3 Q4
    Date: 2019
  19. By: Sam, Aflaki; Syed Abul, Basher; Andrea, Masini
    Abstract: Sustainability rankings are receiving increasing attention by the academic and the policy making communities because of their potential to influence environmental legislation and reshape competitive landscapes. Unfortunately, most of the indicators used to produce these rankings do not take into account economic development and tend to be biased in favor of richer countries. To circumvent this limitation we develop a novel, rigorous and simple metric that ranks countries by their potential environmental performance relative to their wealth; in other words, by the degree of sustainability that a country should achieve, given its level of affluence. We apply our approach to measure the sustainability level of 15 developed economies with respect to the share of renewable energy sources in their electricity generating portfolios. The resulting ranking produces changes in the perceived greenness of certain countries. If adopted, it would allow these countries to increase their bargaining power in international negotiations. It would also alter the pressure faced by their governments to implement or discontinue environmental policies such as feed-in tariffs. Although we applied it at the country level and in the context of renewable energy, the method has far-reaching implications and it can also be used to compare corporate sustainability levels.
    Keywords: Sustainability indicators; renewable energy; environmental rankings; panel data
    JEL: C23 Q20 Q56
    Date: 2019–11–23
  20. By: Pillai N., Vijayamohanan; AM, Narayanan
    Abstract: Though energy efficiency is traditionally defined in terms of two basically reciprocal indicators, as energy intensity (energy use per unit of activity output), and as energy productivity (activity output per unit of energy input), the concept is a context-specific one, not necessarily equivalent to energy savings, and is usually defined as net benefits (useful output) per unit of energy use, but without an unequivocal operationally useful quantitative measure. This necessitates construction of a series of indicators specific to the context (or level of sectoral disaggregation). It is generally believed that energy consumption is essentially determined by three effects, viz., activity, referring to economic or human activity level (output/income produced, population/households supported, passenger-km travelled, etc), structure referring to the composition of activity (shares of different sectors or subsectors of human/economic activities) and energy intensity, the quantum of energy required to deliver one unit of economic/human activity. The exact definitions and units of these factors are in turn determined by the level of aggregation. The present paper documents the definitions and units of these three effects.
    Keywords: Economic concept, energy efficiency, energy productivity, aggregation level, activity, structure, intensity
    JEL: Q40 Q43 Q48
    Date: 2019–11
  21. By: Olumuyiwa S Adedeji; Erik Roos; Sohaib Shahid; Ling Zhu
    Abstract: This paper provides empirical evidence that the size of the spillovers from U.S. monetary policy to non-oil GDP growth in the GCC countries depends on the level of oil prices. The potential channels through which oil prices could affect the effectiveness of monetary policy are discussed. We find that the level of oil prices tends to dampen or amplify the growth impact of changes in U.S. monetary policy on the non-oil economies in the GCC.
    Date: 2019–12–27
  22. By: Fix, Blair (York University)
    Abstract: Dematerialization through services is a popular proposal for reducing environmental impact. The idea is that by shifting from the production of goods to the provision of services, a society can reduce its material demands. But do societies with a larger service sector actually dematerialize? I test the `dematerialization through services' hypothesis with a focus on fossil fuel consumption and carbon emissions --- the primary drivers of climate change. I find no evidence that a service transition leads to carbon dematerialization. Instead, a larger service sector is associated with greater use of fossil fuels and greater carbon emissions per person. This suggests that `dematerialization through services' is not a valid sustainability policy.
    Date: 2019–03–12
  23. By: Tokhir N Mirzoev; Ling Zhu; Yang Yang; Tian Zhang; Erik Roos; Andrea Pescatori; Akito Matsumoto
    Abstract: The oil market is undergoing fundamental change. New technologies are increasing the supply of oil from old and new sources, while rising concerns over the environment are seeing the world gradually moving away from oil. This spells a significant challenge for oil-exporting countries, including those of the Gulf Cooperation Council (GCC) who account for a fifth of the world’s oil production. The GCC countries have recognized the need to reduce their reliance on oil and are all implementing reforms to diversify their economies as well as fiscal and external revenues. Nevertheless, as global oil demand is expected to peak in the next two decades, the associated fiscal imperative could be both larger and more urgent than implied by the GCC countries’ existing plans.
    Keywords: Fiscal policy;Oil exporting countries;Gulf Cooperation Council (GCC);Fiscal policy;Oil-exporting countries
  24. By: Pillai N., Vijayamohanan; AM, Narayanan
    Abstract: Traditionally, there are two basically reciprocal energy efficiency indicators: one, in terms of energy intensity, that is, energy use per unit of activity output, and the other, in terms of energy productivity, that is, activity output per unit of energy use. A number of approaches characterize the efforts to measure these indicators. The present paper attempts at a a comprehensive documentation of some of the analytical methods of such measurement. We start with a comprehensive list of the estimation methods of energy productivity indicators. Note that the methods fall under three heads: traditional single factor productivity analysis, decomposition analysis and multi-factor productivity analysis. The paper takes up each of these in detail, starting with the traditional indicators identified by Patterson to monitor changes in energy efficiency in terms of thermodynamic, physical-thermodynamic, economic-thermodynamic and economic indicators. When we analyze the indicator in terms of energy intensity changes, the corresponding index falls under two major decomposition methods, namely, structural decomposition analysis and index decomposition analysis. The structural decomposition analysis is discussed in terms of its two approaches, viz., input-output method and neo-classical production function method; and the index decomposition analysis in terms of Laspeyres’ and Divisia indices. In the multi-factor productivity approach, we consider the parametric and non-parametric methods, viz., stochastic frontier model and data envelopment analysis respectively.
    Keywords: Energy efficiency, measures, index decomposition, Divisia index, stocastic frontier, data envelopment
    JEL: C1 C13 Q40 Q49
    Date: 2019–11
  25. By: Benjamin Volland; Mehdi Farsi; Sébastien Lasvaux; Pierryves Padey
    Abstract: Improvements in building's energy-efficiency hold considerable potential for decreasing energy consumption. Yet, renovations in the building stock could occur belatedly and without the coordination required for fully tapping the energy reduction potentials. In this paper, we use data from a household survey in Switzerland to analyse replacement patterns for windows, heating systems, façades and roofs. As opposed to most previous studies that assume a linear age effect, we model the renovation probability as a conditional hazard rate with a more flexible representation of age effects. We compare the renovation patterns identified by the survival analysis with the service lives determined by building norms. We find systematic deviations between the two, suggesting sub-optimal replacement in many cases, especially for the building envelope. In particular, the results point to a considerable fraction of cases, where the owners refrain from renovation far beyond the end of an element's technical service life. Moreover, the strong differences in renovation timing across various elements could hinder the expected energy savings. We identify a number of determinants for replacement timing, in view of energy policies aiming at the promotion of energy-saving renovations in buildings.
    Keywords: Renovation patterns, Survival analysis, Hazard models, Switzerland.
    JEL: D10 Q40 Q48
    Date: 2020–01
  26. By: Stéphane Gonzalez (Univ Lyon, UJM Saint-Etienne, GATE UMR 5824, F-42023 Saint- Etienne); Fatma Zahra Rostom (Université Paris 1, Centre d’Economie de la Sorbonne, Chaire Energie et Prospérité)
    Abstract: The article explores the implications of natural resource scarcity in terms of global cooperation and trade. We investigate whether there exist stable international long-term agreements that take into account the disparities between countries in terms of geological endowments and productive capacity, while caring about future generations. For that purpose, we build an original cooperative game framework, where countries can form coalitions in order to optimize their discounted consumption stream in the long-run, within the limits of their stock of natural resources. We use the concept of the recursive core that satisfies both coalitional stability and time consistency. We show that this set is nonempty, stating that an international long-term agreement along the optimal path will be self-enforcing. The presented model can be viewed as a tool to refresh the common look at the North-South opposition and sets the conceptual framework for the exploration of a fair sharing of the fruits of global economic growth.
    Keywords: Non-renewable natural resources, Cooperative games, Recursive core
    JEL: C71 C61 F42 Q20 Q32 Q56
    Date: 2019
  27. By: Molina, Chai; Akcay, Erol (University of Pennsylvania); Dieckmann, Ulf; Levin, Simon; Rovenskaya, Elena A.
    Abstract: Countries generally agree that global greenhouse gas emissions are too high, but prefer other countries reduce emissions rather than reducing their own. The Paris Agreement is intended to solve this collective action problem, but is likely insufficient. One proposed solution is a matching-commitment agreement, through which countries can change each other’s incentives by committing to conditional emissions reductions, before countries decide on their unconditional reductions. Here, we study matching-commitment agreements between two heterogeneous countries. We find that such agreements (1) incentivize both countries to make matching commitments that in turn incentivize efficient emissions reductions, (2) reduce emissions from those expected without an agreement, and (3) increase both countries’ welfare. Matching-commitment agreements are attractive because they do not require a central enforcing authority and only require countries to fulfil their promises; countries are left to choose their conditional and unconditional emissions reductions according to their own interests.
    Date: 2018–10–05
  28. By: Simon Dietz; Bruno Lanz
    Abstract: We study the capacity to meet food demand under conditions of climate change, economic and population growth. We take a novel approach to quantifying climate impacts, based on a model of the global economy structurally estimated on the period 1960 to 2015. The model integrates several features necessary to study the problem, including an explicit agriculture sector, endogenous fertility, directed technical change and fossil/renewable energy. We estimate the world economy is more than one trillion dollars smaller, and world population more than 80 million smaller, than would have been the case without climate change. This is despite substantial adaptation having taken place in general equilibrium through R&D and agricultural land expansion. Policy experiments with the model suggest that optimal GHG taxes are high and future temperatures held well below 2°C.
    Keywords: adaptation, agricultural productivity, climate change, directed technical change, energy, food security, economic growth, population growth, structural estimation
    JEL: C51 O13 O44 Q54
    Date: 2019
  29. By: Rick Van der Ploeg; Fidel Perez-Sebastian; Ohad Raveh
    Abstract: Can oil discovery shocks affect the demand for protectionism? A two-period model of Dutch disease indicates that if the tradable sector is politically dominant then an oil discovery induces protectionism. If the economy is also credit constrained, this effect is intensified upon discovery, but partially reversed when oil revenues start to flow. We test these predictions using detailed bilateral tariff data that cover 96 products in 155 countries over the period 1988-2012, and worldwide discoveries of giant oil and gas fields. Our identification strategy rests on the exogeneity of the timing of discoveries. We find that an oil discovery increases tariffs during pre-production years and decreases tariffs in the years to follow yet to a lesser extent, most notably in capital scarce economies with a relatively dominant tradable sector. Our baseline estimates indicate that a giant oil field discovery induces a rise of approximately 15% in the average tariff over the course of 10 years; this increase is about 1.8 times larger during the pre¬production period when the oil discovery represents a pure news shock.
    Keywords: Oil discoveries, protectionism, capital scarcity, Dutch disease, political economy, trade policy, news shocks
    JEL: Q32 F13 O24
    Date: 2019–12–19
  30. By: Martijn Brons; Fotios Kalantzis; Lucia Vergano
    Abstract: This paper provides a comparative assessment of market functioning and market integration in EU Member States in network industries, i.e. telecommunications, energy and transport sectors. The first section assesses Member States’ progress in market opening and competition and highlights potential market distortions that can hinder the proper functioning of these markets. The analysis shows that over the last years overall improvements in the regulatory and competitive environment was achieved, especially in the telecommunications sector. However, additional efforts are needed, especially in some Member States. The second section empirically investigates whether any relevant price convergence across Member States took place in the EU network industries. Econometric results show that prices converged to the mean in all analysed subsectors. However, in some Member States country-specific factors prevented prices in each of the sectors from fully converging to the same level. The speed of convergence was higher in the transport and energy subsectors and lower in the telecommunications sector.
    JEL: C13 D47 L90
    Date: 2019–09
  31. By: Kumagai, Junya; Managi, Shunsuke
    Abstract: Promoting pro-environmental travel modes is an important strategy for sustainable transportation. Previous studies have shown a positive relationship between environmental awareness and environmentally friendly travel modes, but very few studies have considered pro-environmental behaviour and choice of travel mode, particularly in the context of non-Western countries. This study examines the impact of pro-environmental behaviour on the choice of commuting mode in Tokyo, Beijing, Shanghai and Singapore using original survey data. We use the Multiple Indicator Multiple Cause model to construct latent variables of environmentally friendly behaviours. The multinomial logistic regression results indicate that 1) pro-environmental activities and commuting mode choice are unrelated in Tokyo and Singapore, 2) recycling and energy-savings activities are positively related to commuting by bicycle/on foot in Beijing, and 3) participants in organized pro-environmental activities are less likely to use pro-environmental commuting modes in Beijing and Shanghai. The results provide supporting evidence of the habit discontinuity hypothesis and suggest a possible substitution effect between environmentally friendly travel mode choice and other environmental activities.
    Keywords: Sustainable transportation; environmental behaviour; travel demand; commuting; Asian cities
    JEL: R41
    Date: 2019–12–10
  32. By: Dahlke, Steven
    Abstract: This chapter reviews important policies and market trends shaping the global development of clean energy technologies. Stimulus policies in the form of feed-in tariffs, tax relief, and renewable portfolio standards along with substantial research & development enabled clean energy projects to overcome early commercialization barriers. As a result, clean energy project costs are now competitive with or lower than conventional fossil fuels in most markets around the world. Policymakers and energy consumers are responding by increasing clean energy targets to high levels approaching 100% in a growing number of jurisdictions. Business models are adapting to this new environment and energy market structures are evolving to enable successful operations of high renewable energy systems. Markets structures, policies, and technologies that enhance system flexibility for efficient renewable energy integration represent the most promising future area of research in this field.
    Date: 2019–12–10
  33. By: Powdthavee, Nattavudh (University of Warwick); Oswald, Andrew J. (University of Warwick)
    Abstract: It is known that people feel less happy in areas with higher levels of nitrogen dioxide NO2 (MacKerron and Mourato, 2009). What else might air pollution do to human wellbeing? This paper uses data on a standardized word-recall test that was done in the year 2011 by 34,000 randomly sampled English citizens across 318 geographical areas. We find that human memory is worse in areas where NO2 and PM10 levels are greater. The paper provides both (i) OLS results and (ii) instrumental-variable estimates that exploit the direction of the prevailing westerly wind and levels of population density. Although caution is always advisable on causal interpretation, these results are concerning and are consistent with laboratory studies of rats and other non-human animals. Our estimates suggest that the difference in memory quality between England’s cleanest and most-polluted areas is equivalent to the loss of memory from 10 extra years of ageing.
    Keywords: Memory, air, pollution, particulates JEL Classification: NO2, PM10,
    Date: 2019
  34. By: Simplice A. Asongu (Yaoundé/Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa)
    Abstract: This study assesses whether improving governance standards affects environmental quality in 44 countries in sub-Saharan Africa for the period 2000-2012. The empirical evidence is based on Generalised Method of Moments. Bundled and unbundled governance dynamics are used notably: (i) political governance (consisting of political stability and “voice & accountability†); (ii) economic governance (entailing government effectiveness and regulation quality), (iii) institutional governance (represented by the rule of law and corruption-control) and (iv) general governance (encompassing political, economic and institutional governance dynamics). The following hypotheses are tested: (i) Hypothesis 1 (Improving political governance is negatively related to CO2 emissions); (ii) Hypothesis 2 (Increasing economic governance is negatively related to CO2 emissions) and (iii) Hypothesis 3 (Enhancing institutional governance is negatively related to CO2 emissions. Results of the tested hypotheses show that: the validity of Hypothesis 3 cannot be determined based on the results; Hypothesis 2 is not valid while Hypothesis 1 is partially not valid. The main policy implication is that governance standards need to be further improved in order for government quality to generate the expected unfavorable effects on CO2 emissions.
    Keywords: CO2 emissions; Governance; Economic development; Sustainable development; Africa
    JEL: C52 O38 O40 O55 P37
    Date: 2019–01
  35. By: Donatella, Baiardi; Claudio, Morana
    Abstract: In this paper we assess public attitudes on climate change in Europe over the last decade. Based on aggregate …gures from the Special Eurobarometer surveys on Climate Change, we …nd that climate change attitudes have evolved according to the "S-shaped" ”information dissemination model, conditional to various socioeconomic and climatological factors. In particular, we fi…nd that environmental awareness is directly related to per capita income, social trust, secondary education, the physical distress associated with hot weather and damages caused by extreme weather episodes. It is also inversely related to greenhouse gas emissions and tertiary education. Moreover, consistent with our epidemics narrative, we find a negative impact for Donald Trump’s denial campaigns, yet a positive, larger effect for Greta Thunberg’s environmental activism. In terms of policy implications, this paper calls on the EU to take the vacant leadership in the climate change fight and to make a declaration of climate emergency. It also calls on teachers to introduce their students to climate change, leading journals of communication of science-related topics to grant the largest possible access to any climate change article they publish and public institutions to protect climate change evidence from politicization. This paper finally calls for a strict coordination of monetary and fiscal policies, to allow the green bonds market to rapidly growth to the size required for the implementation of effective climate change mitigation policies.
    Keywords: climate change, environmental attitude, green bonds, mitigation policy, EU
    JEL: Q50 Q54 Q58
    Date: 2020–01
  36. By: Qarizada, Deana; Mohammadian, Erfan; Alias, Azil Bahari; Rahimi, Humapar Azhar
    Abstract: Distillation is an essential thermo chemical process; it mainly depends on temperature which affects mostly the product yield and composition. The aim of this research is to investigate the effect of temperature on the characterization of bio-oil liquid fraction derived from palm kernel shell (PKS) bio-oil. The temperatures were 100 °C and 140°C. The higher heating value (HHV) obtained were 28.6MJ/Kg and 31.5MJ/Kg for bio-oil fraction 100°C and 140°C respectively. The GC- MS analysis determined that phenol is the dominant product in bio-oil fractions.
    Keywords: Fast pyrolysis, thermal distillation, palm kernel shell, biomass, bio-fuel
    JEL: Z00
    Date: 2018–10–14
  37. By: Houle, David (Governmental sector)
    Abstract: Dans le contexte canadien, les gouvernements provinciaux jouent un rôle important dans l’élaboration des politiques de lutte aux changements climatiques, notamment par leurs efforts de mise en œuvre de mécanismes de tarification du carbone. Cet ensemble diversifié d’instruments de politiques publiques vise à imposer un prix sur les émissions de gaz à effet de serre (GES) avec l’objectif d’inciter les consommateurs et les entreprises à tenir compte de l’impact de leurs décisions sur le climat. L’intérêt des gouvernements provinciaux en matière de protection du climat n’est pas nouveau. Les premiers plans d’action provinciaux dans ce domaine datent de 1995. À l’époque, après avoir considéré l’adoption d’une taxe carbone dans les années 1990s (Macdonald et coll., 2011), le gouvernement fédéral libéral avait annoncé un ensemble d’actions en changements climatiques afin de mettre en œuvre le Protocole de Kyoto, ratifié par le Premier Ministre Jean Chrétien en décembre 2002 (Harrison, 2007). Durant cette période, les actions fédérales en matière de protection du climat culminèrent par la publication, le 16 juillet 2005, de l’Avis d’intention pour réglementer les émissions des gaz à effet de serre qui sont produites par les grands émetteurs finaux, une réglementation visant les grandes entreprises et qui incluait plusieurs mécanismes de tarification du carbone . L’élection d’un gouvernement fédéral conservateur en 2006 changea la donne de manière fondamentale. Pour plusieurs observateurs et dirigeants provinciaux, il semblait maintenant peu probable que le gouvernement fédéral s’engage sur la voie de la tarification du carbone. L’approche privilégiée par le nouveau gouvernement fédéral était celle d’une réglementation sectorielle, basée sur des normes réglementaires traditionnelles (une approche parfois d’écrite comme ‘command-and-control’) consistant essentiellement à fixer des cibles d’émission que les industries devaient respecter sans que des mécanismes de flexibilité (par exemple, des permis échangeables) soit disponibles. Bien que des négociations aient été entamées avec de nombreux secteurs industriels (Munroe, 2016), seulement deux secteurs ont été réglementés, celui des transports et des centrales au charbon (Commissaire à l’environnement, 2012). C’est dans ce contexte que les provinces, de plus en plus au fait des impacts des changements climatiques sur leur territoire et des opportunités économiques créées par la croissance des industries vertes, devinrent plus actives en matière de changements climatiques. Elles craignaient moins, comme cela était le cas sous les précédents gouvernements fédéraux de Jean Chrétien et Paul Martin, un possible dédoublement de leurs efforts avec ceux du fédéral (Houle et coll., 2014, Houle, 2015). Certains gouvernements provinciaux incluant le Québec, l’Ontario, la Colombie-Britannique, le Manitoba, et l’Alberta adoptèrent des approches innovatrices en matière de changements climatiques. Simultanément, ces provinces firent preuve d’une préférence en faveur de la tarification du carbone, qui constitua un élément central de leur politique climatique, via l’adoption de taxes sur le carbone ainsi que de systèmes d’échange de droits d’émission (Houle, 2015). De manière inattendue, l’adoption de ces instruments peut être observée autant dans les provinces où une majorité de la population supporte la tarification du carbone que dans celles où seulement une minorité d’électeurs s’expriment en sa faveur. Doit-on en conclure que les décideurs publics ne tiennent pas compte de l’opinion publique sur la question de la tarification du carbone? Ce chapitre va explorer cette question tout d’abord en définissant la tarification du carbone et montrant le momentum à l’échelle international en faveur de son adoption. Par la suite, pour comprendre le lien entre l’opinion publique et l’émergence de la tarification du carbone dans le contexte canadien nous examinons tout d’abord l’évolution de l’opinion publique à ce sujet et, en particulière, les différences interprovinciales. La dernière section de ce chapitre propose des études de cas, en commençant par celui de la Colombie-Britannique où la taxe carbone instaurée dans cette province fit l’objet d’une intense controverse, surtout pendant les élections provinciales de 2009. Nous comparons ensuite cette campagne électorale avec d’autres élections provinciales de cette période, notamment celles de l’Ontario de 2011 et du Québec en 2012. Ces comparaisons nous permettent de constater, lorsqu’elles sont associées aux observations des données d’opinion publique, que le manque de support initial pour la tarification du carbone n’a, règle générale, empêcher les gouvernements provinciaux de s’engager dans cette voie.
    Date: 2019–01–18
  38. By: Dhillon, Amrita (Kings College, London); Krishnan, Pramila (University of Oxford); Patnam, Manasa (CREST-ENSAE); Perroni, Carlo (University of Warwick)
    Abstract: We look at the formation of new Indian states in 2001 to uncover the effects of political secession on the comparative economic performance of natural resource rich and natural resource poor areas. Resource rich constituencies fared comparatively worse within new states that inherited a relatively larger proportion of natural resources. We argue that these patterns reflect how political reorganisation affected the quality of state governance of natural resources. We describe a model of collusion between state politicians and resource rent recipients that can account for the relationships we see in the data between natural resource abundance and post-breakup local outcomes.
    Keywords: Natural Resources and Economic Performance, Political Secession, Fiscal Federalism JEL Classification: D72, H77, O13
    Date: 2020
  39. By: Frondel, Manuel; Sommer, Stephan; Tomberg, Lukas
    Abstract: Based on a survey among more than 5,000 German households and a single-binary choice experiment in which we randomly split the respondents into two groups, this paper elicits both households' willingness to pay (WTP) for power supply security and their willingness to accept (WTA) compensations for a reduced security level. In accord with numerous empirical studies, we find that the mean WTA value substantially exceeds the mean WTP bid, in our empirical example by a factor of 3.56. Yet, the WTA-WTP ratio decreases to 2.35 among respondents who believe that the hypothetical valuation setting is likely to become true. Conversely, the WTA-WTP ratio increases to 3.81 among respondents who deem the setting unlikely. On the basis of these results, we conclude that inquiring about respondents' perception of the realism of the valuation setting is an easy-to-implement and promising survey element to mitigate excessive WTA-WTP disparities, particularly if private or quasi-public goods are under scrutiny.
    Keywords: willingness-to-pay,willingness-to-accept,stated preferences
    JEL: D12 H41 Q41
    Date: 2019

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