nep-ene New Economics Papers
on Energy Economics
Issue of 2020‒02‒24
twenty-two papers chosen by
Roger Fouquet
London School of Economics

  1. Too Much Energy : The Perverse Effect of Low Fuel Prices on Firms By Cali,Massimiliano; Cantore,Nicola; Iacovone,Leonardo; Pereira Lopez,Mariana De La Paz; Presidente,Giorgio
  2. Developing Zero-Emission Bus and Truck Markets Will Require a Mix of Financial Incentives, Sale Mandates, and Demonstration Projects By Burke, Andrew; Miller, Marshall
  3. Factors Affecting Demand for Plug-in Charging Infrastructure: An Analysis of Plug-in Electric Vehicle Commuters By Tal, Gil PhD; Chakraborty, Debapriya PhD; Jenn, Alan PhD; Lee, Jae Hyun PhD
  4. Zero-Emission Medium- and Heavy-duty Truck Technology, Markets, and Policy Assessments for California By Burke, Andrew PhD; Miller, Marshall PhD
  5. Does energy efficiency predict mortgage performance? By Guin, Benjamin; Korhonen, Perttu
  6. Looking Back at Fifty Years of the Clean Air Act By Joseph E. Aldy; Maximilian Auffhammer; Maureen L. Cropper; Arthur G. Fraas; Richard Morgenstern
  7. How does the EU ETS reform impact allowance prices? The role of myopia, hedging requirements and the Hotelling rule By Bocklet, Johanna; Hintermayer, Martin
  9. Credit Cycles in Countries in the MENA Region -- Do They Exist ? Do They Matter? By Aghabarari,Leila; Rostom,Ahmed Mohamed Tawfick
  10. Magnitude and Distribution of Electricity and Water Subsidies for Households in Addis Ababa, Ethiopia By Cardenas,Helena; Whittington,Dale
  11. KGEMM: A Macroecnometric Model for Saudi Arabia By Fahkri Hasanov; Fred Joutz; Jeyhun Mikayilov; Muhammad Javid
  12. Pollution, Mortality and Time Consistent Abatement Taxes By Aditya Goenka; Lin Liu; William Pouliot
  13. Inflated Expectations and Commodity Prices: Evidence from Kazakhstan By Girard, Victoire; Kudebayeva, Alma; Toews, Gerhard
  14. Conflict, Household Victimization, and Welfare : Does the Perpetrator Matter ? By Kaila,Heidi Kristiina; Azad,M Abul Kalam
  15. US Monetary Policy, Oil and Gold Prices: Which has a greater impact on BRICS Stock Markets? By Md Gyasuddin Ansari; Rudra Sensarma
  16. Lights Off, Lights On : The Effects of Electricity Shortages on Small Firms By Hardy,Morgan L.; Mccasland,Jamie Lee
  17. Wirtschaftspolitische Herausforderungen 2020 By Sebastian Dullien; Sebastian Gechert; Alexander Herzog-Stein; Christoph Paetz; Katja Rietzler; Ulrike Stein; Silke Tober; Andrew Watt
  18. Analyse bibliométrique de la publication : "How to use Big Data technologies to optimize operations in Upstream Petroleum Industry" By Abdelkader Baaziz
  19. Going Green in China: Firms’ Responses to Stricter Environmental Regulations By Fan, Haichao; Graff Zivin, Joshua; Kou, Zonglai; Liu, Xueyue; Wang, Huanhuan
  20. I Spot, I Adopt! Peer Effects and Visibility in Solar Photovoltaic System Adoption of Households By Rode, Johannes; Müller, Sven
  21. Improving Oil Price Forecasts by Sparse VAR Methods By Krüger, Jens; Ruths Sion, Sebastian
  22. Just Released: Hints of Increased Hardship in America’s Oil-Producing Counties By Joelle Scally; Wilbert Van der Klaauw; Donghoon Lee; Andrew F. Haughwout

  1. By: Cali,Massimiliano; Cantore,Nicola; Iacovone,Leonardo; Pereira Lopez,Mariana De La Paz; Presidente,Giorgio
    Abstract: This paper provides novel evidence on the impact of changes in energy prices on manufacturing performance in two large developing economies -- Indonesia and Mexico. It finds that unlike increases in electricity prices, which harm plants'performance, fuel price hikes result in higher productivity and profits of manufacturing plants. The results of instrumental variable estimation imply that a 10 percent increase in fuel prices would lead to a 3.3 percent increase in total factor productivity for Indonesian and 1.2 percent for Mexican plants. The evidence suggests that effects are driven by the incentives that fuel price increases provide to plants towards replacing inefficient fuel-powered with more productive electricity-powered capital equipment. These results help to re-evaluate the policy trade-off between reducing carbon emissions and improving economic performance, particularly in countries with large fuel subsidies such as Indonesia and Mexico.
    Keywords: Energy Policies&Economics,Energy and Mining,Energy and Environment,Energy Demand,Food&Beverage Industry,Common Carriers Industry,Construction Industry,Business Cycles and Stabilization Policies,General Manufacturing,Plastics&Rubber Industry,Pulp&Paper Industry,Textiles, Apparel&Leather Industry,International Trade and Trade Rules,Oil Refining&Gas Industry
    Date: 2019–10–10
  2. By: Burke, Andrew; Miller, Marshall
    Abstract: California has a number of programs intended to encourage the introduction of zero- and near-zero emission vehicle (ZEV) technologies into the medium- and heavy-duty truck markets. Meeting the goals of these programs will require the sale of large numbers of battery-electric and hydrogen fuel cell transit buses and trucks by 2025 and beyond. However, several barriers to widespread adoption of these technologies will need to be addressed, including their purchase price, utility, durability and reliability, as well as the cost of energy and the availability of refueling infrastructure. Policies such as mandates or incentives will likely be necessary to overcome these barriers and the uncertainty of adopting a new, unproven technology. These policies must make economic sense to both the bus and truck manufacturers and the vehicle purchasers if they are to be successful in the long term. To gain a better understanding of the financial barriers for ZEV bus and truck adoption, researchers at UC Davis conducted technology and cost assessments for batteryelectric and fuel cell vehicles in the medium- and heavy-duty truck sector. High-level findings and the policy implications of this research are summarized in this brief.
    Keywords: Engineering, Zero emission vehicles, electric vehicles, fuel cell vehicles, heavy duty vehicles, medium trucks, buses, operating costs, incentives, policy analysis
    Date: 2020–01–01
  3. By: Tal, Gil PhD; Chakraborty, Debapriya PhD; Jenn, Alan PhD; Lee, Jae Hyun PhD
    Abstract: The public sector and the private sector, which includes automakers and charging network companies, are increasingly investing in building charging infrastructure to encourage the adoption and use of plug-in electric vehicles (PEVs) and to ensure that current facilities are not congested. However, building infrastructure is costly and, as with road congestion, when there is significant uptake of PEVs, we may not be able to “build out of congestion.” We modelled the choice of charging location that more than 3000 PEV drivers make when given the options of home, work, and public locations. Our study focused on understanding the importance of factors driving demand such as: the cost of charging, driver characteristics, access to charging infrastructure, and vehicle characteristics. We found that differences in the cost of charging play an important role in the demand for charging location. PEV drivers tend to substitute workplace charging for home charging when they pay a higher electricity rate at home, more so when the former is free. Additionally, socio-demographic factors like dwelling type and gender, as well as vehicle technology factors like electric range, influence the choice of charging location.
    Keywords: Engineering, Electric vehicle charging, electric vehicles, energy consumption, costs, demand, workplaces, dwellings, choice models, energy storage systems
    Date: 2020–01–01
  4. By: Burke, Andrew PhD; Miller, Marshall PhD
    Abstract: This report assesses zero emissions medium- and heavy-duty vehicle technologies, their associated costs, projected market share, and possible policy mandates and incentives to support their adoption. Cost comparisons indicate that battery-electric transit buses and city delivery trucks are the most economically attractive of the zero-emission vehicles (ZEVs) based on their break-even mileage being a small fraction of the expected total mileage. These ZEVs using fuel cells are also attractive for a hydrogen cost of $5/kg. The most economically unattractive vehicle types for ZEV adoption are long-haul trucks and inter-city buses. Developing mandates for buses and trucks will be more difficult than for passenger cars for several reasons, including the large differences in the size and cost of the vehicles and the ways they are used in commercial, profit-oriented fleets. The best approach will be to develop separate mandates for classes of vehicles that have similar sizes, cost characteristics, use patterns, and ownership/business models. These mandates should be coupled to incentives that vary by vehicle type/class and by year or accumulated sales volume, to account for the effects of expected price reductions with time.
    Keywords: Education, Zero emission vehicles, electric vehicles, fuel cell vehicles, heavy duty vehicles, medium trucks, buses, operating costs, incentives, policy analysis
    Date: 2020–01–01
  5. By: Guin, Benjamin (Bank of England); Korhonen, Perttu (Qatar Financial Centre Regulatory Authority)
    Abstract: We examine a unique micro-level data set on residential mortgages in the United Kingdom. Our analyses suggest that mortgages against energy-efficient properties are less frequently in payment arrears than mortgages against energy-inefficient properties. This result is robust when controlling for other relevant determinants of mortgage default including borrower income and the loan to value ratio of the mortgage. We conclude that energy efficiency is a relevant predictor of mortgage defaults.
    Keywords: Credit risk; energy efficiency; green mortgages
    JEL: G21 Q40
    Date: 2020–01–31
  6. By: Joseph E. Aldy; Maximilian Auffhammer; Maureen L. Cropper; Arthur G. Fraas; Richard Morgenstern
    Abstract: Since 1970, transportation, power generation, and manufacturing have dramatically transformed as air pollutant emissions have fallen significantly. To evaluate the causal impacts of the Clean Air Act on these changes, we synthesize and review retrospective analyses of air quality regulations. The geographic heterogeneity in regulatory stringency common to many regulations has important implications for emissions, public health, compliance costs, and employment. Cap-and-trade programs have delivered greater emission reductions at lower cost than conventional regulatory mandates, but policy practice has fallen short of the cost-effective ideal. Implementing regulations in imperfectly competitive markets have also influenced the Clean Air Act’s benefits and costs.
    JEL: Q53 Q54 Q58
    Date: 2020–01
  7. By: Bocklet, Johanna (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)); Hintermayer, Martin (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI))
    Abstract: This paper uses a discrete-time partial equilibrium model of the European Emissions Trading System (EU ETS) to analyze the impact of the recent reform on allowance prices. By including bounded rationality such as myopia or hedging requirements, we find that the Hotelling price path is no longer visible ex-post even though the Hotelling price rule holds ex-ante in the decision making of the firms. Myopia and hedging requirements have little impact in the pre-reform market but strongly drive market outcomes after the reform. In the post-reform market, hedging requirements in combination with restrictive allowance supply may even cause a physical shortage of allowances. Yet, neither form of bounded rationality can fully explain the market outcomes in the third trading period of the EU ETS. If myopia and edging requirements are considered simultaneously, the price increase in the EU ETS can be attributed to the reform fundamentals.
    Keywords: Dynamic Optimization; EU ETS; Bounded Rationality; Hotelling; Hedging; Myopia
    JEL: D91 H32 Q58
    Date: 2020–02–19
  8. By: Hassan Hakimian (Hamad Bin Khalifa University)
    Abstract: A copious literature on resource curse correlates oil rents with poor economic outcomes in resource-rich economies. The common yardstick for evaluating economic performance in these countries is generally GDP growth rates. This paper focuses on the broader question of whether the oil-exporters in the MENA region in general and in the GCC states in particular have been successful in turning their hydrocarbon wealth for the benefit of their population at large. To find out if their experience has been conducive to 'inclusive growth', we compute a novel Inclusive Growth Index and its associated rankings for 154 countries to shed light on their performance both over time and in a comparative context. The results show a marked deterioration in the case of MENA’s oil-exporting countries over the period 2001-5 and 2006- 10 particularly marred by a poor record in job creation, especially for their young population.
    Date: 2019–12–20
  9. By: Aghabarari,Leila; Rostom,Ahmed Mohamed Tawfick
    Abstract: This paper estimates private sector credit cycles for most of the oil-importing and oil-exporting countries in the Middle East and North Africa. Credit cycles are the medium-term component in spectral analysis of real private sector credit growth. In addition, the paper estimates the credit cycles for several Western countries and Japan. The analysis finds substantial differences and rare similarities between credit cycles in the Middle East and North Africa and developed countries. Over 1964-2017, credit cycles in the Middle East and North Africa do not appear to be associated with real gross domestic product growth. They only explain a fraction of the growth in private sector credit, and they do not seem to be synchronized across oil exporters and oil importers.
    Keywords: Banks&Banking Reform,Oil&Gas,Macroeconomic Management,Economic Conditions and Volatility
    Date: 2019–11–19
  10. By: Cardenas,Helena; Whittington,Dale
    Abstract: In Addis Ababa, an increasing block tariff has been used to calculate households'monthly bills for electricity and water services. This study estimates the magnitudes of the combined water and electricity subsidies received by households with private connections to the electricity grid and piped water network in 2016, and it evaluates the distribution of these subsidies among wealth groups. Customer billing data supplied by utility companies are matched with socioeconomic information collected through a household survey. It is the first detailed analysis of the combined effects of increasing block tariffs for electricity and water in an urban area in a developing country. The results show that the combined subsidies are large. The average household receives a subsidy of US$26 per month, about 6 percent of household income. The findings also show that electricity and water subsidies under the increasing block tariff disproportionately accrue to richer households, with even less targeting when both sectors are considered jointly. The poorest quintile receives 12 percent of the total subsidies for electricity and water services, while the richest quintile receives 31 percent. The water increasing block tariff's targeting of subsidies was somewhat worse than that of the electricity increasing block tariff.
    Keywords: Hydrology,Water Supply and Sanitation Policy, Legislation and Regulation,Economic Assistance,Services&Transfers to Poor,Access of Poor to Social Services,Energy Policies&Economics,Disability,Small Private Water Supply Providers,Water and Human Health,Environmental Engineering,Sanitary Environmental Engineering,Water Supply and Sanitation Economics,Engineering,Sanitation and Sewerage,Town Water Supply and Sanitation
    Date: 2019–09–26
  11. By: Fahkri Hasanov; Fred Joutz; Jeyhun Mikayilov; Muhammad Javid (King Abdullah Petroleum Studies and Research Center)
    Abstract: The KAPSARC Global Energy Macroeconometric Model (KGEMM), is a policy analysis tool for examining the impacts of domestic policy measures and global economic and energy shocks on the Kingdom of Saudi Arabia.
    Keywords: Autometrics, Energy Price Reform, Equillibrium correction, General to Specific Modeling Strategy, Macroeconomics, Vision 2030
    Date: 2020–02–13
  12. By: Aditya Goenka (University of Birmingham); Lin Liu (University of Liverpool); William Pouliot (University of Birmingham)
    Abstract: We study dynamically consistent policy in a neoclassical overlapping generations growth model where pollution externalities undermine health but are mitigated via tax-financed abatement. With arbitrarily constant taxation, two steady states arise: an unstable 'poverty trap' and a 'neoclassical' steady state near which the dynamics might either be monotonically convergent or oscillating. When the planner chooses a time consistent abatement path that maximises a weighted intergenerational sum of expected utility, the optimal tax is zero at low levels of capital and then a weakly increasing function of the capital stock. The non-homogeneity of the tax function along with its feedback effect on savings induces additional steady states, stability reversals and oscillations.
    Keywords: Time consistency, pollution, mortality, overlapping generations model, poverty traps, endogenous fluctuations, optimal environmental policy.
    JEL: O11 O13 O23 O44 E32 H21 H23
    Date: 2019–10
  13. By: Girard, Victoire; Kudebayeva, Alma; Toews, Gerhard
    Abstract: We document that an oil price boom triggers dissatisfaction with one's income, and that this dissatisfaction is independent of the effect of the boom on real economic conditions. Unique data from Kazakhstan allows us to exploit time, sectoral and spatial variation to identify the impact of the recent oil boom on reported satisfaction with income. Oil related households { whose heads are employed in the private sector of the oil rich districts { report a decrease in satisfaction with their income during the boom compared to other households (whose heads work in other sectors and/or districts). The estimated drop in satisfaction is statistically and economically significant: a 20% increase in the price of oil decreases satisfaction with income by 1/3 of a standard deviation. We discuss different interpretations of this drop in satisfaction. The only interpretation consistent with our results is that an oil price boom creates a gap between people's expectations of the benefits from the boom and the observed economic conditions. Our results call for devoting more attention to the dynamic of satisfaction, not only during resource busts, but also during resource booms.
    Keywords: Expectations,Labor Conflict,Oil boom,Resource Curse,Satisfaction
    JEL: J52 N55 Q33 Q34
    Date: 2020
  14. By: Kaila,Heidi Kristiina; Azad,M Abul Kalam
    Abstract: This paper studies the relationship between conflict and household welfare by using a detailed panel data set of household victimization across the most conflict-affected regions in Nigeria between 2010 and 2017, during a time characterized by a sharp increase in conflict. The North East region has been hardest hit with the recent Boko Haram insurgency. The North Central region has seen clashes between herders and farmers over land and resources. Several militant groups operate in the oil-producing Niger Delta region, where their aim is to extract resources by disrupting oil production. By exploiting the plausibly exogenous variation in the timing, intensity, and spatial distribution of victimization, this study finds that becoming a victim of conflict leads to higher food insecurity and decreased consumption. Since different types of actors have different motivations for their actions, the consequences of victimization might vary depending on the perpetrator. The study finds that events perpetrated by insurgents are the most detrimental to consumption, whereas food insecurity increases as a consequence of insurgent and criminal activity. This is in line with the results being strongest in the North East, which also has the highest intensity of conflict. The study also finds that property-related events are more detrimental to consumption and food insecurity than are violent events. Likewise, it finds suggestive evidence that violent events, as well as events perpetrated by insurgents and bandits, are detrimental to mental health. The findings highlight the importance of collecting nuanced information on victimization in conflict-affected areas.
    Date: 2019–09–17
  15. By: Md Gyasuddin Ansari (Indian Institute of Management Kozhikode); Rudra Sensarma (Indian Institute of Management Kozhikode)
    Abstract: This paper examines the effect of US monetary policy, oil price and gold price on stock indices of BRICS countries. Vector Auto Regression model is applied to study the stock indices of all BRICS countries as a group overthe period 1996-2018. We find that the Bombay Sensex responds positively to the Federal Funds Rate. The stock index of South Africa—FTSE JSE of Johannesburg—responds negatively to shocks in oil price while stock indices of Russia and Brazil—RTSI of Moscow and BVSP of Sao Paulo respectively—respond positively to gold price changes. We provide managerial and policy implications of these results.
    Keywords: Monetary Policy; Stock Indices; Gold Price;Brent Crude; Federal Fund Rate
  16. By: Hardy,Morgan L.; Mccasland,Jamie Lee
    Abstract: Entrepreneurs in developing countries report that unreliable electricity imposes a serious constraint, yet little evidence exists on how blackouts impact the micro firms that account for the majority of employment. This paper estimates the effects of outages on small firms using original firm-level panel data and finds evidence of differential effects by firm size. Firms without employees experience large reductions in revenues and profits. Outages have no measurable effect on the output of firms with employees, where worker hours increase, weekly wages paid decrease, and the analysis fails to reject that blackouts have no effect on (average firm-level) worker hourly wages.
    Date: 2019–12–19
  17. By: Sebastian Dullien; Sebastian Gechert; Alexander Herzog-Stein; Christoph Paetz; Katja Rietzler; Ulrike Stein; Silke Tober; Andrew Watt
    Abstract: Die deutsche Wirtschaft befindet sich in einem konjunkturellen Abschwung. Zugleich werden strukturelle Herausforderungen durch die anstehende Dekarbonisierung deutlich, die auf nationaler und auch auf EU-Ebene enorme Anstrengungen erfordern. Eine wohlstandssichernde Klimawende bedarf massiver Investitionen. In Deutschland müssen ohnehin öffentliche Investitionen in Infrastruktur nachgeholt werden. Diese sollten zumindest teilweise kreditfinanziert werden. Eine entsprechende Änderung der deutschen und EU-Fiskalregeln ist überfällig. Darüber hinaus ist eine wirksame CO2-Bepreisung notwendig, kombiniert mit Maßnahmen des sozialen Ausgleichs. Der Europäische Green Deal der neuen EU-Kommission und das Klimapaket der deutschen Regierung gehen grundsätzlich in die richtige Richtung. Das Klimapaket ist allerdings deutlich zu zaghaft, beim Green Deal ist die konkrete Umsetzung noch offen. Eine grünere Politik der EZB sollte die allgemeine Wirtschaftspolitik flankieren.
    Keywords: Wirtschaftspolitische Herausforderungen, Konjunktur, EZB,
    Date: 2020
  18. By: Abdelkader Baaziz (AMU - Aix Marseille Université, IMSIC - Institut mediterranéen des sciences de l'information et de la communication - AMU - Aix Marseille Université - UTLN - Université de Toulon)
    Abstract: Bien que publiée dans une revue relativement récente (référencée dans WoS comme source émergente), notre publication a eu un impact fort auprès des chercheurs de divers champs disciplinaires tant en sciences humaines qu'en sciences de l'ingénieur. Ceci souligne sa portée pluridisciplinaire dont l'objectif principal est de jouer un rôle de médiation scientifique et technique auprès des chercheurs et professionnels appartenant à un spectre pluridisciplinaire le plus large possible. Un objectif que nous estimons atteint au vu des résultats de cette étude bibliométrique.
    Keywords: médiation scientifique et technique,pluridisciplinarité
    Date: 2020–01–01
  19. By: Fan, Haichao; Graff Zivin, Joshua; Kou, Zonglai; Liu, Xueyue; Wang, Huanhuan
    Date: 2019–12–01
  20. By: Rode, Johannes; Müller, Sven
    Date: 2020–01–14
  21. By: Krüger, Jens; Ruths Sion, Sebastian
    Abstract: In this paper we document the results of a forecast evaluation exercise for the real world price of crude oil using VAR models estimated by sparse (regularization) estimators. These methods have the property to constrain single parameters to zero. We find that estimating VARs with three core variables (real price of oil, index of global real economic activity, change in global crude oil production) by the sparse methods is associated with substantial reductions of forecast errors. The transformation of the variables (taking logs or differences) is also crucial. Extending the VARs by further variables is not associated with additonal gains in forecast performance as is the application of impulse indicator saturation before the estimation.
    Date: 2019–12
  22. By: Joelle Scally; Wilbert Van der Klaauw; Donghoon Lee; Andrew F. Haughwout
    Abstract: Today, the New York Fed released the Quarterly Report on Household Debt and Credit for the first quarter of 2016. Overall debt saw one of its larger increases since deleveraging ended, while delinquency rates for the United States continued to improve and remain at very low levels. Although the overall picture of Americans? liabilities has continued to improve since the financial crisis, we wondered what the variation looks like at local levels. One advantage of our Consumer Credit Panel (CCP), which is based on Equifax credit data, is that we can examine geographic variation in debt and delinquency rates. Here, we use the CCP to examine the borrowing and delinquency in oil-producing geographies in the United States, where the economic trends since the Great Recession have been very different from those in the rest of the country.
    Keywords: Credit; delinquency; Energy
    JEL: R3 D1

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