nep-ene New Economics Papers
on Energy Economics
Issue of 2020‒03‒02
fifty papers chosen by
Roger Fouquet
London School of Economics

  1. Stranded Assets in the Transition to a Carbon-Free Economy By Rick van der Ploeg; Armon Rezai
  2. Lessons from Power Sector Reforms : The Case of Morocco By Usman,Zainab; Amegroud,Tayeb
  3. Economy-wide benefits and costs of local-level energy transition in Austrian Climate and Energy Model Regions By Thomas Schinko; Birgit Bednar-Friedl; Barbara Truger; Rafael Bramreiter; Nadejda Komendantova; Michael Hartner
  4. IPCC baseline scenarios over-project CO2 emissions and economic growth By Burgess, Matthew G.; Ritchie, Justin; Shapland, John; Pielke, Roger Jr
  5. Uncertainty, Innovation, and Infrastructure Credits: Outlook for the Low Carbon Fuel Standard Through 2030 By Bushnell, James PhD; Mazzone, Daniel; Smith, Aaron; Witcover, Julie
  6. Beneficios económicos y ambientales de la energía nuclear By Juárez-Luna, David
  7. Do Improved Biomass Cookstoves Reduce PM2.5 Concentrations ? If So, for Whom ? Empirical Evidence from Rural Ethiopia By Bluffstone,Randall; LaFave,Daniel; Mekonnen,Alemu; Dissanayake,Sahan; Beyene,Abebe Damte; Gebreegziabher,Zenebe; Toman,Michael A.
  8. Nexus between Energy Consumption, Economic Development, and CO2 Emissions: Empirical Evidence from Morocco By Harkat, Tahar
  9. Modeling Risk Contagion in the Italian Zonal Electricity Market By Daniel Felix Ahelegbey; Emmanuel Senyo Fianu; Luigi Grossi
  10. Coase and Cap-and-Trade: Evidence on the Independence Property from the European Electricity Sector By Aleksandar Zaklan
  11. Global Tariffs and CO2 By Klotz, Richard; Sharma, Rishi
  12. Where did the time (series) go? Estimation of marginal emission factors with autoregressive components By Filippo Beltrami; Andrew Burlinson; Luigi Grossi; Monica Giulietti; Paul Rowley; Grant Wilson
  13. Decreasing market value of variable renewables is a result of policy, not variability By T. Brown; L. Reichenberg
  14. Text-based crude oil price forecasting By Yun Bai; Xixi Li; Hao Yu; Suling Jia
  15. Strategic interactions and price dynamics in the global oil market By Álvarez, Irma Alonso; Di Nino, Virginia; Venditti, Fabrizio
  16. Pulled or pushed? The spatial diffusion of wind energy between local demand and supply By Marcel Bednarz; Tom Broekel
  17. PCA forecast averaging - predicting day-ahead and intraday electricity prices By Katarzyna Maciejowska; Bartosz Uniejewski; Tomasz Serafin
  18. Iraq: Private ownership of oil and the quest for democracy Revisited By Razzak, Weshah
  19. Selfish Bureaucrats and Policy Heterogeneity in Nordhaus’ DICE By Richard S.J. Tol
  20. Oil Price Shocks and Civil Conflict: Evidence from Nigeria By Arinze Nwokolo
  21. Beating the naive: Combining LASSO with naive intraday electricity price forecasts By Grzegorz Marcjasz; Bartosz Uniejewski; Rafal Weron
  22. Resources, Conflict, and Economic Development in Africa By Achyuta Adhvaryu; James Fenske; Gaurav Khanna; Anant Nyshadham
  23. Adding Carbon to the Equation in Online Flight Search By Amenta, Nina; Sanguinetti, Angela
  24. Designing a sequential testing procedure for verifying global CO2 emissions By Mikkel Bennedsen
  25. Pollution Regulations, Air Quality, and the Local Economy By Chen, Ying
  26. Energy costs and competitiveness in Europe By Ivan Faiella; Alessandro Mistretta
  27. Financing Low-Carbon Transitions through Carbon Pricing and Green Bonds By Heine,Dirk; Semmler,Willi; Mazzucato,Mariana; Braga,Joao Paulo; Flaherty,Michael; Gevorkyan,Arkady; Hayde,Erin Kate; Radpour,Siavash
  28. Embroidering resistance : Daily struggles of women affected by the Baixo Iguaçu Hydropower Dam in Paraná, South Brazil By Rusansky, T.
  29. Paying Attention to Profitable Investments : Experimental Evidence from Renewable Energy Markets By Coville,Aidan; Orozco Olvera,Victor Hugo; Reichert,Arndt Rudiger
  30. European industrial eco-efficiency under different pollutants' scenarios and heterogeneity structures. Is there a definite direction? By Kounetas, Konstantinos; Stergiou, Eirini
  31. Optimism on Pollution-Driven Disasters and Asset Prices By Shiba Suzuki; Hiroaki Yamagami
  32. Environmental Taxes and Productivity: Lessons from Canadian Manufacturing By Akio Yamazaki
  33. Stability and Evolution of Preferences for Improved Cookstoves -- A Difference-in-Difference Analysis of a Choice Experiment from Ethiopia By Dissanayake,Sahan T. M.; Voigt,George; Cooper, Abbie; Beyene, Abebe Damte; Bluffstone,Randall; Gebreegziabher,Zenebe; LaFave, Daniel; Martinsson,Peter; Mekonnen,Alemu; Toman,Michael A.
  34. Losing in a Boom: Long-term Consequences of a Local Economic Shock for Female Labour Market Outcomes By Bennett, Patrick; Ravetti, Chiara; Wong, Po Yin
  35. Lower Oil Prices and U.S. Economic Activity By Jan J. J. Groen; Patrick Russo
  36. Cooperation in a dynamic setting with asymmetric environmental valuation and responsibility By Francisco Cabo; Mabel Tidball
  37. Recomendaciones para una política integral de precios de los energéticos (diésel, gasolina, GLP, jet, gas natural, energía eléctrica, biocombustibles y carbón) y sus implicaciones fiscales, sociales, ambientales y energéticas aplicable en Colombia para la By Astrid Martínez; José Arcos; Juan Benavides; Henry Garay; Ricardo Lloreda; Juan Mauricio Ramírez; David Riaño; Eduardo Uribe
  38. Does Becoming Richer Lead to a Reduction in Natural Resource Consumption? An Empirical Refutation of the Kuznets Material Curve By Dorothée Charlier; Florian Fizaine
  39. Measures to Enhance the Effectiveness of International Climate Agreements: The Case of Border Carbon Adjustments By Alaa Al Khourdajie; Michael Finus
  40. The climate risk for the finance in Italy By Ivan Faiella; Danila Malvolti
  41. Republic of Congo; Selected Issues By International Monetary Fund
  42. Europe’s alternative: a Green Industrial Policy for sustainability and convergence By Lucchese, Matteo; Pianta, Mario
  43. Environmental regulation and productivity growth: main policy challenges By Roberta De Santis; Cecilia Jona Lasinio; Piero Esposito
  45. Nachbesserungen beim Klimapaket richtig, aber immer noch unzureichend – CO2-Preise stärker erhöhen und Klimaprämie einführen By Stefan Bach; Niklas Isaak; Lea Kampfmann; Claudia Kemfert; Nicole Wägner
  46. Power infrastructure and income inequality: evidence from Brazilian state-level data using dynamic panel data models By Victor Medeiros; Rafael S. M. Ribeiro
  47. Innovative Learning Environments : The Role of Energy--Efficient Investments in Russian Preschool Education Facilities (A Case Study of the Khanty-Mansyisk Region) By Shmis,Tigran; Chugunov,Dmitry; Ustinova,Maria; Kotnik,Jure
  48. Effects of rural electrification on employment: A comment on Dinkelman (2011) By Bensch, Gunther; Gotz, Gunnar; Peters, Jörg
  49. The enhancement of resilience to disasters and climate change in the Caribbean through the modernization of the energy sector By Flores, Adrián; Peralta, Leda
  50. Autonomous Vehicles as Services: a systemic model with application to the EVRA experimentations By Fabien Leurent

  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
  2. By: Usman,Zainab; Amegroud,Tayeb
    Abstract: Morocco charted its own distinctive path of power sector reform. It selectively introduced private sector participation for generation capacity expansion and electricity distribution, while retaining a strong, state-owned and vertically-integrated national power utility operating as a single buyer at the core of the sector. Until recently, the country eschewed an independent regulatory entity. The power sector has been guided by strong top-down policy mandates that have served to align the disparate actions of political parties and sector institutions. Ambitious targets for electricity access, liberalization, and renewable energy investments were conceived as an integrated approach to contribute to economic development by relieving fiscal pressures, reducing external dependence on fossil fuels, and positioning the country as a regional leader in renewable energy. The results have been impressive. Since 1990, Morocco has more than tripled its power supply, while growing renewable energy to account for one-third of the total and relying on the private sector to supply just over half of the electricity generated. Rural electrification has accelerated rapidly from 18 percent in 1995 to virtually 100 percent in 2017. While operational efficiency has been broadly adequate, performance has fluctuated over time. Moreover, the sector?s achievements through this selective approach to reform have come somewhat at the expense of the financial viability of the incumbent utility, the National Office for Electricity and Water (ONEE), which has suffered from lack of cost-reflective tariff-setting and an array of entrenched cross-subsidies. Other vulnerabilities include the continued but declining dependence on electricity imports, external price volatilities of imported fossil fuels, and a territorialized electricity distribution model that could be disrupted by grid integration of renewable energy.
    Keywords: Energy Policies&Economics,Energy and Mining,Energy and Environment,Energy Demand,Renewable Energy,Rural and Renewable Energy,Power&Energy Conversion,Energy Sector Regulation
    Date: 2019–08–07
  3. By: Thomas Schinko (International Institute for Applied Systems Analysis (IIASA), Austria); Birgit Bednar-Friedl (University of Graz, Austria); Barbara Truger (University of Graz, Austria); Rafael Bramreiter (University of Graz, Austria); Nadejda Komendantova (University of Graz, Austria); Michael Hartner (Energy Economics Group, TU Wien, Austria)
    Abstract: To achieve a low-carbon transition in the electricity sector, countries combine national-scale policies with regional renewable electricity (RES-E) initiatives. Taking Austria as an example, we investigate the economy-wide effects of implementing national-level feed-in tariffs alongside local-level ‘climate and energy model (CEM) regions’, taking account of policy externalities across the two governance levels. We distinguish three types of CEM regions by means of a cluster analysis and apply a sub-national Computable General Equilibrium (CGE) model to investigate two RES-E scenarios. We find that whether the net economic effects are positive or negative depends on three factors: (i) RES-E potentials, differentiated by technology and cluster region; (ii) economic competitiveness of RES-E technologies relative to each other and to the current generation mix; and (iii) support schemes in place which translate into policy costs. We conclude that the focus should mainly be on economically competitive technologies, such as PV and wind, to avoid unintended macroeconomic side-effects. To achieve that, national support policies for RES-E have to be aligned with regional energy initiatives.
    Keywords: energy transition; computable general equilibrium (CGE); national support policies; regional energy initiatives; policy externality
    JEL: Q42 R13 C68
    Date: 2020–02
  4. By: Burgess, Matthew G.; Ritchie, Justin; Shapland, John; Pielke, Roger Jr
    Abstract: Scenarios used by the Intergovernmental Panel on Climate Change (IPCC) are central to climate science and policy. A recent Nature commentary found observed trends and International Energy Agency (IEA) projections of global CO2 emissions substantially diverging from high-emission scenarios such as RCP8.5, which are often treated as equivalent to ‘business as usual’ in climate research and assessment. Here, we quantify the bases for this divergence by comparing “baseline” (or “no policy”) scenario projections of key fossil-fuel CO2 emission drivers to observations from 2005-2017, and also to projections through 2040 from world energy outlooks. We find most of the baseline scenarios used in the Fifth (AR5) and designed for the forthcoming Sixth (AR6) IPCC Assessment Reports have over-projected per-capita GDP growth—severely in most developing regions, and slightly in other regions—and have slightly over-projected carbon intensity (CO2 emissions/primary energy) in most regions. These baseline scenarios will likely continue to over-project carbon intensity through 2040 and beyond, in part due to unrealistic assumptions about fossil-fuel expansion. Long-term economic growth outlooks lack consensus among economists, but we argue that most of these baseline scenarios will likely continue over-projecting per-capita GDP to at least 2040 due to inertia. Our results inform the rapidly evolving discussion on uses of scenarios in climate science and policy.
    Date: 2020–02–18
  5. By: Bushnell, James PhD; Mazzone, Daniel; Smith, Aaron; Witcover, Julie
    Abstract: California’s low carbon fuel standard (LCFS) specifies that the state’s transportation fuel supply achieve a 20% reduction in carbon intensity (CI) below 2011 levels by 2030. Reaching the standard will require substantive changes in the fuel mix, but the specifics and the cost of these changes are uncertain. We assess if and how California is likely to achieve the standard, and the likely impact of infrastructure credits on this compliance outlook. We begin by projecting a distribution of fuel and vehicle miles demand under business-as-usual economic and policy variation and transform those projections into a distribution of LCFS net deficits for the entire period from 2019 through 2030. We then construct a variety of scenarios characterizing LCFS credit supply that consider different assumptions regarding input markets, technological adoption over the compliance period, and the efficacy of complementary policies. In our baseline scenario for credit generation, LCFS compliance would require that between 60% and 80% of the diesel pool be produced from biomass. Our baseline projections have the number of electric vehicles reaching 1.3 million by 2030, but if the number of electric vehicles reaches Governor Jerry Brown’s goal of 5 million by 2030, then LCFS compliance would require substantially less biomass-based diesel. Outside of rapid zero emission vehicle penetration, compliance in 2030 with the $200 credit price may be much more difficult. New mechanisms to allow firms to generate credits by building electric vehicle charging stations or hydrogen fueling stations have minor implications for overall compliance because the total quantity of infrastructure credits is restricted to be relatively small.
    Keywords: Engineering, Biomass fuels, hydrogen fuels, energy resources, renewable energy sources, greenhouse gases, carbon taxes, incentives, zero emission vehicles, low carbon fuel standards
    Date: 2020–02–01
  6. By: Juárez-Luna, David
    Abstract: The objective of this article is to evaluate the economic and environmental benefits of nuclear energy. To do so, we calculate the efficient participation of nuclear energy in portfolios of three base loading technologies. In this way, the economic and environmental benefits of nuclear energy are obtained by comparing its efficient participation, with its participation in the current national portfolio. The analysis suggests that the participation of the nuclear power plant should increase in a range from 284% to 810%. Which implies a reduction of the Total Levelized Cost of Generation with Externalities (CTNGE, in Spanish) of the portfolio between $ 4.06 and $ 15.34; a significant reduction in CO2 emissions, and; a participation of Clean Energies in the Mexican national electricity generation that ranges from 35.39% to 58.01%. There are several limitations to the increase in the participation of the nuclear power plant, mainly technical, such as construction time of a nuclear power plant.
    Keywords: Nuclear energy, CO2 Emissions, Generation, Electricity, Efficient Portfolios.
    JEL: D81 G11 Q40 Q53
    Date: 2020–02–03
  7. By: Bluffstone,Randall; LaFave,Daniel; Mekonnen,Alemu; Dissanayake,Sahan; Beyene,Abebe Damte; Gebreegziabher,Zenebe; Toman,Michael A.
    Abstract: Improved biomass cookstoves have been promoted as important intermediate technologies to reduce fuelwood consumption and possibly cut household air pollution in low-income countries. This study uses a randomized controlled trial to examine household air pollution reductions from an improved biomass cookstove promoted in rural Ethiopia, the Mirt improved cookstove. This stove is used to bake injera, which is very energy intensive and has a very particular cooking profile. In the overall sample, the Mirt improved cookstove leads to only minor reductions in mean household air pollution (10 percent on average). However, for those who bake injera in their main living areas, the Mirt improved cookstove reduces average mean household air pollution by 64 percent and median household air pollution by 78 percent -- although the resulting household air pollution levels are still many times greater than the World Health Organization's guideline. These large percentage reductions may reflect decreased emissions due to less use of fuelwood, given Mirt's energy-efficient design, and the likelihood that higher-emissions three-stone cooking is moved outside the main living area once a Mirt improved cookstove is installed. Households in the subsample who experience a greater decline in household air pollution tend to be less wealthy and more remotely located and burn less-preferred biomass fuels, like agricultural waste and animal dung, than households that cook in a separate area.
    Keywords: Health Care Services Industry,Energy Demand,Energy and Mining,Energy and Environment,Pollution Management&Control,Air Quality&Clean Air,Brown Issues and Health,Global Environment,Disease Control&Prevention
    Date: 2019–06–28
  8. By: Harkat, Tahar
    Abstract: Existing literature that assesses the nexus between economic development, primary energy consumption, and CO2 emissions has been a point of interest for many scholars. Yet, there is no such existing literature that targets assessing such relationship for the case of Morocco. The following contribution determines the long run relationship between these variables using an autoregressive distributive lag model (ARDL) bound test that is developed by Pesaran et al. (2001). Findings indicate that there is a significant co-integration between the variables of interest, meaning that the long run relationship between them exists. Findings also show that energy consumption has direct positive effect on economic growth but it may have larger negative effect on economic growth indirectly through higher carbon dioxide emissions.
    Keywords: GDP, Energy consumption, CO2 emissions, Long run relationship, ARDL Bound test, Co-integration, Morocco
    JEL: O13 P28 P48 Q43
    Date: 2020–02–03
  9. By: Daniel Felix Ahelegbey (Università di Pavia); Emmanuel Senyo Fianu (University Lüneburg); Luigi Grossi (Università di Verona)
    Abstract: Ensuring the security of stable, e?cient, and reliable energy supplies has intensi?ed the interconnections among energy markets. Imbalances between supply and demand due to operational failures, congestions and other sources of risk faced by these connections can lead to a system that is vulnerable to the spread of risk and its spill-over. The main contribution of this paper lies in the adoption of recently proposed network models in an innovative way, which enhances the proper analysis of these market connections. The case of the Italian energy market is studied because it is a clear example of a zonal market where risk can spread across connected zones. We estimate within-day and across-day zonal market interconnections with a multivariate time series of hourly prices, forecast demand and wind generation over the period 2010 – 2016 and evaluate the dynamics and persistence of zonal market connections examining the central market and the spread of risk in the zones of the Italian electricity market. Our ?ndings show that models based purely on prices give a better and more accurate explanation of risk contagion than models with exogenous regressors, revealing that the Central North and Central South zones are the most in?uential in terms of hub centrality for intraday and inter-day risk transmission, respectively, in the Italian energy market.
    Keywords: Bayesian inference, complex networks, energy prices, market e?ciency, systemic risk, volatility, zonal power market
    JEL: C11 C15 C32 C52 G01 Q41
    Date: 2020–02
  10. By: Aleksandar Zaklan
    Abstract: This paper provides an empirical test of the Coase Theorem. I analyze whether emissions are independent from allowance allocations in the electricity sector as regulated under the EU's Emissions Trading System (EU ETS). Exogenous variation in levels of free allocation for power producing installations enables a difference-in-differences strategy. I find that the change in allocations generally does not affect installations' emissions, although temporary effects may exist for some small emitters. The analysis suggests that policy makers may use free allocation in the political bargaining process without compromising cost- effectiveness of the cap-and-trade program.
    Keywords: Coase theorem, independence property, cap-and-trade, EU ETS, greenhouse gas emissions
    JEL: Q58 Q54 Q52 L94 H23
    Date: 2020
  11. By: Klotz, Richard (Department of Economics, Colgate University); Sharma, Rishi (Department of Economics, Colgate University)
    Abstract: We study the impact of existing worldwide tariffs and several tariff reform schemes on global CO2 emissions using a multi-country, multi-sector general equilibrium model with detailed input-output linkages. Our analysis reveals the importance of a simple mechanism relating trade policy to global emissions that has not been previously highlighted in the literature: reducing existing tariffs tends to increase emissions primarily by increasing the global output of intermediate inputs relative to final goods. Greater use of intermediates implies, all things equal, more fossil fuel usage and therefore more emissions per unit of global final output. This effect ultimately results from the fact that tariffs are to some extent a tax on material but not on labor. This channel accounts for the majority of the emissions increase from moving to complete liberalization, exceeding even the mechanical effect of increased GDP and overwhelming effects from reallocation of activity across countries and sectors. We find that global partial liberalization schemes that temper this channel -- especially by reducing tariff escalation -- could achieve substantial global GDP increases with small increases in CO2 or even emissions reductions.
    Keywords: tariffs; trade liberalization; CO2 emissions
    JEL: F13 F18 Q54 Q56 Q58 H23 H87
    Date: 2020–01–01
  12. By: Filippo Beltrami (University of Padua); Andrew Burlinson (University of East Anglia); Luigi Grossi (Department of Economics (University of Verona)); Monica Giulietti (Loughborough University); Paul Rowley (Loughborough University); Grant Wilson (University of Birmingham)
    Abstract: This paper offers a novel contribution to the literature on marginal emission factors by proposing a robust empirical methodology for their estimation across both time and space. Our ARIMA model with time-effects not only outperforms the established models in the economics literature but it also proves more reliable than variations adopted in the field of engineering. Utilising half-hourly data on carbon emissions and generation in Great Britain, the results allow us to identify a more stable path of MEFs than obtained with existing methodologies. We also estimate marginal emission effects over subsequent time periods (intra-day), rather than focussing only on individual settlement periods (inter-day). This allows us to evaluate the annual cycle of emissions as a result of changes in the economic and social activity which drives demand. Moreover, the reliability of our approach is further confirmed upon exploring the cross-country context. Indeed, our methodology proves reliable when applied to the case of Italy, which is characterised by a different data generation process. Crucially, we provide a more robust basis for valuing actual carbon emission reductions, especially in electricity systems with high penetration of intermittent renewable technologies.
    Keywords: electricity generation, marginal emission factors, time series analysis, regulation
    JEL: C22 Q41 Q53
    Date: 2020–01
  13. By: T. Brown; L. Reichenberg
    Abstract: Although recent studies have shown that electricity systems with shares of wind and solar above 80% can be affordable, economists have raised concerns about market integration. Correlated generation from variable renewable sources depresses market prices, which can cause wind and solar to cannibalize their own revenues and prevent them from covering their costs from the market. This cannibalization appears to set limits on the integration of wind and solar, and thus contradict studies that show that high shares are cost effective. Here we show from theory and with numerical examples how policies interact with prices, revenue and costs for renewable electricity systems. The decline in average revenue seen in some recent literature is due to an implicit policy assumption that technologies are forced into the system, whether it be with subsidies or quotas. If instead the driving policy is a carbon dioxide cap or tax, wind and solar shares can rise without cannibalising their own market revenue, even at penetrations of wind and solar above 80%. Policy is thus the primary factor driving lower market values; the variability of wind and solar is only a secondary factor that accelerates the decline if they are subsidised. The strong dependence of market value on the policy regime means that market value needs to be used with caution as a measure of market integration.
    Date: 2020–02
  14. By: Yun Bai; Xixi Li; Hao Yu; Suling Jia
    Abstract: Crude oil price forecasting has attracted substantial attention in the field of forecasting. Recently, the research on text-based crude oil price forecasting has advanced. To improve accuracy, some studies have added as many covariates as possible, such as textual and nontextual factors, to their models, leading to unnecessary human intervention and computational costs. Moreover, some methods are only designed for crude oil forecasting and cannot be well transferred to the forecasting of other similar futures commodities. In contrast, this article proposes a text-based forecasting framework for futures commodities that uses only future news headlines obtained from to forecast crude oil prices. Two marketing indexes, the sentiment index and the topic intensity index, are extracted from these news headlines. Considering that the public's sentiment changes over time, the time factor is innovatively applied to the construction of the sentiment index. Taking the nature of the short news headlines into consideration, a short text topic model called SeaNMF is used to calculate the topic intensity of the futures market more accurately. Two methods, VAR and RFE, are used for lag order judgment and feature selection, respectively, at the model construction stage. The experimental results show that the Ada-text model outperforms the Adaboost.RT baseline model and the other benchmarks.
    Date: 2020–01
  15. By: Álvarez, Irma Alonso; Di Nino, Virginia; Venditti, Fabrizio
    Abstract: In a simplified theoretical framework we model the strategic interactions between OPEC and non-OPEC producers and the implications for the global oil market. Depending on market conditions, OPEC may find it optimal to act either as a monopolist on the residual demand curve, to move supply in-tandem with non-OPEC, or to offset changes in non-OPEC supply. We evaluate the implications of the model through a Structural Vector Auto Regression (VAR) that separates non-OPEC and OPEC production and allows OPEC to respond to supply increases in non-OPEC countries. This is done by either increasing production (Market Share Targeting) or by reducing it (Price Targeting). We find that Price Targeting shocks absorb half of the fluctuations in oil prices, which have left unexplained by a simpler model (where strategic interactions are not taken into account). Price Targeting shocks, ignored by previous studies, explain around 10 percent of oil price fluctuations and are particularly relevant in the commodity price boom of the 2000s. We confirm that the fall in oil prices at the end of 2014 was triggered by an attempt of OPEC to re-gain market shares. We also find the OPEC elasticity of supply three times as high as that of non-OPEC producers. JEL Classification: Q41, Q43
    Keywords: oil, OPEC, shale, VAR
    Date: 2020–01
  16. By: Marcel Bednarz; Tom Broekel
    Abstract: This paper contributes to and connects the literature on spatial innovation diffusion, entre-preneurship, and industry life-cycles by disentangling the relevance of local demand and sup-ply in the adoption of wind energy production. More precisely, we evaluate the strength of local supply-push effects with those of local demand-pull over the course of the evolution of an industry and its main product evolution. By using Bayesian survival models with time-dependent data of wind turbine deployment and firm foundation for 402 German regions between the years 1970 and 2015, we show that the spatial evolution of the German wind energy industry was more strongly influenced by local demand-pull than local supply-push processes. New producers are found to emerge in proximity to existing local demand for wind turbines. No evidence was found for producers being able to create local demand for their products by pushing the adoption of the technology in their regions.
    Keywords: supply-push, demand-pull, Bayesian survival analysis, wind energy
    JEL: Q21 R12 O33 O31
    Date: 2020–02
  17. By: Katarzyna Maciejowska; Bartosz Uniejewski; Tomasz Serafin
    Abstract: Recently, the development in combining point forecasts of electricity prices obtained with different length of calibration windows have provided an extremely efficient and simple tool for improving predictive accuracy. However, the proposed methods are strongly depended on expert knowledge and may not be directly transferred from one to another model or market. Hence, we consider a novel extension and propose to use Principal Component Analysis (PCA) to automate the procedure of averaging over a rich pool of predictions. We apply PCA to a panel of over 650 point forecasts obtained for different calibration windows. The robustness of the approach is evaluated with three different forecasting tasks, i.e., forecasting day-ahead prices, forecasting intraday ID3 prices one day in advance and finally very short term forecasting of ID3 prices (i.e., six hours before delivery). The empirical results are compared using the Mean Absolute Error measure and Giacomini and White test for conditional predictive ability (CPA). The results indicate that PCA averaging not only yields significantly more accurate forecasts than individual predictions but also outperforms other forecast averaging schemes.
    Keywords: Electricity price forecasting; Day-ahead market; Intraday market; Forecast averaging; Principal component analysis; Decision-making
    JEL: C22 C32 C51 C53 Q41 Q47
    Date: 2020–02–04
  18. By: Razzak, Weshah
    Abstract: In Razzak (2006), I argued that the state-ownership and the state-management of oil (on behalf of the Iraqi people) is not conducive to democracy and economic development. Iraqis have had dictators for decades. They were only able to maintain power by controlling the oil. The events of 2019 uprising confirmed that. I also argued that it could impoverish the average Iraqi citizen. This has become clear to everyone now. The statistics demonstrate that the average Iraqi is poor. The new political establishment has failed to develop the economy and squandered Iraq’s oil wealth. In 2006, I proposed a change to the Iraqi constitution regarding oil and provided a strategy of a gradual transfer oil wealth to the Iraqi people. In this paper, I revise my idea based on the new information that became available from the recent uprising of the Iraqi people in 2019, and argue for an immediate transfer of oil wealth to the Iraqi people.
    Keywords: Oil, private ownership, democracy,development
    JEL: P14 Q32 Q43 Q48
    Date: 2019–11–01
  19. By: Richard S.J. Tol (Department of Economics, University of Sussex, Falmer, United Kingdom)
    Abstract: Nordhaus’ seminal dice model assesses first-best climate policy, a useful but unrealistic yardstick. I propose a measure of policy inefficacy if carbon prices are heterogeneous and use observed prices to recalibrate the dice model. I introduce a model of climate policy with selfish bureaucrats, and calibrate it to carbon dioxide emissions in the European Union and the policy models used by the IPCC. This model also implies a measure of policy inefficacy that I use to recalibrate dice. The global mean temperature is 1? perhaps 2? higher in the recalibrated than in the original dice model.
    Keywords: climate policy, price heterogeneity, selfish bureaucrats
    JEL: D73 Q54
    Date: 2020–01
  20. By: Arinze Nwokolo (Lagos Business School)
    Abstract: This paper studies the effect of international oil prices on civil conflict in Nigeria. Our analysis uses time variation in global oil prices and cross-sectional variation based on the initial distribution of oil production across Nigerian districts. According to our estimates, an increase in oil price increases the risk of civil conflicts in districts that produce oil by at least 63 percent. Using data on intergovernmental transfers, labor outcomes and firm characteristics, the study tests for popular theoretical mechanisms of the resource curse and shows that positive oil price shocks magnify conflict through rising competition for resource rents and grievance against foreign firms. No evidence is found in favor of mechanisms related to changes in the opportunity cost of engaging in conflict.
    Keywords: Natural resource, Conflict, Firms JEL Classification: C23, D74, J30, L70, Q34
    Date: 2018–08
  21. By: Grzegorz Marcjasz; Bartosz Uniejewski; Rafal Weron
    Abstract: A recent electricity price forecasting study claims that the German intraday, continuous-time market for hourly products is weak-form efficient, i.e., that the best predictor for the so-called ID3-Price index is the most recent transaction price. Here, we undermine this claim and show that we can beat the naive forecast by combining it with a prediction of a parameter-rich model estimated using the least absolute shrinkage and selection operator (LASSO). We further argue, that that if augmented with timely predictions of fundamental variables for the coming hours, the LASSO-estimated model itself can significantly outperform the naive forecast.
    Keywords: Intraday electricity market; ID3-Price index; Price forecasting; Variable selection; Fundamental variables; LASSO; Averaging forecasts
    JEL: C22 C32 C51 C53 Q41 Q47
    Date: 2020–02–02
  22. By: Achyuta Adhvaryu (University of Michigan & NBER); James Fenske (University of Warwick); Gaurav Khanna (University of California – San Diego); Anant Nyshadham (Boston College & NBER)
    Abstract: Evidence suggests that natural resources drive both conflict and underdevelopment in modern Africa. We show that this relationship exists primarily when neighboring regions are resource- rich. When neighbors are poor, resources have modest impacts on conflict, and instead drive economic growth. To highlight the role played by neighbors, we simultaneously incorporate multiple mechanisms in a model of strategic interaction between parties engaged in potential conflict over such resources. The likelihood of conflict depends on both the absolute and relative resource endowments of neighboring parties, as resources fuel conflict by raising the gains from expropriation and by increasing fighting strength. Economic prosperity, as a result, is a function of equilibrium conflict prevalence determined not just by a region’s own resources but also by the resources of its neighbors. Using high-resolution spatial data on resources, conflicts, and nighttime illumination across the whole of sub- Saharan Africa, we find evidence confirming each of the model’s predictions. Structural estimates of the model reveal that conflict equilibria are more prevalent where institutional quality (measured by, e.g., risk of expropriation, property rights, voice and accountability) is worse.
    Keywords: conflict, resource curse, institutions, nighttime lights, Africa JEL Classification: D74, O13, Q34
    Date: 2018–07
  23. By: Amenta, Nina; Sanguinetti, Angela
    Abstract: This study explores the potential to promote lower-emissions air travel by providing consumers with information about the carbon emissions of alternative flight choices in the context of online flight search and booking. Researchers surveyed over 450 UC Davis faculty, researchers, and staff, asking them to choose among hypothetical flight options for university-related business trips. Emissions estimates for flight alternatives were prominently displayed alongside cost, layovers and airport, and the lowest-emissions flight was labeled “Greenest Flight”. The researchers found an impressive rate of willingness to pay for lower-emissions flights: around $200/ton of CO2E saved, a magnitude higher than that seen in carbon offsets programs. They also found that displaying carbon information encouraged Davis employees to choose nonstop (lower-emissions) flights, when available, from a more distant airport over indirect flights from their preferred airport for medium-distance flights. In a second step of analysis, they estimated the carbon and cost impacts for UC Davis business travel if the university were to adopt a flight-search interface that prioritizes carbon emissions information and displays alternatives from multiple regional airports in their employee travel-booking portal. Based on the choice models from the survey data, a year’s worth of actual employee air travel data, and data collected on flight alternatives with respect to the flights chosen by employees, they estimated potential annual savings of more than 79 tons of CO2E, and a more impressive $56,000 reduction in airfare costs, due to an increased willingness of travelers to take advantage of cheaper (often nonstop) flight options out of SFO. Broader university policies encouraging lower-emissions flights and enhanced public transportation within the multi-airport mega-region would likely support much greater carbon savings. Institutionalizing this “nudge” within organizations with large travel budgets, like the UC system, could have an industry-wide impact in aviation. View the NCST Project Webpage
    Keywords: Engineering, Social and Behavioral Sciences, Carbon emissions, air travel, flight search, online travel booking, eco-feedback
    Date: 2020–02–01
  24. By: Mikkel Bennedsen (Aarhus University and CREATES)
    Abstract: Following the Paris Agreement, most countries have agreed to reduce their CO2 emissions according to individually set Nationally Determined Contributions (NDCs). However, national CO2 emissions are reported by individual countries, and cannot be directly measured or verified by third parties. This engenders a potential misreporting problem, where nations that are not living up to their Paris commitments could, by underreporting emissions, nevertheless appear to be fulfilling their NDC targets. This paper uses the theory of sequential testing to design a statistical CO2 monitoring procedure that can detect systematic misreportings of CO2 emissions. The data series that we monitor is the so-called carbon budget imbalance, which is a time series derived from reported CO2 emissions and independently measured Earth system data. We show that, when emissions are truthfully reported, the budget imbalance constitutes a stationary process, while, if emissions become systematically misreported, a structural break occurs. Our proposed procedure monitors the budget imbalance data and sequentially tests the null that the budget imbalance is stationary, rejection of the null provides evidence for systematic misreportings of CO2 emissions. By constructing the procedure appropriately, detection time can be made sufficiently fast to help inform the 5 yearly global “stocktake” of the Paris Agreement.
    Keywords: CO2 emissions, Paris agreement, Global Carbon Budget, sequential testing
    JEL: Q54 C12
    Date: 2020–02–21
  25. By: Chen, Ying
    Abstract: Air quality is an important amenity that affects the labor supply to a local economy while regulations aiming at improving it can be costly and consequently reduce the local labor demand. This article studies how air quality and its regulation respectively and jointly affect the local economy through these two channels by exploiting China's first national air pollution regulation and migration reform as natural experiments. I propose an instrumental variable for local pollution levels by applying rich remote-sensing data to the engineering considerations of power plant construction. The estimation results suggest that heavy air pollution has driven out high-skilled workers when migration costs fall, while the regulation to curb pollution has led to a reduction in manufacturing employment in targeted locations and sectors. Additional results show relatively slower firm and wage growth in more regulated prefectures and sectors, and a modest local employment reallocation from heavy-to light-polluting industries.
    Keywords: Environmental regulations, Air pollution, Local economic growth
    JEL: J61 Q52 Q53 R11
    Date: 2020–02
  26. By: Ivan Faiella (Bank of Italy); Alessandro Mistretta (Bank of Italy)
    Abstract: The worldwide upswing in energy prices recorded in the last decade has placed decarbonization strategies, and their potentially negative consequences for firms’ costs and competitiveness, at the centre of the European policy debate. We evaluate the relevance of energy policies for competitiveness by augmenting the standard analysis, largely based on labour costs, with a Unit Energy Cost (UEC) indicator. We analyse how the UEC evolved in different countries and industries and we assess its main drivers (prices, energy intensity, sector composition). Modelling the relationship between foreign sales and the UEC in a gravity model setup, we find that an increase in UECs reduces bilateral exports; the largest negative effects are obtained when limiting the analysis to euro-area countries. Our results strengthen the case for pursuing further integration of European energy markets (as provided for in the Energy Union and Winter packages) to ensure that the ambitious long-term European decarbonization targets do not have a negative impact on the euro-area industry’s ability to compete worldwide.
    Keywords: firms’ costs, energy, competitiveness, decarbonization, EMU
    JEL: C53 D24 Q41
    Date: 2020–02
  27. By: Heine,Dirk; Semmler,Willi; Mazzucato,Mariana; Braga,Joao Paulo; Flaherty,Michael; Gevorkyan,Arkady; Hayde,Erin Kate; Radpour,Siavash
    Abstract: To finance the transition to low-carbon economies required to mitigate climate change, countries are increasingly using a combination of carbon pricing and green bonds. This paper studies the reasoning behind such policy mixes and the economic interaction effects that result from these different policy instruments. The paper models these interactions using an inter-temporal model that proposes burden sharing between current and future generations. The issuance of green bonds helps to enable immediate investment in climate change mitigation and adaptation, and the bonds would be repaid by future generations in such a way that those who benefit from reduced future environmental damage share in the burden of financing the mitigation efforts undertaken today. The paper examines the effects of combining green bonds and carbon pricing in a three-phase model and uses a numerical solution procedure that allows for finite-horizon solutions and phase changes. The paper shows that green bonds perform better when they are combined with carbon pricing. The proposed policy option appears to be politically more feasible than a green transition based only on carbon pricing, and it is more prudent for debt sustainability than a green transition that relies overly on green bonds.
    Keywords: Green Issues,Climate Change Mitigation and Green House Gases,Science of Climate Change,Climate Change and Environment,Climate Change and Health
    Date: 2019–08–20
  28. By: Rusansky, T.
    Abstract: Based on a research journey in collaboration with a Brazilian social movement, the Movement of People Affected by Dams (MAB), this Research Paper explores the experiences of resistance of women whose lives were flooded by the Baixo Iguaçu Hydropower Dam in Paraná, South Brazil. Dominant development narratives promote hydropower dams as a sustainable source of energy in Brazil, while silencing the voices of those inhabiting the affected lands, and underestimating the social and ecological destruction that large dam projects provoke. Drawing from feminist political ecology, decolonial theory and Latin American political ecology, this research examines how women in Baixo Iguaçu who were affected by the construction of a dam on their rural lands embroider their embodied, emotional and daily resistance. Guided by ‘arpilleras’ – embroideries that women organized in the MAB create to narrate their silenced stories – and drawing from conversations and in-depth interviews, this research brings their voices to the centre. Collectively, women in the MAB apply the language of arpilleras to a popular education feminist methodology, transforming sewing into politics. In Baixo Iguaçu, women affected by the dam struggle daily against displacement, the flooding of their territories, the destruction of their communities and care networks, the violent stigmatization of their political engagement, and their exclusion from spaces of negotiation and decision-making, among others. I suggest that arpilleras are an alternative language through which women express their knowledges, emotions and experiences otherwise. Arpilleras grow into a political strategy that uses art: a strategy for widening women’s political participation, for creating collective identity, and for building counter-hegemonic narratives. These narratives rise up to challenge the dominant energy development model that transforms women’s rivers and bodies into commodities.
    Keywords: dams, women, MAB, Baixo Iguaçu, Brazil, resistance, arpilleras, embroidery, hydropower development
    Date: 2020–02–21
  29. By: Coville,Aidan; Orozco Olvera,Victor Hugo; Reichert,Arndt Rudiger
    Abstract: This paper provides an explanation for why many information campaigns fail to affect decision-making. The authors experimentally show that a large information intervention about a profitable and climate-friendly household investment had limited effects if it only provided generic data. In contrast, it caused households to make new investments when it followed a campaign strategy designed to minimize information processing costs. This finding is consistent with a model of selective attention, where individuals prioritize information believed to be valuable after accounting for the costs of attending to the data that arise due to limited mental energy and time. The paper studies a range of possible mechanisms and finds corroborative evidence of selective attention as an inhibitor to learning.
    Date: 2019–09–12
  30. By: Kounetas, Konstantinos; Stergiou, Eirini
    Abstract: Eco-efficiency has intensified the attention of policymakers in the last decades as the ability to create more goods and services with less impact on the environment consists an instrument towards sustainability. In this paper we utilize data of 14 industries from 27 European countries from 1995 to 2011 to estimate distinct objectives of economic and ecological performance by utilizing directional distance functions under a metafrontier framework. Our results reveal that the existence of a unified technology set causes large differences in the industrial eco-efficiency levels while energy intensive industries can be characterized as the most eco-inefficient .Although the speed of eco-efficiency convergence increases throughout the years, the case of CO2 emissions presents an erratic behavior compared to the other pollutants. Thus, a decomposition of industrial CO2 emissions can be considered as a further subject of research in our study in order to identify the drivers of this change through time.
    Keywords: Eco-efficiency, Metafrontier, Spillovers, Catch-up, Kaya Identity, European Industries.
    JEL: D24 Q5 Q53 Q57
    Date: 2020–02–04
  31. By: Shiba Suzuki (Seikei University); Hiroaki Yamagami (Seikei University)
    Abstract: This study explores how investors' optimism about the likelihood of pollution-driven disaster occurrence affects asset prices. Environmental pollution resulting from economic activities raises the probability of disaster occurrence. However, the relationship between economic activities, pollution, and disaster occurrence is difficult to ascertain. Thus, investors make decisions based on subjective expectation; specifically, they subjectively evaluate the probability of disaster occurrence to be lower than its objective probability. As demonstrated in this study, the equity premiums under conditions of objective expectation are significantly higher than those under subjective expectation conditions only if a representative agent has high Intertemporal Elasticity of Substitution (IES). This discrepancy in asset returns is related to the propensity of individuals to discount events occurring in the "distant future" as described in existing literature.
    Keywords: Expectations, Disasters, Equity Premium Puzzles, Discount Rate, Climate Change
    JEL: G12 Q54
    Date: 2020–02
  32. By: Akio Yamazaki (National Graduate Institute for Policy Studies, Tokyo, Japan)
    Abstract: This paper investigates how environmental taxes affect manufacturing productivity by examining British Columbia’s revenue-neutral carbon tax. I develop a new hypothesis, the “Productivity Dividend Hypothesis,†to show that environmental taxes can positively affect productivity by recycling tax revenues to reduce corporate income taxes. This revenue-recycling increases investment and could raise productivity more than environmental taxes lower productivity by diverting resources from production. I evaluate this hypothesis using detailed confidential plant-level data. I find that the carbon tax lowers productivity, although this is offset to some extent by the revenue-recycling. For some plants, the policy generates a net gain in productivity.
    Date: 2020–02
  33. By: Dissanayake,Sahan T. M.; Voigt,George; Cooper, Abbie; Beyene, Abebe Damte; Bluffstone,Randall; Gebreegziabher,Zenebe; LaFave, Daniel; Martinsson,Peter; Mekonnen,Alemu; Toman,Michael A.
    Abstract: There is a growing effort in the non-market valuation literature toward better understanding of the stability and evolution of preferences over time. The study uses a novel approach combining a repeated choice experiment with a randomized controlled trial on stove adoption in Ethiopia to analyze the stability and evolution of preferences. The treatment group in the randomized controlled trial received an improved fuelwood stove with less fuelwood use, whereas the control group continued to use traditional cooking methods. Respondents were given the exact same choice questions in 2013 and 2016. The study began with 504 households in 36 communities in 2013, and 486 of the same households participated in 2016 (a 96 percent retention rate). The results show that preferences of the respondents from the control group are stable over the study period, while preferences of the respondents from the treatment group evolve. Moreover, households in the treatment group still using the stoves have significantly higher willingness to pay for all the stove's attributes in 2016 compared with 2013, indicating how longer experience can increase the willingness to pay for technology with environmentally preferable attributes.
    Keywords: Global Environment,Flood Control,Hydrology,Energy Demand,Energy and Environment,Energy and Mining,Health Care Services Industry
    Date: 2019–06–28
  34. By: Bennett, Patrick (Dept. of Economics, Norwegian School of Economics and Business Administration); Ravetti, Chiara (Polytechnic of Turin); Wong, Po Yin (Research Department, Hong Kong Monetary Authority)
    Abstract: This paper examines the long-term labour market consequences of a positive economic shock, the first discovery of oil and gas in Norway. Existing studies focus on the short-term and men, while less is known about women and the persistence of such shocks. Oil discovery increased male earnings (by 7%), while female earnings declined (by 10%). These shifts persist for two decades. Labour force participation and occupational change account for the earnings divergence. Within married couples, wives’ earnings declined, but household earnings increased. However, women’s income loss in oil regions is transitory: younger cohorts catch up to women in non-oil regions.
    Keywords: Labour market; Fairness
    JEL: J00
    Date: 2020–02–19
  35. By: Jan J. J. Groen; Patrick Russo (Research and Statistics Group)
    Abstract: After a period of stability, oil prices started to decline in mid-2015, and this downward trend continued into early 2016. As we noted in an earlier post, it is important to assess whether these price declines reflect demand shocks or supply shocks, since the two types of shocks have different implications for the U.S. economic outlook. In this post, we again use correlations of weekly oil price changes with a broad array of financial variables to quantify the drivers of oil price movements, finding that the decline since mid-2015 is due to a mix of weaker demand and increased supply. Given strong interest in the drivers of oil prices, the oil price decomposition is information we will be sharing in a new Oil Price Dynamics Report on our public website each Monday starting today. We conclude this post using another model that finds that the higher oil supply boosted U.S. economic activity in 2015, though this impact is expected to wear off in 2016.
    Keywords: VAR models; Oil Prices; Asset Prices; Oil Supply Shocks
    JEL: E2 F00 G1
  36. By: Francisco Cabo (Universitad de Valladolid); Mabel Tidball (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier)
    Abstract: We analyze a dynamic environmental agreement between two regions. We assume that the agreement is jointly protable, because the eort associated with emission reductions is overcompensated by a cleaner environment in the future The two regions are asymmetric in two respects: their value of a cleaner environment is dierent, and they are responsible for the initial environmental problem in dierent ways. Because the benets of a cleaner environment cannot be transferred, we propose a mechanism on how to share the eorts of lowering current emissions, satisfying two main properties. The rst property is a benets pay principle: the greater one region's relative benet from cooperation, the greater must be its relative contribution. The second property is, a polluter pay principle: a region's relative contribution increases with its responsibility. Moreover, the sharing scheme must be time consistent. At any intermediate time, no country can do better by deviating from cooperation. *
    Keywords: Cooperative dierential game,Distribution procedure,Time consistency,Polluter pay principle,Benets pay principle
    Date: 2020
  37. By: Astrid Martínez; José Arcos; Juan Benavides; Henry Garay; Ricardo Lloreda; Juan Mauricio Ramírez; David Riaño; Eduardo Uribe
    Abstract: En este informe se resumen los informes previos del estudio de FEDESARROLLO para la UPME cuyo objeto es la formulación de una política integral de precios de los energéticos orientada al compromiso de los compromisos ambientales del país y un análisis de los efectos de su adopción desde las perspectivas económicas, fiscales y de acceso a estos energéticos por parte de las empresas y los hogares.
    Keywords: Precios de los Energéticos, Precios de los Combustibles, Precios del Diésel, Precios de la Gasolina, Precios del GLP, Precios Jet (Gasolina de Aviación), Precios de Gas Natural, Precios de Energía Eléctrica, Precios de los Biocombustibles, Precios del Carbón, Política Integral de Precios, Sistema Energético Moderno, Colombia
    JEL: O13 Q41 Q42 Q43
    Date: 2019–11–29
  38. By: Dorothée Charlier (Université Savoie Mont-Blanc IREGE); Florian Fizaine (Université Savoie Mont-Blanc IREGE)
    Abstract: During the last three decades, many industrializing countries have experienced economic growth, which concurred with a substantial increase in the use of materials. This fact questions the relationship between the use of biomass, fossil fuels and minerals and economic growth. Using a Material Kuznets Curve framework, this study investigates whether material use spontaneously reaches a maximum for a given level of development and declines thereafter. Using a new indicator, the material footprint (that quantifies all materials extracted to produce a country's final demand, including materials embodied in imports), we investigate this nexus confronting for the first-time different methodologies in a same empirical study. More especially, we measure the evolution of material footprint (per capita) elasticity to gdp (per capita) in four different ways. As main results, all models lead to a same nature and seem to indicate a strong and permanent link between economic growth/ economic development and raw material consumption. There is no sign of strong decoupling. Improving development and adoption of technologies becomes an emergency.
    Keywords: Decoupling, EKC MKC, Material footprint, Sustainability, Leapfrogging
    JEL: O13 Q32
    Date: 2020–02
  39. By: Alaa Al Khourdajie (Centre for Environmental Policy, Imperial College London, UK); Michael Finus (University of Graz, Austria)
    Abstract: Actions on climate change which are not supported by all countries are not very effective. However, full participation in a global climate treaty with meaningful emission reductions is difficult to achieve. The non-excludability of the public good mitigation provides an incentive to abstain from global action. Moreover, carbon leakage renders it unattractive to join a treaty without full participation. We study whether and under which conditions border carbon adjustments (BCAs) can mitigate free-riding and reduce carbon leakage in a simple strategic trade model. We show that BCAs can lead to large stable climate agreements, including full participation, associated with large global welfare gains if treaties do not restrict membership (open membership), as this is typical for environmental agreements. We caution against restricting accession to treaties (exclusive membership), as this is typical for trade agreements, which may serve individual but not global interests.
    Keywords: self-enforcing international climate agreements; international trade; border carbon adjustments
    JEL: C71 D62 F18 H23 H41 Q54
    Date: 2020–02
  40. By: Ivan Faiella (Banca d'Italia); Danila Malvolti (Ministry of Economy and Finance)
    Abstract: The increasing attention paid to the possible consequences of climate change for the financial sector has strengthened international cooperation on green finance, with initiatives from both the industry and the institutions. International surveys show that so far there has been no adequate growth in awareness of the risks linked to climate change and the opportunities linked to the transition towards a low carbon economy. Evidence acquired on Climate-Related Financial Risk (CRFR) disclosure in Italy has confirmed the same conclusions. We have therefore identified three steps with the aim of encouraging financial institutions to take CRFR into account in their corporate risk management strategies: 1) create a information hub to gather the information required for assessing the CRFR; 2) compile a list of the information not yet available; 3) define standard methodologies that allow the climate scenarios to be part of the decision-making processes of financial institutions.
    Keywords: climate change, financial risk, Italy
    JEL: G21 P48 Q54
    Date: 2020–02
  41. By: International Monetary Fund
    Abstract: Selected Issues
    Keywords: Oil sector;Fiscal policy;Oil revenues;Tax policy;Tax revenue;ISCR,CR,Congolese authority,non-oil,arrears,SNPC,import price
    Date: 2020–01–27
  42. By: Lucchese, Matteo; Pianta, Mario
    Abstract: Europe is facing the twin challenges of addressing climate change and reducing the centre-periphery divergence. The ‘European Green Deal’ of the EU Commission includes larger climate change objectives, but with the same amount of EU resources and no clear vision on how to achieve aims. The lack of action for greater cohesion and convergence in economic performances is contributing to wider disparities within Europe, in particular with the countries and regions of Southern Europe. These challenges could be jointly understood as a need for deep changes in Europe’s production systems, making them carbon-neutral and distributing more evenly economic activities in Europe’s territory. A Green Industrial Policy for Europe could be the appropriate frame for developing a combined set of policies addressing such challenges.
    Keywords: Europe, green industrial policy, economic convergence
    JEL: L52 O25 P48
    Date: 2020
  43. By: Roberta De Santis (ISTAT); Cecilia Jona Lasinio (ISTAT); Piero Esposito (LUISS)
    Abstract: In this paper, we empirically analyse the environmental regulation-productivity nexus for 14 OECD countries in the period 1990-2013. Our findings support the hypothesis that environmental policies have a productivity growth enhancing effect through innovation as suggested by Porter and Van Der Linde (1995). We provide evidence that both market and non-marked based policies foster labour and multifactor productivity growth and that the positive association is better captured by environmental adjusted productivity indicators. Moreover, we find that productivity increases resulting from changes in the environmental regulation pass through a stimulus to capital accumulation and this effect is concentrated in high ICT intensive countries. Overall, the need to speed up the transition towards a “green economy” for environmental protection purposes can be seen also as an opportunity to improve competitiveness generating a virtuous circle between innovation and environmental friendly production techniques.
    Keywords: Inenvironmental regulation, productivity, innovation, Porter hypothesis,
    JEL: D24 Q50 Q55 O47 O31
    Date: 2020
  44. By: Jules Sadefo Kamdem (MRE - Montpellier Recherche en Economie - UM - Université de Montpellier, UG - Université de Guyane); David Akame (MRE - Montpellier Recherche en Economie - UM - Université de Montpellier)
    Abstract: This paper extends the work of Pindyck by taking into consideration a large class family of different utility functions of economic agents. As in Pindyck, instead of consideringa social utility function that is characterized by constant relative risk aversion (C.R.R.A), we use the expo-power utility function of Saha. In fact, depending on the choice of the expo-power utility function parameters, we cover a diverse range1of utility functions and besides covering the other utility functions that a C.R.R.A omits, Expo-power function permits usto discern if under the other behaviors of economic agents, the willingness to pay remainsmore affected by uncertain outcomes than certain outcomes, when we vary the expectationand standard deviation of the temperature distribution probability. Our paper has maintained the small-tailed gamma distributions of temperature and economic impact of Pindyck, notonly because they hinder infinite future welfare losses (for an exponential utility function), but because it is easy to change some moments of the distribution (jointly or holding the othersfixed) while studying how uncertainty influences the willingness to pay as explained in Pindyck.
    Keywords: Willingness to Pay,Climate Change,Expo-Power Utility,I.A.R.A,D.A.R.A,I.R.R.A,IA
    Date: 2020–01–24
  45. By: Stefan Bach; Niklas Isaak; Lea Kampfmann; Claudia Kemfert; Nicole Wägner
    Abstract: Im Dezember 2019 haben Bund und Länder nach anhaltender Kritik das im September beschlossene Klimapaket nachgebessert: Die CO2-Preise wurden erhöht und die EEG-Umlage stärker gesenkt. Doch trotz dieser Anpassungen werden der vorgeschlagene CO2-Preispfad und der anschließende Emissionshandel mit festgelegter Preisobergrenze als alleinige Instrumente immer noch nicht ausreichen, um die Klimaziele 2030 in den Sektoren Verkehr und Gebäude zu erreichen, wie aktuelle Berechnungen ergeben. Zudem kommt es weiterhin zu sozialen Schieflagen durch Mehrbelastungen niedriger Einkommen, auch wenn sich dieser Effekt durch die Senkung der Strompreise verringert. Um die Verteilungswirkungen der Reform insgesamt progressiv zu gestalten, wären verschiedene Optionen denkbar: ein vom individuellen Steuersatz unabhängiges Mobilitätsgeld statt der Pendlerpauschale und vor allem eine einheitliche Pro-Kopf-Klimaprämie, die Geringverdienende im Durchschnitt stärker entlasten würde, als sie der CO2-Preis belastet.
    Date: 2020
  46. By: Victor Medeiros (Federal University of Minas Gerais); Rafael S. M. Ribeiro (Federal University of Minas Gerais)
    Abstract: A broad literature has indicated the essential role of power infrastructure in reducing income inequality. However, it is uncertain whether this relationship remains in scenarios with heterogeneities in terms of provision, quality, and access to electricity. This article intends to contribute to the literature by evaluating, in light of the Brazilian reality, how provision, quality, and the interaction between these two characteristics affects income inequality. To account for possible reverse causality problems, we apply the Generalized Method of Moments (GMM) estimators with different specifications to verify the robustness of our estimates. In a scenario where the vast majority of the population has access to electricity, our findings indicate that an expansion in power provision reduces income inequality. Nonetheless, the higher the power infrastructure quality, the smaller the returns of a growing power supply to the reduction of inequality, thus suggesting that richer populations tend to benefit the most from improvements in power quality.
    Keywords: power infrastructure; income inequality; infrastructure heterogeneities; Brazil; econometrics
    JEL: H54 D31 C21 R11
    Date: 2020–02
  47. By: Shmis,Tigran; Chugunov,Dmitry; Ustinova,Maria; Kotnik,Jure
    Abstract: This paper discusses an example of an early childhood development facility intervention in the Khanty-Mansyisk region of the Russian Federation and its potential to produce efficiency gains in the region and the country overall. The government of the region is introducing changes to the built environment of its early childhood development centers. The proposed new design is based on the concept of the learning environment as a third teacher. The smaller footprint of the new buildings will increase the amount of active space per child, and the new design will include energy efficiency measures. The economic impact of these measures will reduce operating costs throughout the lifecycle of the building and provide strong evidence to education policy makers in the rest of the region and the country as a whole in favor of child-centered, healthy, and energy efficient early childhood development infrastructure.
    Keywords: Energy and Mining,Energy and Environment,Energy Demand,Energy Policies&Economics,Educational Sciences,Energy Consumption,Energy Conservation&Efficiency,Environment and Energy Efficiency,Hydrology
    Date: 2019–08–19
  48. By: Bensch, Gunther; Gotz, Gunnar; Peters, Jörg
    Abstract: This paper replicates and extends the seminal paper by Dinkelman (2011) on the impacts of electrification on female employment. We revisit the validity of the identification strategy that uses the land gradient as an instrumental variable (IV). Our robustness checks cast doubt on the exclusion restriction as the IV drives the outcome variable in non-electrified regions. We also demonstrate that it is more difficult to disentangle the effects of electricity and road infrastructure than the original paper claims, because the IV affects both. We additionally highlight that the IV is weak, consequently preventing interpretation of the point estimates that are used throughout the original paper. The concomitance of a questionable exclusion restriction and a weak IV is particularly problematic. We conclude by arguing that the takeaways of the original paper for policy and the academic literature need to be reconsidered. In general terms, our comment shows the difficulties of using geographical variation as a natural experiment for infrastructure evaluation.
    Keywords: replication,research transparency,energy access,infrastructure,instrumental variables
    JEL: O13 C52 H43 O18
    Date: 2020
  49. By: Flores, Adrián; Peralta, Leda
    Abstract: The Caribbean region is prone to disasters due to its geographic location. The exposures and resulting impacts of these disasters are aggravated by persistent social, economic and environmental vulnerabilities. Compounded with the region’s current dependence on imported fossil fuels and financial constraints, this study seeks to stimulate discussions around the complementarity of energy with every societal sector as well as its links with disaster risk management, and promote government-wide management that integrates energy policies, disaster management and climate change impacts.
    Date: 2020–01–28
  50. By: Fabien Leurent (LVMT - Laboratoire Ville, Mobilité, Transport - IFSTTAR - Institut Français des Sciences et Technologies des Transports, de l'Aménagement et des Réseaux - UPEM - Université Paris-Est Marne-la-Vallée - ENPC - École des Ponts ParisTech)
    Date: 2020–01–30

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