nep-ene New Economics Papers
on Energy Economics
Issue of 2020‒03‒16
fifty-one papers chosen by
Roger Fouquet
London School of Economics

  1. Fossil fuel resources, decarbonization, and economic growth drive the feasibility of Paris climate targets By Vivek Srikrishnan; Yawen Guan; Klaus Keller; Richard S.J. Tol
  2. An economic assessment of the residential PV self-consumption support under different network tariffs By Olivier Rebenaque
  3. Supercharged? Electricity Demand and the Electrification of Transportation in California By Burlig, Fiona PhD; Bushnell, James PhD; Rapson, David PhD; Wolfram, Catherine PhD
  4. The Role of Uncertainty in Controlling Climate Change By Yongyang Cai
  5. An Integrated Two-Level Demand-Side Management Game Applied to Smart Energy Hubs with Storage By Sobhani, S. Omid; Sheykhha, Siamak; Madlener, Reinhard
  6. Nuclear Energy, Economic Growth and the Environment: Optimal policies in a model with endogenous technical change and environmental constraints By Thanasis Stengos; Nikos Fatouros
  7. Firms'and States'Responses to Laxer Environmental Standards By Cordella,Tito; Devarajan,Shantayanan
  8. Assessing the Gas Market Potential in India By KAPSARC, King Abdullah Petroleum Studies and Research Center
  9. Mineral resources for renewable energy: Optimal timing of energy production By Adrien Fabre; Mouez Fodha; Francesco Ricci
  10. Strategic Climate Policies with Endogenous Plant Location: The Role of Border Carbon Adjustments By Noha Elboghdadly; Michael Finus
  11. Trivariate Modelling of the Nexus between Electricity Consumption, Urbanization and Economic Growth in Nigeria: Fresh Insights from Maki Cointegration and Causality Tests By Hamisu S. Ali; Solomon P. Nathaniel; Gizem Uzuner; Festus V. Bekun; Samuel A. Sarkodie
  12. Relative Prices and Climate Policy: How the Scarcity of Non-Market Goods Drives Policy Evaluation By Moritz A. Drupp; Martin C. Hänsel
  13. Recycling Oil Revenue By Michael Fosco; Thomas Klitgaard
  14. Learning from Power Sector Reform : The Case of the Arab Republic of Egypt By Rana,Anshul; Khanna,Ashish
  15. Learning from Power Sector Reform Experiences: The Case of Vietnam By Lee,Alan David; Gerner,Franz
  16. Behavioral Aspects of Energy Transition: A KAPSARC-Energy Systems Catapult (ESC) Joint Methodological Report By Emre Hatipoglu; Thamir Alshehri; Matt Lipson; Scott Milne; Simon Pearson
  17. Forecasting the Intra-Day Spread Densities of Electricity Prices By Ekaterina Abramova; Derek Bunn
  18. Why Did the Recent Oil Price Declines Affect Bond Prices of Non-Energy Companies? By Asani Sarkar; Brandon Li
  19. Combined Vehicle Type and Fuel Type Choices of Private Households: An Empirical Analysis for Germany By Hackbarth, André; Madlener, Reinhard
  20. Tradable performance standards in a dynamic context By Jonathon M. Becker
  21. Dirty density: air quality and the density of American cities By Carozzi, Felipe; Roth, Sefi
  22. Using Supply-Side Policies to Raise Ambition: The Case of the EU ETS and the 2021 Review By Simon Quemin
  23. Electricity Consumption, Urbanization and Economic Growth in Nigeria: New Insights from Combined Cointegration amidst Structural Breaks By Solomon P. Nathaniel; Festus V. Bekun
  24. Social responsible mutual funds and lowcarbon economy By Diego Víctor de Mingo-López; Juan Carlos Matallín-Sáez; Amparo Soler-Domínguez; Emili Tortosa-Ausina
  25. Environmental Regulations in Private and Mixed Duopolies: Emission Taxes versus Green R&D Subsidies By Lee, Sang-Ho; Park, Chul-Hi
  26. Commitment and efficiency-inducing tax and subsidy scheme in the development of a clean technology By Mathias Berthod
  27. Learning from Power Sector Reform : The Case of Pakistan By Bacon,Robert W.
  28. Learning from Power Sector Reform : The Case of Uganda By Godinho,Catrina; Eberhard,Anton Adriaan
  29. The Impact of International Trade on the Price of Solar Photovoltaic Modules: Empirical Evidence By Ivan Hajdukovic
  30. New Insight into the Causal Linkage between Economic Expansion, FDI, Coal consumption, Pollutant emissions and Urbanization in South Africa By Udi Joshua; Festus V. Bekun; Samuel A. Sarkodie
  31. Políticas Regulatorias Aplicadas a Sectores de Infraestructura en Argentina By Gustavo Ferro; Andrea Castellano; Chaz Sardi
  32. A Dynamic Analysis of Industrial Energy Efficiency and the Rebound Effect By Amjadi, Golnaz; Lundgren, Tommy; Zhou, Whenchao
  33. Fuel Poverty and Health: a Panel Data Analysis By Romanic Baudu; Dorothee Charlier; Berangere Legendre
  34. Electrification and Women's Empowerment : Evidence from Rural India By Samad,Hussain A.; Zhang,Fan
  35. GTAP-Power 10 Data Base: A Technical Note By Chepeliev, Maksym
  36. Learning from Power Sector Reform : The Case of Kenya By Godinho,Catrina; Eberhard,Anton Adriaan
  37. The Opportunity Cost of Domestic Oil Consumption for an Oil Exporter: Illustration for Saudi Arabia By Fatih Karanfil; Axel Pierru
  38. Inégalités mondiales et changement climatique By Céline Guivarch; Nicolas Taconet
  39. Short-Term Inflation Projections Model and Its Assessment in Latvia By Andrejs Bessonovs; Olegs Krasnopjorovs
  40. Australia can be a superpower in a low-carbon world economy By Garnaut, Ross
  41. Proceedings of the International Conference and Young Researchers’ Forum: ANALYSIS OF FOSSIL FUEL SUBSIDIES IN KAZAKHSTAN By Nugumanova, Lyazzat
  42. A New Approach for Identifying Demand and Supply Shocks in the Oil Market By Kevin McNeil; Jan J. J. Groen; Menno Middeldorp
  43. Niche Acceleration driven by Expectation Dynamics among Niche and Regime Actors: China’s Wind and Solar Power Development By Kejia Yang; Ralitsa Hiteva; Johan Schot
  44. Emissions trading with rolling horizons By Simon Quemin; Raphael Trotignon
  45. The Effects of Pollution and Business Environment on Firm Productivity in Africa By Soppelsa,Maria Edisa; Lozano Gracia,Nancy; Xu,L. Colin
  46. Does participation in knowledge networks facilitate international market access? The case of offshore wind By Maria Tsouri; Jens Hanson; Håkon Endresen Normann
  47. Is Chinese Growth Overstated? By Maximo Camacho; Hunter L. Clark; Xavier X. Sala-i-Martin
  48. Improving oil price forecasts by sparse VAR methods By Krüger, Jens; Ruths Sion, Sebastian
  49. Air Pollution and Internal Migration: Evidence from Iranian Household Survey By Hassan F. Gholipour; Mohammad Reza Farzanegan; Mostafa Javadian
  50. Does e-commerce reduce traffic congestion? Evidence from Alibaba single day shopping event By Peng, Cong
  51. Environmental Economics: The 50th Anniversary of the Birth of This Field around the First Earth Day By Don Fullerton

  1. By: Vivek Srikrishnan; Yawen Guan; Klaus Keller; Richard S.J. Tol (Department of Economics, University of Sussex, Falmer, United Kingdom)
    Abstract: Understanding how reducing carbon dioxide (CO2) emissions impacts climate risks requires probabilistic projections of the baseline (“business-as-usual”) emissions. Previous studies deriving these baseline projections have broken important new ground, but are largely silent on two key questions: (i) What are the effects of deep uncertainties surrounding key assumptions such as remaining fossil fuel resources? (ii) Which uncertainties are the key drivers of the projected emissions and global warming? Here we calibrate a simple integrated assessment model using century-scale observations to project global emissions and committed temperature anomalies over the 21st century. We show that the projected emissions are highly sensitive to assumptions about available fossil fuel resources and decarbonization rates. We find that even under an optimistic, low-fossil fuel resources scenario, the median committed warming just by emitted CO2 in 2100 exceeds the 1.5 degree Celsius Paris Agreement target. Across the analyzed scenarios, the probability of exceeding the 2 degree Celsius target just from emitted CO2 ranges from 24% to 39%. The climate-system uncertainties and decarbonization rates are the key factors directly driving this uncertainty. Several economic growth parameters explain a large share of variability though their interactions.
    Keywords: integrated assessment, climate change, scenarios, markov chain monte carlo
    JEL: C11 Q54
    Date: 2020–03
  2. By: Olivier Rebenaque
    Abstract: By generating their own electricity with photovoltaic (PV) panels, households are less dependent on the grid. However, because there is a mismatch between PV generation and consumption, the economic benefits from the bill savings are usually low compared to the economic compensation of the excess electricity fed into the grid. The economic benefits may drop by the implementation of Time-of-Use tariffs or capacity tariff because the prices and the peak load might be higher in the evening at night when PV generation does not occur. Stationary batteries might increase PV self-consumption by storing PV production when electricity prices are low and releasing it during peak prices. However, Feed-in-tariffs applied on the excess generation does not encourage prosumers to invest in a battery. In this paper, we assess the profitability of a PV investment under the current French subsidy scheme. Then, we propose an alternative policy which guarantees an upfront purchase subsidy for the PV and battery investments but without Feed-in tariffs. Based on this alternative policy, we simulate economic benefits from various PV and battery capacities with different pricings. We show that PV self-consumption investment is more profitable with Feed-in tariffs than with a battery premium under Time-of-Use and capacity tariff. Nonetheless, the current subsidy scheme is costly compared to the implementation of a battery premium. Thus, some policy recommendations are provided to improve subsidy scheme.
    Keywords: Battery storage profitability, Self-consumption, Network tariffs, Simulation model, Energy policy, LCOE
    JEL: L59 Q48 L51
    Date: 2020
  3. By: Burlig, Fiona PhD; Bushnell, James PhD; Rapson, David PhD; Wolfram, Catherine PhD
    Abstract: The rapid electrification of the transportation fleet in California raises important questions about the reliability, cost, and environmental implications for the electric grid. A crucial first element to understanding these implications is an accurate picture of the extent and timing of residential electricity use devoted to EVs. Although California is now home to over 650,000 electric vehicles (EVs), less than 5% of these vehicles are charged at home using a meter dedicated to EV use. This means that state policy has had to rely upon very incomplete data on residential charging use. This report summarizes the first phase of a project combining household electricity data and information on the adoption of electric vehicles over the span of four years. We propose a series of approaches for measuring the effects of EV adoption on electricity load in California. First, we measure load from the small subset of households that do have an EV-dedicated meter. Second, we estimate how consumption changes when households go from a standard residential electricity tariff to an EV-specific tariff. Finally, we suggest an approach for estimating the effect of EV ownership on electricity consumption in the average EV-owning household. We implement this approach using aggregated data, but future work should use household-level data to more effectively distinguish signal from noise in this analysis. Preliminary results show that households on EV-dedicated meters are using 0.35 kWh per hour from Pacific Gas and Electric (PGE); 0.38 kWh per hour from Southern California Edison; and 0.28 kWh per hour from San Diego Gas and Electric on EV charging. Households switching to EV rates without dedicated meters are using less electricity for EV charging: 0.30 kWh per hour in PGE. Our household approach applied to aggregated data is too noisy to be informative. These estimates should be viewed as evidence that more focused analysis with more detailed data would be of high value and likely necessary to produce rigorous analysis of the role EVs are playing in residential electricity consumption.
    Keywords: Social and Behavioral Sciences, Electric vehicles, plug-in hybrid vehicles, energy consumption, demand, household, residential areas, policy analysis, empirical methods, data analysis
    Date: 2020–03–01
  4. By: Yongyang Cai
    Abstract: Integrated Assessment Models (IAMs) of the climate and economy aim to analyze the impact and efficacy of policies that aim to control climate change, such as carbon taxes and subsidies. A major characteristic of IAMs is that their geophysical sector determines the mean surface temperature increase over the preindustrial level, which in turn determines the damage function. Most of the existing IAMs are perfect-foresight forward-looking models, assuming that we know all of the future information. However, there are significant uncertainties in the climate and economic system, including parameter uncertainty, model uncertainty, climate tipping risks, economic risks, and ambiguity. For example, climate damages are uncertain: some researchers assume that climate damages are proportional to instantaneous output, while others assume that climate damages have a more persistent impact on economic growth. Climate tipping risks represent (nearly) irreversible climate events that may lead to significant changes in the climate system, such as the Greenland ice sheet collapse, while the conditions, probability of tipping, duration, and associated damage are also uncertain. Technological progress in carbon capture and storage, adaptation, renewable energy, and energy efficiency are uncertain too. In the face of these uncertainties, policymakers have to provide a decision that considers important factors such as risk aversion, inequality aversion, and sustainability of the economy and ecosystem. Solving this problem may require richer and more realistic models than standard IAMs, and advanced computational methods. The recent literature has shown that these uncertainties can be incorporated into IAMs and may change optimal climate policies significantly.
    Date: 2020–03
  5. By: Sobhani, S. Omid (Sharif University of Technology); Sheykhha, Siamak (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))
    Abstract: The integration of energy hubs – as an important component of future energy networks that will employ demand-side management techniques – has a key role in the process of efficiency improvement and reliability enhancement of power grids. In such power grids, energy hub operators need to optimally schedule the consumption, conversion, and storage of available resources based on their own utility functions. In sufficiently large networks, scheduling an individual hub can affect the utility of the other energy hubs. In this paper, the interaction between energy hubs is modeled as a potential game. Each energy hub operator (player) participates in a dynamic energy pricing market and tries to maximize his own payoff with regard to energy consumption satisfaction. We propose a distributed algorithm based on a potential game, which guarantees the existence of a Nash equilibrium. Furthermore, two different types of signaling are developed and simulation results are compared. Simulation results show that with the implementation of either setup the peak-to-average ratio between electricity networks and natural gas networks diminishes. An analysis of the results shows that either setup can have superiority over the other one with regard to generation costs, convergence rate, price level, and the stability perspective. Hence, energy providers and consumers can choose a favorable setup based on their respective needs.
    Keywords: Smart Energy Hub (SEH); Integrated Demand-Response Program; Distributed Demand-Side Management; Storage System
    JEL: C61 C72 Q31 Q41
    Date: 2018–11
  6. By: Thanasis Stengos (Department of Economics and Finance, University of Guelph, Guelph ON Canada); Nikos Fatouros (Department of Economics and Finance, University of Guelph, Guelph ON Canada)
    Abstract: We use a model of endogenous growth with vertical innovations in order to derive optimal energy policy under uncertainty. Innovation can be directed to dirty, green or nuclear technologies, which in turn can be used to produce different types of energy. We show that, nuclear energy usage is not only a necessary welfare maximizing condition but also a crucial determinant of economic growth in the long-run. In addition, we find no evidence supporting the Environmental Kuznets Curve hypothesis under optimal policy implementation. Lastly, empirical results based on a panel VAR specification suggest that increases in emissions are strongly persistent in the long-run. Thus, a worsening of environmental quality seems to create dynamics that lead to even higher levels of emissions in the future.
    Keywords: Growth, Nuclear Energy, Innovation
    JEL: O31 O44 Q42 Q55
    Date: 2020
  7. By: Cordella,Tito; Devarajan,Shantayanan
    Abstract: On June 1, 2017, President Trump announced the United States'withdrawal from the Paris agreement on climate change. Despite this decision, American firms continued investing in low-carbon technologies and some states committed to tougher environmental standards. To understand this apparent paradox, this paper studies how a weakening of environmental standards affects the behavior of profit-maximizing firms. It finds that a relaxation of emission standards (i) may increase firms'incentives to adopt clean technologies, but not to pollute less; (ii) may negatively affect industry profitability if it is perceived as temporary; and, when this is the case, (iii) the unilateral adoption of stricter standards by large states may increase the expected profitability of every firm.
    Keywords: Global Environment,Private Sector Economics,Climate Change and Health,Science of Climate Change,Climate Change and Environment,Energy and Mining,Energy Demand,Energy and Environment,Regulatory Regimes,Environmental Strategy,Environmental&Natural Resources Law,Judicial System Reform,Legal Reform,Legal Products,Social Policy,Legislation,Environmental Management
    Date: 2019–03–14
  8. By: KAPSARC, King Abdullah Petroleum Studies and Research Center (King Abdullah Petroleum Studies and Research Center)
    Abstract: India faces a pressing energy shortage. Despite rapid economic development, a large section of the population has little or no access to electricity, while the cost, reliability and availability of power constrain growth and investment in key sectors. As a result of this unmet demand, India has the potential to become one of the world’s largest consumers of natural gas. The commodity offers the government a cost-effective and environmentally sound answer to the country’s rising energy needs — yet the gas sector has struggled since 2010. The main obstacles to increasing the share of gas in the energy mix are a slowdown in domestic production, pricing and allocation issues, inefficient regulatory practices, and inadequate infrastructure.
    Keywords: City Gas, India, Natural Gas
    Date: 2019–03–08
  9. By: Adrien Fabre (UP1 - Université Panthéon-Sorbonne); Mouez Fodha; Francesco Ricci (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, UM - Université de Montpellier)
    Abstract: The production of energy from renewable sources is much more intensive in minerals than that from fossil resources. The scarcity of certain minerals limits the potential for substituting renewable energy for scarce fossil resources. However, minerals can be recycled,while fossil resources cannot. We develop an intertemporal model to study the dynamics of the optimal energy mix in the presence of mineral intensive renewable energy and fossil energy. We analyze energy production when both mineral and fossil resources are scarce,but minerals are recyclable. We show that the greater the recycling rate of minerals, the more the energy mix should rely on renewable energy, and the sooner should investment in renewable capacity take place. We confirm these results even in the presence of other better known factors that affect the optimal schedule of resource use: expected productivity growth in the renewable sector, imperfect substitution between the two sources of energy, convex extraction costs for mineral resources and pollution from the use of fossil resources.
    Keywords: Mineral Resources,Recycling,Energy Transition,Renewable and Non-Renewable Natural Resources
    Date: 2020–02
  10. By: Noha Elboghdadly (University of Bath, UK); Michael Finus (University of Graz, Austria)
    Abstract: Carbon leakage and the relocation of rms is one of the main concerns of governments when choosing their climate policy. In a strategic trade model with endogenous plant location, we study the effect of border carbon adjustments (BCAs) on equilibrium emission taxes in a non-cooperative policy game between two asymmetric countries. To this end, we compare a No-BCA regime with a BCA regime for two scenarios: a simultaneous and a sequential game. Without BCAs, a “race to the bottom” is the only Nash equilibrium. In a Stackelberg equilibrium, a second less negative outcome may emerge, which constitutes a Pareto-improvement to all governments. In this “wise chicken equilibrium”, the Stackelberg leader gives in, letting his/her firms relocate in order to avoid the race-to-the-bottom equilibrium. With BCAs, the race-to-the-bottom in carbon taxes can be avoided in the Nash equilibrium and also in Stackelberg equilibria global emissions are reduced. We show that the country imposing BCAs is always better off, global welfare usually increases with BCAs, even though the country on which BCAs are imposed may be better worse off. We characterize those conditions.
    Keywords: Endogenous plant location; global emissions; emission tax competition; border carbon adjustments
    JEL: F12 F18 H23 H87 Q58
    Date: 2020–03
  11. By: Hamisu S. Ali (Ahmadu Bello University, Zaria, Nigeria); Solomon P. Nathaniel (University of Lagos, Akoka, Nigeria); Gizem Uzuner (Eastern Mediterranean University, North Cyprus); Festus V. Bekun (Istanbul Gelisim University, Istanbul, Turkey); Samuel A. Sarkodie (Nord University Business School, Norway)
    Abstract: In this era of intensive electricity utilization for economic development, the role of urbanization remains inconclusive, especially in developing economies. Here, this study examined the electricity consumption and economic growth nexus in a trivariate framework by incorporating urbanization as an additional variable. Using the recent novel Maki cointegration test, Ng-Perron, Zivot-Andrews, and Kwiatkowski unit root tests along with FMOLS, DOLS and the CCR estimation methods, we relied on an annual frequency data from 1971-2014. Results from FMOLS, DOLS and the CCR regression confirm the electricity consumption-driven economic growth. This is desirable as Nigeria is heavily dependent on energy (electricity) consumption. A unidirectional causality from urbanization to electricity consumption and economic growth was found but the long-run empirical findings revealed urbanization impedes growth — a situation that has policy implications. The study highlights that though urbanization is a good predictor of Nigeria’s economic growth, however, the adjustment of the energy portfolio to meet the growing urban demand will curtail the adverse and far-reaching impact of urbanization on the economy.
    Keywords: Economic growth; Electricity consumption; Maki Cointegration; Dynamic Causality; Urbanization
    JEL: O41 C32 Q43
    Date: 2020–01
  12. By: Moritz A. Drupp; Martin C. Hänsel
    Abstract: Climate change not only impacts production and market consumption, but also the relative scarcity of non-market goods, such as environmental amenities. We study fundamental drivers of the resulting relative price changes, their potential magnitude, and their implications for climate policy in Nordhaus’ prominent DICE model, thereby addressing one of its key criticisms. We propose plausible ranges for these relative prices changes based on best available evidence. Our central calibration reveals that accounting for relative prices is equivalent to decreasing pure time preference by 0.6 percentage points and leads to a more than 50 percent higher social cost of carbon.
    Keywords: climate policy, discounting, non-market goods, social cost of carbon, substitutability
    JEL: Q01 Q54 H43 D61 D90
    Date: 2020
  13. By: Michael Fosco (Research and Statistics Group); Thomas Klitgaard
    Abstract: Almost half the U.S. merchandise trade deficit was tied to petroleum ten years ago. Oil prices were above $100 a barrel, the economy was doing well enough that oil consumption was growing despite high oil prices, and domestic oil production was falling. The U.S. petroleum trade balance has since narrowed substantially from $400 billion in 2008 to under $65 billion in 2017 as a result of lower oil prices, higher domestic production, and a prolonged period of flat-to-falling petroleum consumption. Going forward, the changes in domestic production and consumption have significantly moderated the impact of oil prices on the petroleum trade deficit. That is, changes in oil prices are increasingly redirecting income between domestic consumers and producers rather than between U.S. consumers and foreign oil producers.
    Keywords: oil petroleum trade balance imports exports consumption production
    JEL: E2
  14. By: Rana,Anshul; Khanna,Ashish
    Abstract: The challenge of power sector reform in the Arab Republic of Egypt has long been dominated by extremely high subsidies, with prices set well below the costs of supply. These subsidies have taken a variety of forms: explicit subsidies in the government budget, implicit subsidies in the underpricing of fuel supply (particularly natural gas) to the power sector, accumulation of arrears from the sector, poorly-maintained physical capital, and cross-subsidies across customer classes. Egypt's social contract was linked to expanding energy access with good quality supply based on public financing and huge subsidies. Egypt has been able to achieve universal access with more or less reliable power over the entire period, except when chronic underinvestment in the sector caused blackouts in 2011?14 at time of severe political uncertainty. The social compact came under pressure in 2014 when energy subsidies reached 6.8 percent of gross domestic product. Since then, the reform process has been revived based on new electricity, gas, and renewable energy laws; price and subsidy adjustments; structural reforms with a deliberately long time frame; and greater emphasis on the role of the private sector.
    Date: 2020–02–25
  15. By: Lee,Alan David; Gerner,Franz
    Abstract: Vietnam's power sector has developed rapidly since the 1990s to become a top performer among developing countries. This success has occurred mostly under a state-owned utility, Electricity Vietnam. Select market-oriented reforms to date have also had some positive impact. By the late 1990s, the Government realized the need to gradually introduce competition to ensure long-term sustainability without jeopardizing security of supply for the fast-growing economy. Vietnam's 2004 Electricity Law has provided the framework to develop a competitive power market, unbundle Electricity Vietnam, set prices that better reflect costs, promote private investment, and establish a regulatory authority. Today, state-owned entities continue to dominate the sector. Whereas the power market is partially competitive, improved operational efficiency and financial performance of generators in this market has contributed to keeping generation costs relatively low. Plans are broadly on track for further extensive reforms, including a clean energy transition. Lessons include that state-centric institutions can develop the power sector with top-level government commitment, highly-qualified staff, and consensus among sector institutions. Gradual reforms offer an opportunity to learn by doing; yet, the sequence of reforms matters. Introducing market mechanisms ahead of other elements may limit the market effectiveness and even make subsequent reform steps more difficult.
    Date: 2020–03–02
  16. By: Emre Hatipoglu; Thamir Alshehri; Matt Lipson; Scott Milne; Simon Pearson (King Abdullah Petroleum Studies and Research Center)
    Abstract: KAPSARC’s work on innovation in electricity transitions has focused on unbundling services in the electricity sector (KAPSARC 2016) and developing the microeconomic foundation for a reliability service. Our research has investigated the experiences of industries resembling the electric power sector and those involved in the sharing economy that have recently faced technological disruptions. In Fuentes (2016), we argued that reallocating risk across the electricity market, and the apparent paradox between (spare) capacity and price signals (scarcity) could open up a new role for incumbent electricity firms.
    Keywords: Saudi Arabia, Economic Modeling, Saudi Vision 2030
    Date: 2020–03–11
  17. By: Ekaterina Abramova; Derek Bunn
    Abstract: Intra-day price spreads are of interest to electricity traders, storage and electric vehicle operators. This paper formulates dynamic density functions, based upon skewed-t and similar representations, to model and forecast the German electricity price spreads between different hours of the day, as revealed in the day-ahead auctions. The four specifications of the density functions are dynamic and conditional upon exogenous drivers, thereby permitting the location, scale and shape parameters of the densities to respond hourly to such factors as weather and demand forecasts. The best fitting and forecasting specifications for each spread are selected based on the Pinball Loss function, following the closed-form analytical solutions of the cumulative distribution functions.
    Date: 2020–02
  18. By: Asani Sarkar; Brandon Li (Markets Group)
    Abstract: Oil prices plunged 65 percent between July 2014 and December of the following year. During this period, the yield spread?the yield of a corporate bond minus the yield of a Treasury bond of the same maturity?of energy companies shot up, indicating increased credit risk. Surprisingly, the yield spread of non?energy firms also rose even though many non?energy firms might be expected to benefit from lower energy?related costs. In this blog post, we examine this counterintuitive result. We find evidence of a liquidity spillover, whereby the bonds of more liquid non?energy firms had to be sold to satisfy investors who withdrew from bond funds in response to falling energy prices.
    Keywords: Credit Risk; Liquidity Spillovers; Oil Prices
    JEL: G1 G3
  19. By: Hackbarth, André (Reutlingen Energy Center for Distributed Energy Systems and Energy Efficiency); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))
    Abstract: This paper examines joint consumer purchasing decisions of vehicle type and fuel type based on a dataset from a Germany-wide survey among 1500 potential car buyers. The goal is to study the buyer segments that are considering to purchase the different types of vehicles and to identify the main determinants influencing the joint choice decision: socio-demographic and household characteristics, attitudes and preferences, as well as vehicle-related attributes. Based on a nested logit model, our results suggest that although German car buyers’ are very heterogeneous regarding their preferences, several similarities are found between buyers of specific vehicle types (10 vehicle classes) and specific fuel types (gasoline, diesel, alternative fuel), e.g. smaller cars and alternative fuel vehicles (AFVs) have commonalities regarding individual’s environmental awareness/behavior and fuel consumption/costs. Policy-makers, when tailoring their policies, can benefit from making use of the specific insights gained from this particularly comprehensive study, and the comparisons made with the German and international scientific literature on the topic. For instance, the similarities between buyers preferring specific fuel types and specific vehicle types can be used for tailorized measures to incentivize individuals’ vehicle type shifting (e.g from larger to smaller vehicles), fuel type switching (e.g. from fossil-fuelled vehicles to AFVs), or both.
    Keywords: Discrete choice; Revealed preferences; Stated intentions; Nested logit model; Alternative fuel vehicles; Vehicle segments
    JEL: C35 C38 D12 M38 R48
    Date: 2018–12
  20. By: Jonathon M. Becker (Division of Economics and Business, Colorado School of Mines)
    Abstract: Many sectors of the economy that are targets of emissions reduction policy tend to be subject to price-responsive demand, long-lived capital, capacity constraints, and foresighted decision-making. I explore these features together, in conjunction with a tradable performance standard (TPS). First, I provide a complete characterization of the short-run and steady-state output responses analytically. Second, I validate the intermediate analytical results, explore the dynamics of the transition from pre- to post-policy steady-state, and discuss the welfare implications using a stylized numerical equilibrium model calibrated to a representative electricity sector. I show that the difference in the present value of total social surplus gains between a TPS and a period-over-period damage equivalent cap (CAP) is small relative to total social surplus gains from either policy. Most interestingly, under all but the smallest discount rates, the value of the steady-state perpetuity under the TPS is greater than the CAP.
    Keywords: tradable performance standards, output-based rebating, emissions intensity standard, emissions cap, investment, dynamic complementarity problem, electricity
    JEL: C61 H23 Q41 Q48 Q52 Q58
    Date: 2020–03
  21. By: Carozzi, Felipe; Roth, Sefi
    Abstract: We study whether urban density affects the exposure of city dwellers to ambient air pollution using satellite-derived measures of air quality for the contiguous United States. For identification, we rely on an instrumental variable strategy, which induces exogenous variation in density without affecting pollution directly. For this purpose, we use three variables measuring geological characteristics as instruments for density: earthquake risks, soil drainage capacity and the presence of aquifers. We find a positive and statistically significant pollution-density elasticity of 0.13. We also assess the health implications of our findings and find that doubling density in an average city increases annual mortality costs by as much as $630 per capita. Our results suggest that, despite the common claim that denser cities tend to be more environmentally friendly, air pollution exposure is higher in denser cities. This in turn highlights the possible trade-off between reducing global greenhouse gas emissions and preserving environmental quality within cities.
    Keywords: air pollution; urban congestion; density; health
    JEL: Q53 R11 I10
    Date: 2019
  22. By: Simon Quemin
    Abstract: Unlike standard supply-side policies, the market stability reserve (MSR) can be used as a potent means of raising climate ambition. We calibrate an emissions trading model to the EU ETS and show that allowing firms to use rolling finite planning horizons can replicate past annual price and banking developments well compared to a standard infinite horizon, including the 2018 price rally. When firms have bounded foresight, indirectly raising ambition through the MSR is not equivalent to directly raising ambition through the emissions cap trajectory. Leveraging the MSR to raise ambition can be efficiency improving as it partially compensates for bounded foresight by frontloading abatement efforts so we analyze its interdependence with the cap trajectory to exploit synergies and minimize regulatory costs. Additionally, we quantitatively assess and compare changes in the MSR parameters for the 2021 review. In any case, MSR-induced resilience to demand shocks remains limited and one-sided by design.
    Keywords: Emissions trading, Rolling horizon, Raising ambition, Market stability reserve, EU ETS
    JEL: D47 D81 H32 Q58
    Date: 2020
  23. By: Solomon P. Nathaniel (University of Lagos, Akoka, Nigeria); Festus V. Bekun (Istanbul Gelisim University, Istanbul, Turkey)
    Abstract: The study explores the link between electricity consumption, urbanization and economic growth in Nigeria from 1971-2014. The bounds test and the Bayer and Hanck (2013) cointegration tests affirm cointegrating relationship. Electricity consumption increases economic growth in both time periods, while the impact of urbanization appears to inhibit growth. The fully modified OLS (FMOLS), dynamic OLS (DOLS) and the canonical cointegrating regression (CCR) confirm the robustness of the findings. The vector error correction model (VECM) Granger causality test supports the neutrality hypothesis in the short run and the feedback hypothesis among the variables in the long run. Therefore, policies to ensure efficient electricity supply, curb rapid urbanization and promote sustainable economic growth were suggested.
    Keywords: Electricity Consumption; Urbanization; Economic Growth;ARDL; Nigeria
    Date: 2020–01
  24. By: Diego Víctor de Mingo-López (Department of Finance and Accounting, Universitat Jaume I, Castellón, Spain); Juan Carlos Matallín-Sáez (Department of Finance and Accounting, Universitat Jaume I, Castellón, Spain); Amparo Soler-Domínguez (Department of Finance and Accounting, Universitat Jaume I, Castellón, Spain); Emili Tortosa-Ausina (IVIE and Department of Economics, Universitat Jaume I, Castellón, Spain)
    Abstract: Sustainable investment responds to claims for carbon and climate-neutral societies. To addresses the urgency around climate change and provide more qualified information to investors, Morningstar has developed the Low Carbon Designation (LCD), an indicator that the companies held in a portfolio are in general alignment with the transition to a low-carbon economy. It is assigned to portfolios that have low carbon-risk and fossil-fuel exposure scores. This study takes this a step further by examining the relationship between these scores and financial performance. With this aim, we analyze 3,920 socially responsible mutual funds in the world. Results show differences in financial performance, according scores and investment areas. We find evidence that funds characterized with higher levels of sustainability achieved better performance than funds more exposed to carbon and fossil fuel involved companies. Therefore we provide insights on the informativeness of these new scores for fund selection by investors, for a fairer comparison between socially responsible and conventional funds -since that sustainability improves performance- and for developing low carbon economies.
    Keywords: environmental, low-carbon, mutual fund, performance, sustainability
    JEL: G11 G17 G23 G2 N20 Q56
    Date: 2020
  25. By: Lee, Sang-Ho; Park, Chul-Hi
    Abstract: In the presence of R&D spillovers, we compare environmental regulations between an emission taxes and green R&D subsidies in private and mixed duopoly markets. We show that the green R&D subsidy is better (worse) than the emission tax when the green R&D cost is low (high) irrespective of the R&D spillovers, whereas the existence of a public firm encourages the government to adopt the subsidy policy. We then show that the optimal policy choice depends on the level of the R&D cost and the degree of R&D spillovers. In particular, when the R&D cost is high and the spillover rate is (not) weak, the government should choose the emission tax and (not) privatize the public firm. However, when the R&D cost is low, such a privatization policy is not desirable to society irrespective of the R&D spillovers.
    Keywords: emission tax; green R&D subsidy; R&D spillovers; privatization policy
    JEL: H2 L3 Q58
    Date: 2020–02
  26. By: Mathias Berthod (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: This paper analyses the optimal environmental policy design in situations where the regulator - hereafter a government - can not strongly commit to announcements about future tax and subsidy levels. The motivation is that long-run perspectives of environmental policies often face short run concerns. One consistent illustration in Europe is related to the french government which cancelled the carbon tax increase for year 2019 following recent demonstrations of the yellow vest movement. Other examples include the case of the australian government abolishing the carbon tax in 2014, or the spanish government abruptly cancelling the renewable energy subsidies in 2012. I specifically consider environmental policies which aim at supporting the transition from the use of dirty technologies to clean technologies by subsidizing innovation. The interplay between innovation and environmental policies has been extensively addressed.1 However, a large share of the literature abstracts from the issue of commitment. In most papers, the analysis consists in comparing the optimal policy and a business-as-usual scenario (see Bosetti et al., 2009 ; Edenhoffer et al., 2006 ; Popp, 2006). Yet several authors point out that the government lack of commitment may lead to inefficient environmental innovation (see Wirl, 2013 ; Montero, 2011). The question thus arises: if a government can not strongly commit to announcements about future tax and subsidy levels, is there an efficient policy design? And, if so, how does it differ from the case of strong commitment?
    Date: 2020
  27. By: Bacon,Robert W.
    Abstract: Pakistan's power sector underwent a substantial, if protracted, reform process. Beginning with an independent power producer program in 1994, the full unbundling of the national vertically integrated power and water utility, the Water and Power Development Authority, and the establishment of a regulatory entity, the National Electric Power Regulatory Authority, followed in 1997, paving the way for the eventual privatization of one major distribution utility, Karachi Electric, in 2005. Plans to privatize the remaining distribution utilities were shelved following the controversy surrounding the Karachi Electric transaction. A single buyer model has been in operation since the sector restructuring, with the Central Power Purchasing Agency fully separated from transmission and dispatch (the National Transmission and Dispatch Company) in June 2015. Despite these major steps, Pakistan has continued to suffer from inadequate capacity and other constraints, leading to large and frequent blackouts. At the heart of the impasse is the so-called"circular debt"crisis, whereby distribution utilities struggling to collect revenues and meet regulatory targets for transmission and distribution losses default on their payments to generators, and the sector is periodically bailed out by the government once losses accumulate to intolerable levels, at high cost to the exchequer. This dynamic has undermined incentives for utilities to improve their efficiency, while discouraging generators from investing in new capacity to address supply shortages. In the meantime, little has been done to accelerate access to electricity to the significant share of unserved population in rural areas.
    Keywords: Energy Policies&Economics,Economics and Finance of Public Institution Development,Privatization,De Facto Governments,Democratic Government,Public Sector Administrative&Civil Service Reform,State Owned Enterprise Reform,Energy Privatization,Public Sector Administrative and Civil Service Reform,Energy and Mining,Energy Demand,Energy and Environment,Energy Sector Regulation,Power&Energy Conversion
    Date: 2019–05–06
  28. By: Godinho,Catrina; Eberhard,Anton Adriaan
    Abstract: Uganda's power sector structure is among the most sophisticated in Sub-Saharan Africa, and Uganda is one of only a handful of countries in the region where tariffs are close to being cost reflective. While reforms were swift and comprehensive, following the 1999 Electricity Act, significant difficulties were encountered along the way that prevented the benefits of reform from materializing until much later. The failed first attempt with the Bujagali Hydropower independent power producer left the country heavily exposed to the 2005/06 and 2010/12 droughts, which in turn created difficulties for the new private distribution utility, Umeme, and led to a relaxation of the regulatory performance targets for the concession. This situation led to a buildup of frustration with the new operator and the launch of two public enquiries, which recommended termination of the concession. In 2012, with the easing of drought conditions and the completion of the Bujagali Hydropower Project following a second independent power producer arrangement, there was improvement in the availability of power. This made it possible to set more demanding performance targets for the concessionaire, Umeme, which fed through into substantial improvements in operational efficiency and accelerating service coverage. Although the reform model was eventually able to deliver results, the associated cost was comparatively high. Furthermore, the extension of the private concession model to financially unviable rural areas did not prove to be successful. Access rates began to pick up only following the adoption of a revised approach in 2012, built around government-led and donor-funded expansion of rural networks.
    Keywords: Energy Policies&Economics,Energy Sector Regulation,Energy Demand,Energy and Mining,Energy and Environment,Rural and Renewable Energy,Water and Energy,Hydro Power,Renewable Energy,Rural Energy
    Date: 2019–04–17
  29. By: Ivan Hajdukovic (University of Barcelona)
    Abstract: This paper provides an empirical examination on the relationship between international trade and the price of solar photovoltaic (PV) modules. Using a sample of 15 countries over the period 2006-2015, we propose a dynamic linear panel data model based on a new specification, including number of relevant factors influencing solar PV module prices. The empirical analysis reveals that an increase in imports of solar PV cells and modules is associated with a decline in solar PV module prices. This finding suggests that international trade could lead to further price reductions, thus fostering the deployment of solar PV technology. The use of renewable energy can in turn have positive effects on environmental quality by reducing the emission of detrimental greenhouse gases generated by the consumption of fossil fuels. The empirical part reveals several other important findings. Market and technological development are key factors explaining the decline in solar PV module prices. Government policies such as public budget for R&D in PV and feed-in tariff for solar PV are effective in reducing the price of solar PV modules. Moreover, an increase in renewable energy consumption has a negative influence on solar PV module prices.
    Keywords: Dynamic panel data models,Solar photovoltaic module prices,Trade and Environment
    Date: 2020–02–22
  30. By: Udi Joshua (Federal University Lokoja, Kogi state, Nigeria); Festus V. Bekun (Istanbul Gelisim University, Istanbul, Turkey); Samuel A. Sarkodie (Nord University Business School, Norway)
    Abstract: This study examines the relationship between foreign direct investment inflows and economic growth by incorporating the role of urbanization, coal consumption and CO2 emissions as additional variables to avoid omitted variable bias. The different order of integration from the unit root test suggested the adoption of a dynamic autoregressive distributed lag bounds testing procedure. The results confirmed the existence of a long-run equilibrium relationship between the outlined series within the period under investigation with a high speed of convergence. The ARDL equilibrium relationship shows that coal consumption is the largest emitter of carbon dioxide emissions in both short- (0.77%) and long- (0.86%) run. Economic growth was found to escalate CO2 emission by approximately 0.27% (in the short-run) and 0.19% (in the long-run). The Granger causality test indicates a non-causal effect between FDI inflow and economic expansion in South Africa, which implies that FDI is not a driver of economic advancement. The empirical study shows a bidirectional causal effect between urbanization and foreign direct investment. This suggests that urban development stimulates foreign direct investment in South Africa. The findings reveal a one-way link from GDP to coal consumption, suggesting economic prosperity promotes coal consumption. The study underscores that economic development and the attraction of more economic investments is in part, dependent on the conservative policy, development of urban centres through infrastructural improvement, and establishing industrial zones.
    Keywords: South Africa; coal consumption; CO2 emissions; climate change; urbanization
    Date: 2020–01
  31. By: Gustavo Ferro; Andrea Castellano; Chaz Sardi
    Abstract: Resumen: Estudiamos la evolución reciente de la prestación y regulación de servicios de infraestructura en Argentina. Nos concentramos tras un análisis global del proceso, en cuatro servicios domiciliarios: electricidad, gas natural de red, telecomunicaciones y agua y saneamiento. Mostramos los cambios de enfoque y el fracaso de sucesivas políticas de signos contrarios. Evidenciamos que la situación macroeconómica no ha sido ajena a la imposibilidad de tener servicios públicos autofinanciados, eficientes y accesibles, en particular el uso de controles sobre las tarifas como herramienta antiinflacionaria. Abstract: We study the recent evolution of the utilities services and regulation in Argentina. We focus, after a global approach to the issue in four domiciliary services: electricity, natural gas by piped network, telecommunications and water and sanitation. We show the changing policy approach and the failure to successive contradictory policies. We highlight the connection between these failures in having self-financing, efficient and affordable services, and macroeconomic problems, particularly, the use of tariff control as an anti-inflationary tool.
    Keywords: Regulation, Utilities, Infrastructure, Argentina
    Date: 2020–02
  32. By: Amjadi, Golnaz (CERE - the Center for Environmental and Resource Economics); Lundgren, Tommy (CERE - the Center for Environmental and Resource Economics); Zhou, Whenchao (CERE - the Center for Environmental and Resource Economics)
    Abstract: Energy efficiency improvement (EEI) is known as a cost-effective measure to meet energy, climate change and sustainable development targets. However, behavioral responses to such improvements referred to as energy rebound effect may change the emission and energy saving gains expected from EEI. Despite broad consensus around the existence of energy rebound effect, significant divergence exists on how to measure this effect, which matters in order to set up realistic energy and climate policies. In this study, we propose a new approach to measure the energy rebound effect in both the short and the long run using a two-stage procedure, applied to a firm-level data set from Swedish manufacturing industry over the period 1997–2008. In the first stage, we use data envelopment analysis (DEA) in order to obtain energy efficiency scores. In the second stage, we estimate energy rebound effect using dynamic panel data regression model. We show that in the short run, partial rebound effects exist within all manufacturing sectors, meaning that the rebound effect decreases, but does not totally offset, the potential energy and emission savings expected from EEI. In the long run, our results suggest that rebound effects decrease within most of the sectors.
    Keywords: Energy Efficiency Improvement; Rebound Effect; Data Envelopment Analysis
    JEL: D21 D22 Q41
    Date: 2020–03–02
  33. By: Romanic Baudu (Université Savoie Mont-Blanc); Dorothee Charlier (Université Savoie Mont-Blanc); Berangere Legendre (Université Savoie Mont-Blanc)
    Abstract: Protecting and improving health and mitigation of climate change have a shared agenda. In this paper, we contribute to the literature by assessing the link between fuel poverty and health over a lengthy recent period. Using dynamic probit models, we examine the influence of fuel poverty on health. We control for state dependency of health as we regard health status to be closely related to previous health trajectories. Considering that unobserved heterogeneity might influence health status and fuel poverty simultaneously, we have corrected for the endogeneity bias that could affect our results. We conclude that being fuel-poor increases the risk of bad health by slightly more than a factor of 7 for those whose health is already poor and by 1.82 for those in good health. For policy makers, combatting fuel poverty reduces sources of discomfort which might also severely affect the health of a dwelling’s inhabitants.
    Keywords: Fuel Poverty, Health, Dynamic Probit, Panel dataset,
    JEL: C33 I14 Q41
    Date: 2020–02
  34. By: Samad,Hussain A.; Zhang,Fan
    Abstract: Electrification has been shown to accelerate opportunities for women by moving them into more productive activities, but whether improvements in economic outcomes also change gender norms and practices within the household remains unclear. This paper investigates the causal link between electricity access and women's empowerment, using a large gender-disaggregated data set on India. Empowerment is measured by women's decision-making ability, mobility, financial autonomy, reproductive freedom, and social participation. Using propensity score matching, the study finds that electrification enhances all measures of women's empowerment and is associated with an 11-percentage point increase in the overall empowerment index. Employment and education are identified as the two most important causal channels through which electrification enables empowerment.
    Keywords: Energy Policies&Economics,Gender and Development,Electric Power,Educational Sciences,Health Care Services Industry
    Date: 2019–03–28
  35. By: Chepeliev, Maksym
    Abstract: The purpose of this note is to document changes introduced to the GTAP-Power 10 database construction process in addition to the GTAP-Power build approach developed in Peters (2016). First, in Peters (2016) output of the electricity and heat generation sector in GTAP was split using electricity generation data only. We use heat generation volumes data to provide a more representative sectoral split and better concordance with GTAP definitions. Second, we consider data on country and year-specific shares of transformation and distribution costs in electricity tariff for 80 countries. Finally, for every reference year, we update the levelized costs of electricity generation.
    Date: 2020
  36. By: Godinho,Catrina; Eberhard,Anton Adriaan
    Abstract: Two successive waves of reform have fundamentally altered the structure and organization of Kenya's vibrant power sector, which boasts a tradition of strong technical and commercial performance. In the first wave -- beginning in 1996 and largely donor-driven -- policy and regulatory functions were separated from commercial activities; generation was unbundled from transmission and distribution; cost-reflective tariffs were introduced; and generation was liberalized. In the second wave -- beginning in 2002 and led by domestic reform champions -- the thrust of first-wave reforms was continued, with the strengthening of independent regulation, partial privatization of the generation company (KenGen), and establishment of complementary entities. Although the government retains majority ownership of the largest power utilities in the country (Kenya Power, ~51 percent; KenGen, ~70 percent), Kenya has been able to position itself as one of the foremost destinations in the region for private energy investment. The reforms have improved the operational efficiency of the sector, increased cost recovery, and captured a significant amount of private sector investment. At the same time, the state has remained an important investor, playing a pivotal role in expanding generation capacity, scaling up electrification at an exceptionally rapid pace, and leading diversification toward geothermal energy. Political influence in sector decisions remains significant, in planning and tariff reviews.
    Keywords: Energy Demand,Energy and Mining,Energy and Environment,Energy Policies&Economics,Energy Sector Regulation,Natural Disasters,Power&Energy Conversion
    Date: 2019–04–16
  37. By: Fatih Karanfil; Axel Pierru (King Abdullah Petroleum Studies and Research Center)
    Abstract: When appraising investment projects from a public perspective, a barrel of oil displaced from or added to domestic consumption has to be valued at its opportunity cost. This paper develops a partial-equilibrium framework to assess the opportunity cost of domestic oil consumption for an oil-exporting country. The framework takes into account that (i) the usual ‘small economy’ assumption does not necessarily hold, (ii) the domestic oil price can be set either at a fixed level or as a function of the international price, and (iii) oil production, level of exports, or domestic consumption can be constrained. We derive the opportunity cost for each case considered and a formula quantifying the net welfare gains from reforming the domestic oil price
    Keywords: Dometic Pricing, Oil, Opportunity Cost, Shadow Price, Saudi Arabia
    Date: 2020–03–01
  38. By: Céline Guivarch (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique); Nicolas Taconet (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Dans cet article, nous synthétisons les travaux récents sur les liens entre climat et inégalités pour montrer comment les enjeux liés aux impacts et à l'atténuation du changement climatique affectent les inégalités, à la fois entre pays et entre individus. Dans un premier temps, nous analysons les inégalités d'exposition et de vulnérabilité aux impacts du changement climatique. Puis, nous nous intéressons aux inégalités dans la contribution aux émissions de gaz à effet de serre entre pays et entre individus. Dans un dernier temps, nous montrons comment les inégalités face au changement climatique permettent d'éclairer l'équité de la répartition des actions pour lutter contre le changement climatique.
    Date: 2020–01–16
  39. By: Andrejs Bessonovs (Bank of Latvia); Olegs Krasnopjorovs (Bank of Latvia)
    Abstract: This paper develops a Short-Term Inflation Projections (STIP) model, which captures cointegrated relationships between highly disaggregated consumer prices and their determinants. We document a significant pass-through of domestic labour costs, crude oil and global food commodity prices to consumer prices in Latvia. We also assess the model's forecast accuracy of Latvia's inflation during 2014–2018 and find that the STIP model statistically significantly outperforms a na?ve benchmark model in real time.
    Keywords: inflation forecasting, autoregressive distributed lag model, pass-through, oil prices, food commodity prices, labour costs
    JEL: C32 C51 C52 C53 E31
    Date: 2020–01–29
  40. By: Garnaut, Ross
    Abstract: To John Crawford, the role of economics was to illuminate real world conditions and improve policy options. At a time of historic change in climate and Australia’s international environment, we need Crawford’s approach to economics as never before. Growth in global population and incomes, and climate change, are putting pressure on land and water resources. Transformation of land use and food consumption are important dimensions of the response to climate change. Australian research skills in agriculture, biology, botany, engineering and economics can secure the Australian transformation and extend it internationally. The challenges of climate change are especially acute and the opportunities exceptionally large in Australia. The drying and warming of southern Australia is undermining established agricultural and pastoral activities. But rural and provincial Australia have global comparative advantage of considerable value in activities the value of which will be greatly increased in the zero-carbon emissions world that is necessary to limit damage from climate change: renewable energy resources; opportunities for biomass production as a zero-emissions source of inputs into industrial activities; and the opportunity for sequestration of carbon in Australian soils, pastures, woodlands and savannahs, and forests.
    Keywords: Environmental Economics and Policy
    Date: 2019–08
  41. By: Nugumanova, Lyazzat
    Keywords: International Development, Resource /Energy Economics and Policy
  42. By: Kevin McNeil; Jan J. J. Groen; Menno Middeldorp
    Abstract: An oil-price spike is often used as the textbook example of a supply shock. However, rapidly rising oil prices can also reflect a demand shock. Recognizing the difference is important for central bankers. A supply-driven increase in the price of oil can result in higher unemployment and inflation, leaving central bankers with the difficult decision to loosen policy, tighten policy, or not respond at all. A demand-driven increase reflecting global growth may support the case for tighter policy. In this post, we describe an approach for decomposing oil price changes into supply and demand shocks using financial market data.
    Keywords: Oil prices; dynamic factors; demand and supply
    JEL: F00 G1
  43. By: Kejia Yang (SPRU (Science Policy Research Unit), University of Sussex, Brighton, BN1 9SL, UK); Ralitsa Hiteva (SPRU (Science Policy Research Unit), University of Sussex, Brighton, BN1 9SL, UK); Johan Schot (Centre for Global Challenges, Utrecht University, Utrecht, 3512 BK, the Netherlands)
    Abstract: This paper addresses the question how does the alignment of expectations between niche and regime actors unfold during niche development process, and how it shapes the niche development process? In this paper we offer a theoretical framework with three alignment patterns: strong, medium-strong and weak alignment, based on niche and regime actors’ expectation structures. The research aims to establish whether the alignment patterns match three distinct stages of niche development: slow niche development; moderate niche development and substantial niche acceleration. We propose a 16% threshold in terms of adoption for niche acceleration. We apply the conceptual framework to two long-term cases, of wind and solar power development in China between 2000 and 2017. These present two independent cases with different stages of niche development during the studied period, but in the end both show niche acceleration. Our two cases suggest that although alignment patterns between both cases differ, they match niche development phases. Strong alignment does go hand in hand with niche acceleration. Overall, this paper contributes to both a conceptual and methodological understanding of how the alignment patterns between niche and regime actors’ expectations contribute to niche acceleration.
    Keywords: Niche acceleration; Expectations; China; Wind power; Solar power
    Date: 2020–03
  44. By: Simon Quemin; Raphael Trotignon
    Abstract: We build a model of competitive emissions trading under uncertainty with supply-side control. Firms can use rolling planning horizons to deal with uncertainty and can also exhibit bounded responsiveness to the control. We tailor the model to the EU ETS, calibrate it to 2008-2017 market developments and find that a rolling horizon is able to reconcile the banking dynamics with discount rates implied from futures' yield curves. We evaluate the 2018 market reform, decompose the impacts of its main features and quantify how they hinge on the firms' horizon and responsiveness. We highlight important implications for policy design and evaluation.
    Keywords: Emissions trading, Rolling horizons, Bounded rationality, Decision-making under uncertainty, Supply-side control, EU-ETS
    Date: 2019
  45. By: Soppelsa,Maria Edisa; Lozano Gracia,Nancy; Xu,L. Colin
    Abstract: This paper explores the links between city competitiveness and air pollution and the business environment. Because competitive cities not only attract more productive firms, but also facilitate their business, the paper look at firm performance as a proxy for city competitiveness. It focuses on African firms, because this region is developing fast and experiencing increasing pollution levels and the effects of agglomeration economies. The analysis finds two interesting results. First, the negative association between air pollution and firm performance can be seen at lower than expected levels of pollution. Second, the effects of capacity agglomeration on labor productivity growth are stronger compared to other regions. These findings suggest that cities in this region should address pollution issues soon, as they continue to grow fast and pollution levels are becoming an increasing concern.
    Date: 2019–04–30
  46. By: Maria Tsouri (TIK Centre for Technology Innovation and Culture, University of Oslo, Oslo, Norway); Jens Hanson (TIK Centre for Technology Innovation and Culture, University of Oslo, Oslo, Norway); Håkon Endresen Normann (TIK Centre for Technology Innovation and Culture, University of Oslo, Oslo, Norway)
    Abstract: This article explores the effects of knowledge network participation on firms` international market access. We use a unique dataset comprising Norwegian firm data on RD&D (research, development and demonstration) and market participation in offshore wind. The empirical results show that participating in pilot and demonstration projects positively affects firms’ presence in international markets, while we do not observe the same positive effect for R&D projects. However, the econometric evidence shows that increasing extents of international collaborators, particularly from countries with home markets, contributes to a positive effect of R&D project participation on market access, while negative effects are observed for domestic collaborators. The results suggest that transnational knowledge linkages constitute an important mechanism for international market access, especially for countries with weak or absent domestic markets. We suggest that RD&D policy design could benefit from ensuring international collaboration, particularly with partners in countries with domestic markets, and support for demonstration activities.
    Date: 2020–03
  47. By: Maximo Camacho; Hunter L. Clark (Research and Statistics Group); Xavier X. Sala-i-Martin
    Abstract: For analysts of the Chinese economy, questions about the accuracy of the country?s official GDP data are a frequent source of angst, leading many to seek guidance from alternative indicators. These nonofficial gauges often suggest Beijing?s growth figures are exaggerated, but that conclusion is not supported by our analysis, which draws upon satellite measurements of the intensity of China?s nighttime light emissions?a good proxy for GDP growth that is presumably not subject to whatever measurement errors may affect the country?s official economic statistics.
    Keywords: nighttime lights; GDP; China
    JEL: F00
  48. 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.
    Keywords: oil price prediction,vector autoregression,regularization
    JEL: C32 Q47
    Date: 2019
  49. By: Hassan F. Gholipour; Mohammad Reza Farzanegan; Mostafa Javadian
    Abstract: The purpose of this study is to examine the impact of air pollution (measured by satellite data of Aerosol Optical Depth (AOD)) on net outmigration. Using data from the 2011 and 2016 National Population and Housing Censuses for 31 provinces of Iran and applying a panel fixed effects estimation method, our results show that AOD has a positive and significant impact on net outmigration. We also find that higher levels of economic activities in provinces discourage outmigration.
    Keywords: air pollution, migration, Iran
    JEL: Q53 R23
    Date: 2020
  50. By: Peng, Cong
    Abstract: Traditional retail involves traffic both from warehouses to stores and from consumers to stores. Ecommerce cuts intermediate traffic by delivering goods directly from the warehouses to the consumers. Although plenty of evidence has shown that vans that are servicing e-commerce are a growing contributor to traffic and congestion, consumers are also making fewer shopping trips using vehicles. This poses the question of whether e-commerce reduces traffic congestion. The paper exploits the exogenous shock of an influential online shopping retail discount event in China (similar to Cyber Monday), to investigate how the rapid growth of e-commerce affects urban traffic congestion. Portraying e-commerce as trade across cities, I specified a CES demand system with heterogeneous consumers to model consumption, vehicle demand and traffic congestion. I tracked hourly traffic congestion data in 94 Chinese cities in one week before and two weeks after the event. In the week after the event, intra-city traffic congestion dropped by 1.7% during peaks and 1% during non-peak hours. Using Baidu Index (similar to Google Trends) as a proxy for online shopping, I found online shopping increasing by about 1.6 times during the event. Based on the model, I find evidence for a 10% increase in online shopping causing a 1.4% reduction in traffic congestion, with the effect most salient from 9am to 11am and from 7pm to midnight. A welfare analysis conducted for Beijing suggests that the congestion relief effect has a monetary value of around 239 million dollars a year. The finding suggests that online shopping is more traffic-efficient than offline shopping, along with sizable knock-on welfare gains.
    Keywords: e-commerce; traffic congestion; heterogeneous consumers; shopping vehicle demand; air pollution
    JEL: R40 O30
    Date: 2019–08
  51. By: Don Fullerton
    Abstract: How was the birth of “Environmental Economics” related to the first Earth Day fifty years ago (April 22, 1970)? This short note introduces some ideas about an amazing burst of intellectual activity from 1968 to 1974. Environmental economics was not a field of economics before this brief period, but the main field journal was up and running by the end of it. This note on “environmental economics” will be published in the forthcoming “Earth 2020: An Insider’s Guide to a Rapidly Changing Planet” by Philippe D. Tortell (Cambridge: Open Book Publishers), along with a score of other notes about the fifty years of progress on air pollution, water, climate, oceans, fish, land, forest, biodiversity, plastics, contaminants, space junk, geo-engineering, media, law, and politics.
    Keywords: environment, policy, climate, Earth Day
    JEL: Q20 Q30 Q40 Q50
    Date: 2020

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