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on Energy Economics |
| By: | Hammed Oluwaseyi Musibau; Maria Yanotti; Joaquin Vespignani; Rabindra Nepal |
| Abstract: | The recent environmental challenges in Africa emanated from global warming, human activity, limited access to electricity, and over exploitation of natural resources, have contributed to the growth of carbon dioxide (CO2) emissions in the region. This paper empirically investigates the moderating role of green energy consumption and energy innovation in the environmental Kuznets’ curve for the Sub-Saharan African (SSA) region using data spanning from 1980 to 2018. Our threshold model found that at least 54 per cent of population need access to energy innovation before the region could be safe from environmental degradation. We conclude that investment in green energy, energy innovation, and conservation of natural resources will help to mitigate environmental degradation in SSA in the long run. Policies should be targeted towards encouraging the consumption of green energy, and more investment in energy innovation beyond the estimated threshold will save the region from pollution and its implications. |
| Keywords: | Environmental Kuznets Curve, Green energy, Energy innovation, CO2 emission, SSA countries, and Quantile-Quantile regression |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2020-39&r=all |
| By: | Hung Do; Rabindra Nepal; Tooraj Jamasb |
| Abstract: | This study investigates the volatility connectedness between the Irish and Great Britain electricity markets and how it is driven by changes in energy policy, institutional structures and political ideologies. We assess various aspects of this volatility connectedness including static (unconditional) vs dynamic (conditional), symmetric vs asymmetric characteristics between 2009 and 2018. We find that volatility connectedness is time varying and is significantly affected by important events, policy reforms or market re-designs such as Brexit, oil price slump, increasing share of renewables, and fluctuations in the exchange rates. Our asymmetric analysis shows that the magnitude of the good volatility connectedness is marginally larger than that of the bad volatility connectedness. Our result suggests that good volatility levels would be even higher once the Irish market adopts the carbon price floor. Therefore, supporting renewable generation by setting an appropriate carbon price in interconnected wholesale electricity markets will improve market integration. |
| Keywords: | Market integration, electricity, renewable, energy policy, volatility |
| JEL: | D4 L94 Q2 Q4 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2020-42&r=all |
| By: | Gunnar Luderer (PIK - Potsdam Institute for Climate Impact Research); Michaja Pehl; Anders Arvesen; Thomas Gibon (LIST - Luxembourg Institute of Science and Technology); Benjamin Bodirsky (PIK - Potsdam Institute for Climate Impact Research); Harmen Sytze de Boer (PBL Netherlands Environmental Assessment Agency); Oliver Fricko; Mohamad Hejazi; Florian Humpenöder (PIK - Potsdam Institute for Climate Impact Research); Gokul Iyer; Silvana Mima (GAEL - Laboratoire d'Economie Appliquée de Grenoble - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - INRA - Institut National de la Recherche Agronomique); Ioanna Mouratiadou (Scottish Agricultural College - University of Edinburgh); Robert Pietzcker (PIK - Potsdam Institute for Climate Impact Research); Alexander Popp (PIK - Potsdam Institute for Climate Impact Research); Maarten van den Berg; Detlef van Vuuren (Utrecht University [Utrecht]); Edgar Hertwich |
| Abstract: | A rapid and deep decarbonization of power supply worldwide is required to limit global warming to well below 2?°C. Beyond greenhouse gas emissions, the power sector is also responsible for numerous other environmental impacts. Here we combine scenarios from integrated assessment models with a forward-looking life-cycle assessment to explore how alternative technology choices in power sector decarbonization pathways compare in terms of non-climate environmental impacts at the system level. While all decarbonization pathways yield major environmental co-benefits, we find that the scale of co-benefits as well as profiles of adverse side-effects depend strongly on technology choice. Mitigation scenarios focusing on wind and solar power are more effective in reducing human health impacts compared to those with low renewable energy, while inducing a more pronounced shift away from fossil and toward mineral resource depletion. Conversely, non-climate ecosystem damages are highly uncertain but tend to increase, chiefly due to land requirements for bioenergy. |
| Keywords: | life-cycle assessment,climate-change mitigation,land-use,integrated assessment,water demand,transformation pathways,electricity-generation,severe accidents,air-pollution,impact assessment |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02380468&r=all |
| By: | Claire Alestra; Gilbert Cette; Valérie Chouard; Rémy Lecat |
| Abstract: | This paper provides a tool to build climate change scenarios to forecast Gross Domestic Product (GDP), modelling both GDP damage due to climate change and the GDP impact of mitigating measures. It adopts a supply-side, long-term view, with 2060 and 2100 horizons. It is a global projection tool (30 countries / regions), with assumptions and results both at the world and the country / regional level. Five different types of energy inputs are taken into account according to their CO2 emission factors. Full calibration is possible at each stage, with estimated or literature-based default parameters. In particular, Total Factor Productivity (TFP), which is a major source of uncertainty on future growth and hence on CO2 emissions, is endogenously determined, with a rich modeling encompassing energy prices, investment prices, education, structural reforms and decreasing return to the employment rate. We present four scenarios: Business As Usual (BAU), with stable energy prices relative to GDP price; Decrease of Renewable Energy relative Price (DREP), with the relative price of non CO2 emitting electricity decreasing by 2% a year; Low Carbon Tax (LCT) scenario with CO2 emitting energy relative prices increasing by 1% per year; High Carbon Tax (HCT) scenario with CO2 emitting energy relative prices increasing by 3% per year. At the 2100 horizon, global GDP incurs a loss of 12% in the BAU, 10% in the DREP, 8% in the Low Carbon Tax scenario and 7% in the High Carbon Tax scenario. This scenario exercise illustrates both the “tragedy of the horizon”, as gains from avoided climate change damage net of damage from mitigating policies are negative in the mediumterm and positive in the long-term, and the “tragedy of the commons”, as climate change damage is widely dispersed and particularly severe in developing economies, while mitigating policies should be implemented in all countries, especially in advanced countries modestly affected by climate change but with large CO2 emission contributions. |
| Keywords: | Climate, Global warming, Energy prices, Government policy, Growth, Productivity, Long-term projections. |
| JEL: | H23 Q54 E23 E37 O11 O47 O57 Q43 Q48 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:banfra:759&r=all |
| By: | Murshed, Muntasir; Tanha, Muntaha Masud |
| Abstract: | This paper makes a novel attempt to model the non-linear association between renewable energy consumption and crude oil prices across four net oil-importing South Asian economies namely Bangladesh, India, Pakistan and Sri Lanka. Using annual data from 1990 to 2018, the results from the panel data regression analyses confirm the non-linear nexus and show that although rising crude oil prices do not facilitate renewable energy consumption initially, in the latter phases higher crude oil prices are associated with higher levels of renewable energy consumption. The similar non-linearity is also confirmed in the context of the renewable energy share in total final energy consumption and crude oil prices. Moreover, the nexus between renewable electricity share in aggregate electricity output and crude oil prices is also found to be non-linear in nature. However, rising crude oil prices were not found to enhance the share of renewable electricity. The causality results, overall, implicates that movements crude oil prices do influence the renewable energy transition within the concerned South Asian economies. Thus, these results impose critically important policy implications with respect to attainment of energy security and environmental sustainability across South Asia, particularly via reducing the imported crude oil-dependencies of these nations. |
| Keywords: | renewable energy; crude oil price; renewable energy transition; South Asia; cross-sectional dependency; net oil-importing economies |
| JEL: | P28 Q4 Q42 Q43 Q47 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:100162&r=all |
| By: | Vera Alexandropoulou; Phoebe Koundouri; Lydia Papadaki; Klimanthia Kontaxaki |
| Abstract: | Environmental challenges related to ports are twofold, namely the effects of maritime transport on the environment (e.g. pollution, CO2 emissions) and conversely the environmental impact on maritime transport e.g. Climatic Variability and Change. This chapter presents an overview of main challenges faced today, to engage port proactively take the responsibility of providing reward schemes or green certificates to complied ships, and to identify key indicators in measuring GHG emissions. European Union has put into force a number of Directives and Regulations aiming to incentivise port and shipping companies to commit to comply with environmental standards. The IMO 2020 regulation, bringing the sulphur cap in fuel oil for ships down from 3.50 per cent to 0.50 per cent, is expected to bring significant benefits for human health and the environment, while the European Green Deal, the most ambitious action plan of European Union, aims at increasing the EU�s greenhouse gas emission reductions target for 2030 to at least 50% compared with 1990 levels, creating the most ambitious package of measures, accompanied by an initial roadmap of key policies in cutting-edge research and innovation, in green technologies and sustainable solutions. Among them, Deep Demonstrations by EIT Climate-KIC using systems innovation approach aim at the decarbonisation of the European ports and the sustainable transformation of their key elements. |
| Keywords: | Sustainable ports, European Green Deal, Maritime transport, ports regulation, Deep Demonstration, Environmental policy |
| Date: | 2020–05–30 |
| URL: | http://d.repec.org/n?u=RePEc:aue:wpaper:2026&r=all |
| By: | Yang, Jue; Chen, Fei |
| Abstract: | This study examines the impacts of psychological factors on Chinese consumers’preferences of PEV features as well as PEV uptake intension in cities with and without license number plate restrictions. Psychological factors are relatively less investigated factors in the domestic literature, but consumers may not behave rational as researchers expected when facing such a complex choice problem. This study generates three latent psychological factors, namely knowledge of policy and PEVs, social influence, and environmental ttitudes/innovativeness, and integrates them with object-case best-worst scaling model through a hybrid choice model. Evidences show that knowledge and environmental attitudes are weaker compare to social influence and innovativeness, but these factors affect consumers’ preferences differently both at individual level and city level. To facilitate market-oriented PEV uptake, especially in areas without restrictions, improve reputation through interpersonal communication on technical features are expected. While in large cities with restrictions, through neighborhood effects and innovativeness, emphasizing air pollution and CO2 emission reduction features could be more efficient. |
| Keywords: | Plug-in Electric Vehicle, China, social influence, willingness to pay |
| JEL: | Q5 |
| Date: | 2020–05–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:96165&r=all |
| By: | Janda Karel; Binyi Zhang |
| Abstract: | Understanding the influencing factors of carbon dioxide emissions is an essential prerequisite for pol- icy makers to maintain sustainable low-carbon economic growth. Based on the Autoregressive Distributed Lag Model (ARDL) and Vector Error Correction Model (VECM), we investigate the relationships among economic growth, carbon emission, financial development, renewable energy consumption and technology innovation for China for the period 1965-2018. Our empirical results confirm the presence of a long run relationship among the underlying variables. Our long run estimates show that financial development has negatively significant impacts on carbon emissions, whereas renewable energy and technology innovation have limited impacts on carbon mitigations. In addition, the short run Granger causality analysis reveals that renewable energy consumption has a bidirectional Granger causality with carbon emissions and technology innovations. In the short run, we find that financial development can positively effect China’s carbon mitigation indirectly, via the channels of renewable energy sources and technology innovations. Our results have a number of public policy implications for Chinese policy makers to maintain sustainable low carbon economic development: (i) establish a green finance market to mobilize the social capital into green industry; (ii) continue the environmental law enforcement to control for carbon emissions among energy-intensive industries; (iii) provide government fiscal incentives to promote renewable energy sources on both supply and demand sides of the market. |
| Keywords: | Financial development, Carbon emissions, ARDL, China |
| JEL: | K32 O13 P28 |
| Date: | 2020–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:prg:jnlwps:v:2:y:2020:id:2.003&r=all |
| By: | Ghislaine Lang; Mehdi Farsi; Bruno Lanz; Sylvain Weber |
| Abstract: | We elicit homeowners' marginal willingness to pay (MWTP) for energy efficiency and low-carbon technologies in the context of replacement heating appliances. We exploit a novel within-between subject design that involves manipulating information in a two-stage discrete choice experiment (DCE) and using WTP space estimation to identify the role of financial information in reducing fossil fuel use. We find that homeowners' average valuation of energy efficiency exceeds associated heating cost savings, suggesting that they also consider non-monetary benefits when evaluating this type of investment. By contrast, we identify large heterogeneity in preferences for different heating technologies (i.e., oil, gas, wood, heat pump), and that on average, oil users' MWTP for switching to low-carbon technologies does not cover respective investment cost differentials. Finally, our difference-in-difference results show that the provision of information about private and pro-social benefits of investments fails to increase MWTP for energy efficient and low-carbon technologies. |
| Keywords: | Energy efficiency; Low-carbon technologies; Informational interventions; Product familiarity; Discrete choice experiments; WTP space estimation. |
| JEL: | D1 D8 H23 Q4 Q5 R31 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:irn:wpaper:20-07&r=all |
| By: | Ambrose, Hanjiro |
| Abstract: | Battery electric vehicles (BEVs) have been proposed as a pathway for reducing the environmental impacts of transportation systems. While BEVs are often referred to as zero-emission vehicles, production and operation consume resources and emit pollutants through the vehicle supply chain and generation of electricity for vehicle charging. Life cycle assessment is a standardized methodology for assessing the environmental impacts of product systems from a system-wide perspective; considering the total supply chain and the product life cycle from cradle-to-grave. However, conventional LCAs are often limited; based off static supply chain analysis, omitting system interactions or indirect effects, and insufficiently reflecting the underlying variability and uncertainty to support robust public policy decisions. The objective of this dissertation is to develop and refine methods of assessing the life cycle environmental impacts and economic costs of electric vehicle technologies and policies. The chapters of this dissertation make contributions in advancing spatial and temporal dynamics in LCA modelling, integrating vehicle operations with evolutions in technology, background systems, and product development, and offers novel estimates of the costs and emissions abatement potential of light and heavy duty electric vehicles. As shown herein, a systems perspective is required to estimate the environmental benefits and costs of vehicle electrification strategies. Efforts to achieve pollution abatement through technology change must address risks of leakage, substitution, and unintended environmental consequences. |
| Keywords: | Engineering, critical materials, electric vehicles, heavy duty vehicles, life cycle assessment, lithium batteries, system modelling |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsdav:qt3bx6f16d&r=all |
| By: | Kheiravar, Khaled H |
| Abstract: | The decisions made by petroleum producers in the world oil market are both dynamic and strategic, and are thus best modeled as a dynamic game. In the first chapter of my dissertation, I review the literature on the world oil market and discuss my research on econometric modeling of the world oil market as a dynamic game. My research on econometric modeling of the world oil market as a dynamic game research builds on the previous literature by combining three erstwhile separate dimensions of modeling the world oil market: dynamic optimization, game theory, and econometrics. In the second chapter of my dissertation, I develop and estimate a structural econometric model of the dynamic game among petroleum-producing firms in the world petroleum market. My model incorporates the dynamic behavior and strategic interactions that arise as petroleum-producing firms make their investment, production, merger, and acquisition decisions. I allow firms that are at least partially state-owned to have objectives other than profit maximization alone. I use the structural econometric model to analyze the effects of changes in OPEC membership, a ban on mergers, the privatization of state-owned oil companies, and demand shocks on the petroleum industry. Although I do not assume or impose that OPEC producers collude to maximize joint profits, but instead infer the strategy and payoffs for OPEC firms from the data, I find that OPEC behaves in such a way that is consistent with its mission and also with cartel behavior. Results of counterfactual simulations also show that a ban on mergers would decrease average firm payoff for both OPEC and non-OPEC firms, and decrease consumer surplus. Gasoline taxes have been touted by many economists as an efficient and relatively simple tool to address environmental concerns and other problems associated with gasoline consumption. Nevertheless, rather than removing subsidies and increasing gasoline taxes, many countries still subsidize gasoline, which may have the opposite effect of exacerbating air pollution and other problems associated with gasoline consumption. The Iranian government has heavily subsidized petroleum products since the early 1980s. As a result of these energy subsidies and artificially low national energy price, Iran is one of the most energy-intensive countries in the world. The Iranian government has recently taken a series of measures to reform and cut back on the energy subsidies. In the third chapter of my dissertation, I evaluate the effects of the Iranian subsidy reform on air quality using a regression discontinuity design. My results provide evidence across multiple different empirical specifications that the subsidy reform in Iran led to improvements in air quality. In particular, the first subsidy reform event, which increased gasoline prices and implemented a gasoline consumption quota; and the second subsidy reform event, which increased energy prices and decreased energy subsidies, both led to declines in concentrations of CO, O3, and NO2. In contrast, the fourth subsidy reform event, which increased fuel prices but removed the gasoline consumption quota, was less effective in reducing air pollution. |
| Keywords: | Business, Petroleum producers, Petroleum-producing firms, Dynamic behavior, Strategic interactions, World oil market, Gasoline taxes |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsdav:qt3gj151w9&r=all |
| By: | Laurence J. Kotlikoff (Boston University and NBER); Felix Kubler (University of Zurich and Swiss Financial Institute); Andrey Polbin (The Russian Presidential Academy of National Economy and Public Administration, and The Gaidar Institute for Economic Policy); Jeffrey D. Sachs (Columbia University and NBER); Simon Scheidegger (University of Lausanne Department of Finance) |
| Abstract: | Carbon taxation has been studied primarily in social planner or infinitely lived agent models, which trade off the welfare of future and current generations. Such frameworks obscure the potential for carbon taxation to produce a generational win-win. This paper develops a large-scale, dynamic 55-period, OLG model to calculate the carbon tax policy delivering the highest uniform welfare gain to all generations. The OLG framework, with its selfish generations, seems far more natural for studying climate damage. Our model features coal, oil, and gas, each extracted subject to increasing costs, a clean energy sector, technical and demographic change, and Nordhaus (2017)'s temperature/damage functions. Our model's optimal uniform welfare increasing (UWI) carbon tax starts at $30 tax, rises annually at 1.5 percent and raises the welfare of all current and future generations by 0.73 percent on a consumption-equivalent basis. Sharing efficiency gains evenly requires, however, taxing future generations by as much as 8.1 percent and subsidizing early genrations by as much as 1.2 percent of lifetime consumption. Without such redistribution (the Nordhaus “optimum†), the carbon tax constitutes a win-lose policy with current generations experiencing an up to 0.84 percent welfare loss and future generations experiencing an up to 7.54 percent welfare gain. With a six-times larger damage function, the optimal UWI initial carbon tax is $70, again rising annually at 1.5 percent. This policy raises all generations’ welfare by almost 5 percent. However, doing so requires levying taxes on and giving transfers to future and current generations ranging up to 50.1 percent and 10.3 percent of their lifetime consumption. Delaying carbon policy, for 20 years, reduces efficiency gains roughly in half. |
| JEL: | F0 F20 H0 H2 H3 J20 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:bos:wpaper:wp2020-002&r=all |
| By: | Huisman, Ronald; Kyritsis, Evangelos; Stet, Cristian |
| Abstract: | The large-scale integration of renewable energy sources requires flexibility from power markets in the sense that the latter should quickly counterbalance the renewable supply variation driven by weather conditions. Most power markets cannot (yet) provide this flexibility effectively as they suffer from inelastic demand and insufficient flexible storage capacity. Research accordingly shows that the volume of renewable energy in the supply system affects the mean and volatility of power prices. We extend this view and show that the level of wind and solar energy supply affects the tails of the electricity price distributions as well, and that it does so asymmetrically. The higher the supply from wind and solar energy sources, the fatter the left tail of the price distribution and the thinner the right tail. This implies that one cannot rely on symmetric price distributions for risk management and for valuation of (flexible) power assets. The evidence in this paper suggests that we have to rethink the methods of subsidizing variable renewable supply such that they take also into consideration the flexibility needs of power markets. |
| Keywords: | intermittent renewable supply, flexibility, power prices, fat tails, asymmetric probability distribution, Environment, energy and climate policy, C10, Q41, Q42, |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:fer:wpaper:134&r=all |
| By: | OECD |
| Abstract: | Environmental fiscal reforms are an essential building block to steer countries onto a sustainable long-term development path. This paper develops proposals for strengthening the role of market-based environmental policy instruments in the Slovak Republic. The paper discusses reform options aimed at mitigating air pollution and climate change, improved waste management and biodiversity conservation. This includes measures such as introduction of automatic indexation of environmentally related taxes, differentiation of energy tax rates by emission intensity of fuels, broadening tax bases to include all emission sources and reforming preferential fiscal treatment of household fuel use – a major source of local air pollution. In the waste management domain, raising the landfill tax to better reflect external environmental costs of particular tax bases would help encourage diversion of waste from landfills. A complementary waste incineration tax would help incentivise waste prevention, composting and material recycling. |
| Date: | 2020–06–22 |
| URL: | http://d.repec.org/n?u=RePEc:oec:envaac:19-en&r=all |
| By: | Ferguson-Cradler, Gregory |
| Abstract: | Electricity is a key area in climate mitigation. The sector needs to significantly expand while transitioning to renewable production, all in an extremely short timeframe. This paper focuses on ownership and control in the electricity sector in an era of climate change. Borrowing substantially from classical American Institutionalism, heterodox theories and histories of the firm, and legal institutionalism, this paper discusses the historically constituted nature of the categories of property, capital, and the firm and how these literatures provide helpful frameworks for analyzing the recent history and possible futures of electricity sectors. A short discussion of the recent history of the German electricity sector, particularly the large utility RWE, will briefly illustrate the approach. Demands of warming mitigation will require revised notions of ownership and an updated theory of the firm, property, and corporate governance for the Anthropocene. |
| Keywords: | Anthropocene,electricity,energy transitions,property theory of the firm,Anthropozän,Elektrizität,Energiewenden,Unternehmenstheorie |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:mpifgd:205&r=all |
| By: | Ashish Kumar Sedai; Rabindra Nepal; Tooraj Jamasb |
| Abstract: | Access to reliable energy is central to improvements in living standards and is a recognized Sustainable Development Goal. This study moves beyond counting the electrified households and examines the effect of the hours of electricity households receives on their welfare. We hypothesize that additional hours of electricity have different effects on the poor, the middle income and the rich, in rural and urban areas. The methods used are panel fixed effects instrumental variables, cross sectional fixed effects instrumental variables, and logistic regression with data from the Indian Human Development Survey 2005-2012. We focus on extensive and the intensity margins, i.e. how access and additional hours of electricity affect household welfare in terms of consumption expenditure, income, assets and poverty status. The results show large gaps between benefits and costs of electricity supply among consumer groups. We also find that electricity theft is positively correlated with the net returns from electrification. A progressive pricing mechanism with targeted subsidies for the poor could therefore increase household welfare while reducing the financial losses of the State Electricity Boards. |
| Keywords: | Reliable Energy, Electrification, Household Welfare, Panel Fixed Effects, Instrumental Variables Approach |
| JEL: | D12 D31 E2 I32 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2020-41&r=all |
| By: | Shahbaz, Muhammad; Shafiullah, Muhammad; Khalid, Usman; Song, Malin |
| Abstract: | Energy resources are an important material foundation for the survival and development of human society, and the relationship between energy and economy is interactive and complementary. This paper analyzes the energy consumption–economic growth nexus in Chinese provinces using novel and recent nonparametric time-series as well as panel data empirical approaches. The dataset covers 30 provinces over the period of 1980-2018. The empirical analysis indicates the presence of a nonlinear functional form and smooth structural changes in most of the provinces. The nonparametric empirical analysis validates the presence of a nonlinear unit root problem in energy consumption and economic growth, and nonlinear cointegration between the variables. Additionally, the nonparametric panel cointegration test reports evidence of convergence in energy consumption and economic growth patterns across the provinces. The nonparametric regression analysis finds economic growth to have a positive effect, on average, on energy consumption in all provinces, except for Beijing. Further, the energy environmental Kuznets curve exists between economic growth and energy consumption in 20 out of 30 Chinese provinces. The Granger causality analysis reveals the presence of a mixed causal relationship between economic growth and energy consumption. The empirical findings have important implications for Chinese authorities in planning for improving energy efficiency, decoupling between economic growth and energy consumption, and reducing the environmental footprint of provinces. |
| Keywords: | Energy Consumption, Economic Growth, China, Nonparametric Analysis |
| JEL: | Q4 |
| Date: | 2020–05–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:100769&r=all |
| By: | K M, SIBY |
| Abstract: | A day without electricity is unimaginable for the populace of today. Electricity is the driving force of the thriving economic activities around us. The deficiency of electrical energy can open a Pandora’s box of troubles for Kerala which is already lagging behind in industrial development in the country. The present study makes use of both cross sectional and time series data to analyse the generation and consumption of electricity in Kerala by calculating the compound annual growth rates and instability indices of various significant variables in electrical energy sector. The study also analyses the residential electricity consumption pattern of Kalamassery municipality by using Ordinary Least Square (OLS) estimation. |
| Keywords: | electrical energy, growth, instability, consumption pattern |
| JEL: | Q41 |
| Date: | 2020–05–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:100532&r=all |
| By: | Shen Gao; Chenghan Hou; Bao H. Nguyen |
| Abstract: | The growing disintegration between the natural gas and oil prices, together with shale revolution and market financialization, lead to continued fundamental changes in the natural gas markets. To capture these structural changes, this paper considers a wide set of highly flexible time-varying parameter models to evaluate the out-of-sample forecasting performance of the natural gas spot prices across the US, European and Japanese markets. The results show that for both Japan and EU markets, the best forecasting performance is found when the model allows for drastic changes in the conditional mean and gradual changes in the conditional volatility. For the US market, however, no model performs systematically better than the simple autoregressive model. Full sample estimation results further confirm that allowing t-distributed error is important in modelling the natural gas prices, especially for EU markets. |
| Keywords: | Natural gas price, Structural breaks, Forecasting, Time-varying parameter, Markov switching, Stochastic volatility |
| JEL: | C32 E32 Q43 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2020-30&r=all |
| By: | Timothy J. Garrett; Matheus R. Grasselli; Stephen Keen |
| Abstract: | Climate change has become intertwined with the global economy. Here, we describe the importance of inertia to continued growth in energy consumption. Drawing from thermodynamic arguments, and using 38 years of available statistics between 1980 to 2017, we find a persistent time-independent scaling between the historical time integral $W$ of world inflation-adjusted economic production $Y$, or $W\left(t\right) = \int_0^t Y\left(t'\right)dt'$, and current rates of world primary energy consumption $\mathcal E$, such that $\lambda = \mathcal{E}/W = 5.9\pm0.1$ Gigawatts per trillion 2010 US dollars. This empirical result implies that population expansion is a symptom rather than a cause of the current exponential rise in $\mathcal E$ and carbon dioxide emissions $C$, and that it is past innovation of economic production efficiency $Y/\mathcal{E}$ that has been the primary driver of growth, at predicted rates that agree well with data. Options for stabilizing $C$ are then limited to rapid decarbonization of $\mathcal E$ through sustained implementation of over one Gigawatt of renewable or nuclear power capacity per day. Alternatively, assuming continued reliance on fossil fuels, civilization could shift to a steady-state economy that devotes economic production exclusively to maintenance rather than expansion. If this were instituted immediately, continual energy consumption would still be required, so atmospheric carbon dioxide concentrations would not balance natural sinks until concentrations exceeded 500 ppmv, and double pre-industrial levels if the steady-state was attained by 2030. |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2006.03718&r=all |
| By: | Milan Straka; Rui Carvalho; Gijs van der Poel; \v{L}ubo\v{s} Buzna |
| Abstract: | Here, we develop a data-centric approach enabling to analyse which activities, function, and characteristics of the environment surrounding the slow charging infrastructure impact the distribution of the electricity consumed at slow charging infrastructure. To gain a basic insight, we analysed the probabilistic distribution of energy consumption and its relation to indicators characterizing charging events. We collected geospatial datasets and utilizing statistical methods for data pre-processing, we prepared features modelling the spatial context in which the charging infrastructure operates. To enhance the statistical reliability of results, we applied the bootstrap method together with the Lasso method that combines regression with variable selection ability. We evaluate the statistical distributions of the selected regression coefficients. We identified the most influential features correlated with energy consumption, indicating that the spatial context of the charging infrastructure affects its utilization pattern. Many of these features are related to the economic prosperity of residents. Application of the methodology to a specific class of charging infrastructure enables the differentiation of selected features, e.g. by the used rollout strategy. Overall, the paper demonstrates the application of statistical methodologies to energy data and provides insights on factors potentially shaping the energy consumption that could be utilized when developing models to inform charging infrastructure deployment and planning of power grids. |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2006.01672&r=all |
| By: | Lutz Kilian; Nikos Nomikos; Xiaoqing Zhou |
| Abstract: | Using a novel dataset, we develop a structural model of the Very Large Crude Carrier (VLCC) market between the Arabian Gulf and the Far East. We study how fluctuations in oil tanker rates, oil exports, shipowner profits, and bunker fuel prices are determined by shocks to the supply and demand for oil tankers, to the utilization of tankers, and to bunker fuel costs. Our analysis shows that time charter rates respond only slightly to fuel cost shocks. In response to higher fuel costs, voyage profits decline, as cost shocks are only partially passed on to round-trip voyage rates. Oil exports from the Arabian Gulf also decline, reflecting lower demand for VLCCs. Positive utilization shocks are associated with higher profits, a slight increase in time charter rates and slightly lower fuel prices and oil export volumes. Tanker supply and tanker demand shocks have persistent effects on time charter rates, round-trip voyage rates, the volume of oil exports, fuel prices, and profits with the expected sign. |
| Keywords: | Shipping; VLCC; crude oil; bunker fuel; tanker; voyage; time charter; profits; exports; passthrough |
| JEL: | Q43 R41 |
| Date: | 2020–05–21 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddwp:88042&r=all |
| By: | Gazi M Hassan |
| Abstract: | Using a natural experiment of a rainfall-driven remittances, I provide experimental measures of how remittances affect rural household’s choice of cylinder gas (LPG) as a cooking fuel over other alternative fuels in southern Bangladesh. Household choice of LPG and remittances are jointly related; therefore, I use the instrumental variable probit (IV-Probit) approach. The treatment of remittances is randomly assigned to households who suffered losses due to a natural shock from the cyclone-Roanu enabling the instrument – exogenous variation in rainfall interacted with cyclone-affected migrant household’s distance to the local weather stations – to identify the average treatment effect for the treatment group (cyclone-affected remittances recipient households). I find that an exogenous increase in remittances by 1,000 Taka causes the probability of using LPG to rise by 1%. In terms of percentage change, the implied elasticity shows that a 10% increase in remittances income can raise the probability of using LPG by 2%. I also find the impact of remittances is conditional on household’s health expenditures. In particular, controlling for the household’s health expenditures interacted with the provision for clean water and sanitary toilet in the dwelling, the marginal effects of remittances get stronger, i.e. households are more likely to use LPG as cooking fuel. These findings counter some existing case studies and views of many policy makers that economic factors are less significant in promoting cleaner energy for the household. The results of the paper are robust to potential violations of the exclusion restriction, to alternative specifications and instruments, and possible omitted variable bias. |
| Keywords: | Remittances, clean energy, energy-poverty, IV-Probit, cyclone-Roanu, Bangladesh |
| JEL: | F24 Q40 R20 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2020-33&r=all |
| By: | Konstantinos Gkillas (Department of Business Administration, University of Patras, University Campus, Rio, P.O. Box 1391, 26500 Patras, Greece); Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, 0002, South Africa); Christian Pierdzioch (Department of Economics, Helmut Schmidt University, Holstenhofweg 85, P.O.B. 700822, 22008 Hamburg, Germany); Seong-Min Yoon (Department of Economics, Pusan National University, 2, Busandaehak-ro 63beon-gil, Geumjeong-gu, Busan, 46241, Republic of Korea) |
| Abstract: | We study the role of OPEC meeting dates and production announcements for predicting jumps in the oil market. The period of analysis spans from the daily period of 2nd December 1997 to 26th May 2017, with the start and end date corresponding to our availability of the intraday data on oil-price data. We, first, apply the standard linear Granger causality test to detect evidence of the OPEC-based predictors in causing jumps. This test fails to detect predictability from OPEC-based predictors to oil market jumps. Yet given the strong evidence of nonlinearity between jumps and the dummies capturing news regarding the OPEC production announcements and meeting dates, we next use a nonparametric causality-in-quantiles test. Upon employing this data-driven robust approach, we find strong evidence that the variables do predict oil market jumps, ranging from the lower end of the conditional distribution of jumps to around the median. |
| Keywords: | Oil market jumps, OPEC announcements, Nonparametric quantile causality |
| JEL: | C22 Q02 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:202053&r=all |
| By: | Chepeliev, Maksym |
| Abstract: | The purpose of this note is to document data sources and steps used to develop the air pollution database for the GTAP Data Base Version 10A. Emissions for nine substances are reported in the database: black carbon (BC), carbon monoxide (CO), ammonia (NH3), non-methane volatile organic compounds (NMVOC), nitrogen oxides (NOx), organic carbon (OC), particulate matter 10 (PM10), particulate matter 2.5 (PM2.5) and sulfur dioxide (SO2). The dataset covers four reference years – 2004, 2007, 2011 and 2014. EDGAR Version 5.0 database is used as the main data source. To assist with emissions redistribution across consumption-based sources, IIASA GAINS-based model and IPCC-derived emission factors are applied. Each emission flow is associated with one of the four sets of emission drivers: output by industries, endowment by industries, input use by industries and household consumption. In addition, emissions from land use activities (biomass burning) are estimated by land cover types. These emissions are reported separately without association with emission drivers. |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:gta:resmem:6163&r=all |
| By: | Irma Alonso Álvarez (Banco de España); Virginia Di Nino (European Central Bank); Fabrizio Venditti (European Central Bank) |
| Abstract: | In a simplied 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. |
| Keywords: | OPEC, shale, oil, VAR |
| JEL: | Q41 Q43 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:2006&r=all |
| By: | Strand,Jon |
| Abstract: | This paper uses simple analytical models to study high-income donor countries'willingness to pay to supply mitigation finance to low-income countries; how this depends on modality for finance supply; and how it changes as the global greenhouse gas mitigation agenda moves forward. The paper focuses on two modalities: transformational project-based mitigation finance (transitioning from fossil to non-fossil energy use at scale), and transformational policy-based mitigation finance support (implementing comprehensive carbon taxation). These modalities are compared with conventional finance for which donors have lower willingness to pay. High-income countries'willingness to pay is higher when mitigation is combined with carbon taxation; private-sector finance is also more highly incentivized. Reaching the transformational mitigation finance stage can be challenging, as it may require large provision of mitigation finance with negative net returns to high-income countries. Willingness to pay will be higher when high-income countries collaborate in the provision of mitigation finance. The findings show that more effective collaboration can be sustained when it is enforced by an international financial institution that collects and spends the provided mitigation finance to induce efficient mitigation activity in low-income countries and collaboration among donors is enforced by simple tit-for-tat reaction strategies. |
| Keywords: | Climate Change Mitigation and Green House Gases,Energy Demand,Energy and Mining,Energy and Environment,Global Environment,Science of Climate Change,Climate Change and Health,Climate Change and Environment,Climate Change Economics |
| Date: | 2020–05–18 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9251&r=all |
| By: | De Soysa, Indra; Krieger, Tim; Meierrieks, Daniel |
| Abstract: | We empirically examine the impact of oil wealth on property rights protection for a sample of 156 countries between 1960 and 2014. We find that higher levels of oil wealth result in weaker private property rights. This result is robust to different instrumental-variable approaches and operationalizations of oil wealth and economic institutions. We argue that oil wealth creates an oil elite that wields disproportionate economic and political power over society. The elite uses this power to buy support for weak property rights from their supporters (the selectorate), while also punishing the opposition (i.e., the non-selectorate). Indeed, we also provide evidence that oil wealth leads to more clientelistic policies (benefitting the selectorate) but also more punitive measures (e.g., in the form of exclusion from state jobs) likely administered to the non-selectorate. We argue that the elite favors weak property rights because this blocks potential economic challengers, allowing for the consolidation and perpetuation of the economic and political status quo. |
| Keywords: | oil wealth,economic institutions,property rights,resource curse,selectorate theory |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wgspdp:202003&r=all |
| By: | Ajayi, Patricia; Ogunrinola, Adedeji |
| Abstract: | This study provides empirical insight into the relationship between growth, trade openness, and environmental degradation in Nigeria. The autoregressive distributed lag bounds testing approach was applied on time series data from 1960-2017. Employing the Pollution Haven and Environmental Kuznets Curve hypotheses, empirical findings validate the EKC hypothesis in Nigeria in the long-run. All estimated parameters were found to have the expected signs in the short- and long-run, except population, with the expected sign only in the long-run. The analysis proves that trade openness and population aid environmental degradation in the short-run. It reveals that financial development counters environmental degradation in both the short- and long-run, and real income per capita has a positive and significant effect on environmental degradation in both the short- and long-run. The coefficient of the error correction term suggests that 62.5% of the divergence between actual and equilibrium CO2 emissions is corrected annually. Post-estimation tests employed proves the robustness of the result. The RESET test affirmed the specification of the model and the CUSUM and CUSUM of squares tests confirm the stability of the parameters. Consequently, Nigeria should foster policies that encourage the development and utilization of renewable energy to boost economic development. |
| Keywords: | Growth; trade openness; environmental degradation, pollution haven hypothesis, environmental Kuznets curve, sustainable development |
| JEL: | F1 F18 O4 O44 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:100713&r=all |
| By: | Arlan Brucal (Grantham Research Institute on Climate Change and the Environment, London School of Economics and Political Science); Nori Tarui (Department of Economics, University of Hawaii at Manoa and the University of Hawaii Economic Research Organization (UHERO)) |
| Abstract: | Revenue decoupling (RD) is a regulatory mechanism that allows adjustments of retail electricity rates so that the regulated utility recovers its required revenue despite fluctuations in its sales volume. The U.S. utility data in 2000-2012 reveals that RD is associated with more than 10% higher electricity prices in two years after RD is implemented relative to similar non-decoupled utilities---an impact significantly higher than previously thought. Theoretically, unexpected sales declines would lead to higher electricity prices while unexpected sales increases would lead to lower prices. RD adjustments have yielded both refunds and surcharges, but the data indicates that electricity prices demonstrate downward rigidity and statistically significant upward adjustments for the utilities subject to RD. Together with the likely negative impacts of RD on low-income(as opposed to high-income) households, this analysis indicates the limitations of decoupling, and fixed-cost recovery practice in general, which involves adjustments in volumetric electricity rates. |
| Keywords: | utility regulation; revenue decoupling; electricity sector |
| JEL: | L94 Q41 Q48 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:hai:wpaper:202011&r=all |
| By: | Aslan,Cigdem; Irwin,Tim |
| Abstract: | Ministries of finance are often asked to guarantee a state-owned electricity utility's payments to an independent power producer under a power-purchase agreement. To decide whether to grant the guarantee, the ministry should have at least a rough estimate of the guarantee's expected cost. Making use of an analogy between a power-purchase agreement and a debt contract, this paper shows how the ministry can get such an estimate by applying a method developed to estimate the expected cost of debt guarantees. An estimate of the probability of the utility's not being able to meet its obligations under the power-purchase agreement can be derived from the utility's actual or estimated credit rating in the absence of government support. The government's expected payments under the guarantee can then be estimated by multiplying the utility's payments under the power-purchase agreement by this probability. The estimates produced by the method will be imprecise, but the method may be easier to apply than alternative methods, and an imprecise estimate may be better for policy makers than no estimate. |
| Keywords: | Energy Demand,Energy and Mining,Energy and Environment,Energy Policies&Economics,Inflation,Hydrology,Private Sector Economics |
| Date: | 2020–06–05 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9271&r=all |
| By: | Wolfgang Habla (ZEW – Leibniz Centre for European Economic Research); Vera Huwe (ZEW – Leibniz Centre for European Economic Research); Martin Kesternich (University of Kassel) |
| Abstract: | We use car-level micro data to provide empirical evidence on the usage of conventional and electric vehicles (EVs) in private and car sharing fleets in Germany. We shed light on both monetary and non-monetary barriers to EV adoption and usage by exploiting the feature that variable costs are identical for shared vehicles but different for private car owners across engine types. While drivers respond to monetary incentives when using conventional cars, this does not hold for EVs. We find that EVs are, on average, driven shorter distances than conventional vehicles, both in terms of annual and single-day mileage, even if costs are identical. We also document that car sharing intensifies the usage of conventional cars but not that of EVs. |
| Keywords: | Electric vehicles, internal combustion engine vehicles, barriers to adoption, cruising range, driving patterns, car sharing, range limitations, range anxiety |
| JEL: | R41 D12 Q50 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:202028&r=all |
| By: | Afees A. Salisu (Department for Management of Science and Technology Development, Ton Duc Thang University, Ho Chi Minh City, Vietnam; Faculty of Business Administration, Ton Duc Thang University, Ho Chi Minh City, Vietnam); Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, 0002, South Africa); Elie Bouri (USEK Business School, Holy Spirit University of Kaslik, Jounieh, Lebanon) |
| Abstract: | In this study, we offer two main innovations. First, we subject six alternative indicators of global economic activity, including the one recently developed by Baumeister et al. (2020), to empirical tests of their relative predictive powers for crude oil market volatility. Second, we accommodate all the relevant series at their available data frequencies using the GARCH-MIDAS approach, thereby circumventing information loss and any associated bias. We find evidence in support of the ability of global economic activity to predict energy market volatility. Our forecast evaluation of the various indicators places a higher weight on the newly developed indicator of global economic activity by Baumeister et al. (2020), based on a set of 16 variables covering multiple dimensions of the global economy, than other indicators. The results leading to these conclusions are robust to multiple forecast horizons and consistent across alternative energy sources. |
| Keywords: | Energy Markets Volatility, Global Economic Conditions, Mixed-Frequency |
| JEL: | C32 C53 E32 Q41 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:202051&r=all |
| By: | Beate Fischer (University of Kassel); Gunnar Gutsche (University of Kassel); Heike Wetzel (University of Kassel) |
| Abstract: | This paper analyzes the potential for citizen participation in renewable energy cooperatives and in the energy transition process. We consider representative survey data for more than 4,200 financial decision-makers in German households and analyze (i) differences between members and non-members of renewable energy cooperatives, (ii) non-members’ willingness to participate in energy cooperatives, and (iii) factors determining citizen participation in terms of not only voluntary involvement, but also private investments. We find that the lack of familiarity with energy cooperatives among non-members is a limiting factor for the expansion of citizen participation, a finding that indicates the potential of information campaigns. However, we also reveal a substantial participation potential, as about 40% of the non-members who are familiar with the term “energy cooperative†express a high willingness to become involved. Our econometric analysis based on bivariate binary probit models complements the current state of research by showing the relevance of economic preferences such as time preferences, trust, and negative reciprocity. Interestingly, psychological personality traits, measured by the Big Five, are found to be of minor importance. We additionally confirm the findings of earlier work with regard to the relevance of individual environmental values, social contextual factors, and social norms. |
| Keywords: | Citizen participation, community renewable energy, energy transition, Big Five personality traits, economic preferences, social norms |
| JEL: | G11 M14 Q01 Q49 Q56 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:202027&r=all |
| By: | Lucas Bretschger (Center of Economic Research (CER-ETH), ETH Zurich, Switzerland); Elise Grieg (Center of Economic Research (CER-ETH), ETH Zurich, Switzerland); Paul J.J. Welfens (EIIW/University of Wuppertal); Tian Xiong (EIIW/University of Wuppertal) |
| Abstract: | This paper presents empirical results on coronavirus fatality rates from cross-country regressions for OECD countries. We include medical, environmental and policy variables in our analysis to explain the death rates when holding case rates constant. We find that the share of the aged population, obesity rates, and local air pollution levels have a positive effect on fatality rates across the different estimation equations. The strategy of aiming to achieve herd immunity has a significant positive effect on death rates. Other medical and policy variables discussed in the public sphere do not show a significant impact in our regressions. An evaluation of different health policy stringencies does not yield clear conclusions. Our results suggest that improving local air quality helps reduce the negative effects of a coronavirus pandemic significantly. |
| Keywords: | Coronavirus Pandemic, Fatality Rates, Local Air Pollution, OECD Countries, Health Systems, Environmental Policy |
| JEL: | I10 Q53 I18 H12 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:20-336&r=all |
| By: | Antoine Devulder; Noëmie Lisack |
| Abstract: | We analyse the propagation of carbon taxation through input-output production networks. To do so, we use a static multi-sector general equilibrium model including France, the rest of the European Union and the rest of the world to simulate the impact of carbon tax scenarios on economic activity. We find that a tax increase on sectors' and households' greenhouse gas emissions corresponding to a carbon price of 100 euros per ton of carbon dioxide equivalent entails a decrease in French aggregate real value added by 1.2% at a 5-to10-year horizon when implemented in France only, vs. 1.5% when implemented in the whole EU. Impacts on sectoral real value added range from -20% to negligible. The most affected sectors are generally the most polluting ones, but the tax also propagates across sectors via intermediate inputs. Specifically, the network structure tends to affect comparatively more upstream sectors than downstream ones, given their taxation levels. International financial markets also play an important role by neutralizing the positive response of final demand that would result from the redistribution of the tax proceeds to domestic households. |
| Keywords: | Carbon tax, multi-sector model, international production networks. |
| JEL: | D57 F11 H23 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:banfra:760&r=all |
| By: | Jamie L. Cross; Bao H. Nguyen; Trung Duc Tran |
| Abstract: | Contemporary structural models of the global market for crude oil treat storage demand as a composite of precautionary responses to uncertainty and speculative behavior, due to difficulties in jointly identifying these distinct demand components. This difficulty arises because the underlying expectation shifts are latent and operate through similar transmission mechanisms. In this paper, we extend the workhorse oil market model by jointly identifying these distinct demand components. Our main insight is that precautionary demand is the primary driver of the real price of crude oil, previously associate with storage demand shocks. Historically, precautionary demand shifts associated with adverse sociopolitical conditions in the Middle-East, can explain the oil price spikes during the 1979 oil crisis and the Wars of 1980 and 1990, while speculative demand was a more important driver during the disbandment of OPEC. Finally, we find that these newly identified shocks have distinct consequences for the U.S. economy: precautionary demand shocks reduce real GDP, while speculative demand shocks cause inflation. |
| Keywords: | Oil price uncertainty, Oil market, SVAR, Narrative sign restrictions |
| JEL: | C32 C52 Q41 Q43 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2020-34&r=all |
| By: | Andreas Papandreou; Phoebe Koundouri; Lydia Papadaki |
| Abstract: | Sustainable shipping refers to the broad set of challenges, nature of governance rules and regulations, patterns of management and corporate behaviors and aims, engagement of stakeholders, and forms of industrial activity that should come to define a marine transport industry that is shaped by the broader societal goals of sustainable development. This chapter aims to provide a brief overview of the marine transport industry, its role and relevance in sustainable development and the kinds of changes that are needed for shipping to be sustainable. The focus is mostly on the environmental dimension of sustainable development. As a sector, and for reasons that have to do with the special nature of its international governance that partly falls outside the confines of national jurisdictions, shipping may have been a late comer to some of the most pressing sustainability challenges of our time. After presenting some recent economic trends of the sector and their potential implications for sustainability the chapter will present some environmental pressures that are related to shipping and will focus on two particular sustainability challenges confronted by maritime transport: the need to drastically reduce sulfur emissions and the even more demanding challenge to mitigate CO2 emissions. Before concluding, the penultimate section will briefly present some sustainability initiatives already under way. |
| Keywords: | Sustainable shipping, maritime transport, CO2 emissions mitigation, EU ETS |
| Date: | 2020–05–30 |
| URL: | http://d.repec.org/n?u=RePEc:aue:wpaper:2025&r=all |
| By: | Tega Anighoro |
| Abstract: | The high level of risk and uncertainty in harnessing oil and gas reserves poses an accounting dilemma in the reporting of reserves quantity information; information which is critical and relied on by investors for decision making. Different studies have indicated that reserves disclosure information is fundamental to understanding the value of the firm. This study attempts to contribute to the growing value relevance literature on reserves disclosures by examining the value relevance of the components of oil and gas reserve quantity change disclosures of upstream oil and gas companies in the London Stock Exchange. Particularly, it investigates the relationship between average historical share returns and changes in reserves from explorations, acquisitions, production, revisions and sale. It also examines the value relevance of the quality of these disclosures. Using archival data from LSE, databases and annual reports, and applying a multifactor framework, the empirical results suggested that changes in reserves as well as the components of these changes where associated with share returns though insignificantly due to the significant impact of oil price and longitudinal effect posed by applying the measurement approach with utilizes historical returns. However, the quality of reserves disclosures has a positively significant relationship with share returns. The volatility and decline in oil price is also reflected in both low average share returns at -0.4% and low average growth in reserves at 8.94% for the last 8 years in the sector. |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2005.14659&r=all |
| By: | Dorothée CHARLIER (USMB IREGE); Bérangère LEGENDRE (USMB IREGE) |
| Abstract: | Demographic aging affects Western societies and calls for the adaptation of a number of economic structures, such as pension systems. But this trend requires us to take into account the behavioral changes inherent in aging if we are develop sustainably, specifically concerning resource consumption and carbon dioxide emissions in the context of global warming. The aim of this research is to assess the impact of aging on emissions by disentangling the pure effect of behavioral patterns and the effect of home energy efficiency. Showing that a selection bias arises through the choice of home, we isolate the pure effect of the behavior of older people. We use a discrete-continuous model to address potential endogeneity in a residential energy consumption model due to the choice of home energy characteristics. As a key contribution, we provide evidence that age does have a significant but indirect impact on carbon dioxide emissions, through the choice of dwelling. |
| Keywords: | carbon dioxide emissions, aging, empirical analysis, endogeneity |
| JEL: | Q41 J14 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:fae:wpaper:2020.13&r=all |
| By: | Mekonnen,Alemu; Beyene,Abebe D.; Bluffstone,Randall Ames; Dissanayake,Sahan; Gebreegziabher,Zenebe; LaFave,Daniel; Martinsson,Peter; Toman,Michael A. |
| Abstract: | This paper reports on electronically-monitored improved use of the"Mirt"biomass stove in Ethiopia over a relatively long period of three-and-a-half years, using stove use data collected at five points in time. The results show that 62 percent of the households surveyed still retained their stoves after more than three years, which is a low level of abandonment, as the lifetime of the Mirt stove is approximately five years. Dis-adoption of the stove is not correlated with any of three monetary incentives provided at the time of distribution. With and without adjusting for dis-adoption, no longer-run differences in stove retention are found across treatments. Among those who retained their stoves, average regular stove use increased over time, but generally it is statistically the same toward the end of the first year. Thus, despite the relatively long timeframe, no decline is observed in regular usage. Comparing the persistence of the treatment effects, the paper finds that, in the longer run, subsidizing the cost most effectively promotes increased regular use over time. |
| Keywords: | Energy and Environment,Energy Demand,Energy and Mining,Health Care Services Industry,Tobacco Use and Control,Public Health Promotion,Disease Control&Prevention,Hydrology,Pollution Management&Control,Air Quality&Clean Air,Brown Issues and Health |
| Date: | 2020–06–08 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9272&r=all |
| By: | Alfredo Trespalacios; Lina M. Cortés; Javier Perote |
| JEL: | C14 C22 C53 L94 L98 Q2 |
| Date: | 2020–06–08 |
| URL: | http://d.repec.org/n?u=RePEc:col:000122:018186&r=all |
| By: | Mariola Ndrio; Subhonmesh Bose; Ye Guo; Lang Tong |
| Abstract: | Tie-line scheduling in multi-area power systems in the US largely proceeds through a market-based mechanism called Coordinated Transaction Scheduling (CTS). We analyze this market mechanism through a game-theoretic lens. Our analysis characterizes the effects of market liquidity, market participants' forecasts about inter-area price spreads, transaction fees and interaction of CTS markets with financial transmission rights. Using real data, we empirically verify that CTS bidders can employ simple learning algorithms to discover Nash equilibria that support the conclusions drawn from the equilibrium analysis. |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2006.03618&r=all |
| By: | Daniel Engler (University of Kassel); Elke D. Groh (University of Kassel); Gunnar Gutsche (University of Kassel); Andreas Ziegler (University of Kassel) |
| Abstract: | Based on data from a representative survey among citizens in Germany during the peak of the COVID-19 crisis, this paper empirically examines the acceptance of climate-oriented economic stimulus programs and several further climate policy measures. Our descriptive analysis shows no general lower acceptance of climate policy measures compared to the time before the crisis. However, the econometric analysis reveals that individuals with higher negative emotions towards the crisis are significantly less supportive of at least some climate-oriented policy measures. Economic concerns are of particular relevance. For example, a perceived deterioration of the general economic situation due to the COVID-19 crisis has a significantly negative effect on the acceptance of climate-oriented economic stimulus programs. Concerns about the own personal economic and financial situation due to the crisis are significantly negatively correlated with the support of climate-oriented policy measures that directly lead to higher costs in daily life. Besides the relevance of this perceived self-interest, our estimation results also highlight the relevance of social aspects since individuals with a social policy identification are significantly more likely to agree with climate-oriented policy measures that are also financially beneficial for socially deprived groups, but significantly less likely to support measures that are financially unfavorable for them. We discuss several climate policy implications. For example, our estimation results suggest that successful climate policy should, especially in times of the COVID-19 crisis, also be socially oriented and consider distribution effects, for example, through financial compensations for costly measures like taxes. |
| Keywords: | COVID-19 crisis, climate-oriented economic stimulus programs, climate policy measures, acceptance, multivariate probit models |
| JEL: | Q54 Q58 Q48 O44 H12 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:202029&r=all |
| By: | Jennifer Considine; Abdullah Aldayel; Emre Hatipoglu (King Abdullah Petroleum Studies and Research Center) |
| Abstract: | Despite numerous journal articles, forecasting studies, and books, very little is known about the actual quantitative value, or economic cost, of shocks to world oil markets. The potential consequences of a given political or economic disturbance are unclear, and appear to depend on market conditions at the time of forecast and the idiosyncratic nature of the shock (see Figure 1). This study develops a new analytical framework to analyze shocks to world oil markets. We build upon the global vector autoregression (GVAR) model developed in 2016 by Mohaddes and Pesaran to include a new variable, OECD oil inventories, creating the GVAR Oil and Inventory Model — GOVAR. We also expand its geographic coverage by adding two new countries, Russia and Venezuela. |
| Keywords: | GVAR, Oil markets, Oil Price, Oil Price Shocks |
| Date: | 2020–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:prc:mpaper:ks--2020-mp04&r=all |
| By: | Parrinello, Sergio (La Sapienza University of Rome) |
| Abstract: | The present paper contains two notes. The first one resumes and expands the classical approach to cope with the existence of exhaustible natural resources in the context of the theory of normal prices. Alternative closures of the model are envisaged: either a given supply of the resource or a given royalty. The fixed-supply alternative, suggested in (Parrinello 2004), rests on the method used in (Sraffa 1960) to deal with the case of intensive land cultivation. The fixed-royalty assumption reflects the position of Piccioni and Ravagnani (2002) and Ravagnani (2006) about the theory of absolute rent. The second note addresses the problem of numéraire dependence, which has been stressed as a criticism of models of general equilibrium without overall perfect competition, and argues that such a property may concern also the theory of normal prices with exhaustible natural resources. It is suggested that a way out from the impasse of the numéraire dependence should be found in an extension of the theory of normal prices to a monetary economy. |
| Keywords: | classical theory; Sraffian approach; exhaustible natural resources; numéraire dependency; price normalization. |
| JEL: | B51 D57 Q32 |
| Date: | 2020–05–20 |
| URL: | http://d.repec.org/n?u=RePEc:ris:sraffa:0041&r=all |
| By: | Aghion, Philippe; Bénabou, Roland; Martin, Ralf; Roulet, Alexandra |
| Abstract: | This paper investigates the joint effect of consumers' environmental concerns and product-market competition on firms' decisions whether to innovate "clean" or "dirty". We first develop a step-by-step innovation model to capture the basic intuition that socially responsible consumers induce firms to escape competition by pursuing greener innovations. To test and quantify the theory, we bring together patent data, survey data on environmental values, and competition measures. Using a panel of 8,562 firms from the automobile sector that patented in 42 countries between 1998 and 2012, we indeed find that greater exposure to environmental attitudes has a significant positive effect on the probability for a firm to innovate in the clean direction, and all the more so the higher the degree of product market competition. Results suggest that the combination of historically realistic increases in prosocial attitudes and product market competition can have the same effect on green innovation as major increase in fuel prices. |
| Keywords: | climate change; Competition; Environment; Innovation; patents; Social Responsibility |
| JEL: | D21 D22 D62 D64 H23 O3 O31 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14581&r=all |
| By: | Benedikt Downar; Jürgen Ernstberger; Stefan Reichelstein; Sebastian Schwenen; Aleksandar Zaklan |
| Abstract: | We examine whether a disclosure mandate for greenhouse gas emissions creates stakeholder pressure for firms to subsequently reduce their emissions. For UK-incorporated listed firms such a mandate was adopted in 2013. Using a difference-in-differences design, we find that firms affected by the mandate reduced their emissions – depending on the specification – by an incremental 14-18% relative to a control group. This reduction was accompanied by an average 9% increase in production costs. At the same time, the treated firms were able to increase their sales by an almost compensating amount. Taken together, our findings provide no indication that the disclosure requirement led to a significant deterioration in the financial operating performance of the treated firms, despite the significant carbon footprint reduction following the disclosure mandate. |
| Keywords: | Disclosure of non-financial information, mandatory disclosure, greenhouse gas emissions, real effects |
| JEL: | Q28 Q40 M41 M48 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1875&r=all |
| By: | Tran, T.N.; Nguyen, Thu Thuy; Nguyen, V.C.; Vu, T.T.H. |
| Abstract: | The purpose of this work is to study the effects energy consumption, economic growth and trade balance in the East Asian countries. Using a panel data analysis in the period over 1996-2015, the study analyzes based on the methods of fixed, random effects, and pooled ordinary least squares. The data were collected from World Development Indicators, Department of Statistics in relevant countries used in the study. Our results demonstrate that energy consumption has negatively affected trade balance while economic growth that can negatively affect the balance of trade but insignificant. Further, the prime factors that can significantly impact trade balance are exports, exchange rates and development level. Both exports and exchange rates have positive and significant impacted on trade balance. Finally, a country with a higher level of domestic income will certainly perform a higher level of trade balance. |
| Date: | 2020–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:rd6kv&r=all |
| By: | Antonin Pottier (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); Adrien Nguyen-Huu (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: | In "Why environmental management may yield no-regret pollution abatement options", Ecological Economics, 2009, Bréchet and Jouvet claim to have theoretically shown that profits maximizing firms can reduce pollution compared to laissez-faire and increase their profits. We correct multiple errors in their paper, with the conclusion that their claim no longer stands. |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-02615284&r=all |
| By: | ., Imelda; Fabra, Natalia |
| Abstract: | In many settings, market power gives rise to price differences across markets. While arbitrage reduces market power and price discrimination, it need not be welfare-enhancing. Instead, as shown in this paper, addressing market power directly (e.g., through forward contracts) also reduces price discrimination while improving consumers' and social welfare. Empirical evidence from the Spanish electricity market confirms our theoretical predictions. Using detailed bid data, we exploit two regulatory changes that switched from paying renewables according to variable or fixed prices, and vice-versa. Overall, we find that fixed prices (which act as forward contracts) were more effective in weakening firms' market power, even though variable prices led to less price discrimination through arbitrage. This shows that it is in general not correct to equate increased price convergence and stronger competition or enhanced effciency. |
| Keywords: | arbitrage; Forward contracts; market power; price discrimination; renewables |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14729&r=all |
| By: | Wenting Chen; Phoebe Koundouri; Osiel Gonzalez Davila; Claire Haggett; David Rudolph; Shiau-Yun Lu; Chia-Fa Chi; Jason Yu; Lars Golmen; Yung-Hsiang Ying |
| Abstract: | This chapter studies the social acceptance and socio-economic effects associated with the development of multi-use offshore platforms, using a theoretical concept in Taiwan as the relevant case-study. We use a face-to-face surveys together with in-depth interviews with local people and tourists who are currently or will be potentially affected by offshore developments on Liuqiu Island. A choice experiment is deployed to assess the ecosystem services and non-market effects of the platform. The social costs and benefits analysis are adopted to synthesize both market and non-market effects of the platform. The study finds a generally high support for the platform among tourists. The concern mainly focuses on the uncertain environmental impacts and effects on local fishery industry. Neither locals nor tourists view the energy hub which generates most income and jobs as a very attractive option. The Green & Blue concept shows a high environmental nonmarket benefit which amount to 618 million $NT. However, the high investment cost over weighs the positive GDP and environmental gain when comparing the social benefits with investment costs. |
| Keywords: | offshore platform, multi-use, social acceptance, ecosystem services, choice experiment, social costs and benefits |
| Date: | 2020–05–30 |
| URL: | http://d.repec.org/n?u=RePEc:aue:wpaper:2021&r=all |
| By: | KONISHI Yoko; SAITO Takashi; ISHIKAWA Toshiki |
| Abstract: | This paper estimates the hedonic price function from January 1996 to October 2019 using POS data of TVs, air conditioners, refrigerators, rice cookers, vacuum cleaners, and washing machines. While controlling for the standard specifications of each product, POS data was used to observe whether the degree of energy-saving functions and the presence or absence of additional functions contributed to higher value added. The largest difficulty is determining what specifications are representative of each product over an approximate 20-year span. We have constructed a new dataset that dataset for which this 20-year analysis is possible. In the estimation results, we were able to observe the effects of past and current consumption tax increases on each product market, as well as the effects of extreme weather, such as high temperatures, on each product market. We also observed technological changes in the home appliance market in Japan over the last 20 years, by counting the number of individual functions that home appliances featured and comparing them over time. Our estimation results showed that product size / volume and energy-saving functions are effective in explaining the price model of home appliances. |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:20018&r=all |
| By: | Koster, Hans R.A.; Nielsen, Victor Mayland; Ostermeijer, Francis; van Ommeren, Jos |
| Abstract: | How has the rise of the automobile influenced urban areas over the past century? In this paper we investigate the long-run impact of car ownership on urban population density, based on a sample of 232 city observations in 57 countries. Using the presence of a car manufacturer in 1920 as a source of exogenous variation, our IV estimates indicate that car ownership substantially reduces density. A one standard deviation increase in car ownership rates causes a reduction in population density of around 40%. For employment density we find almost identical results. This result has important implications for vehicle taxation, car ownership growth in developing countries, and new transport technologies such as automated vehicles. |
| Keywords: | Car ownership; urban density; vehicle costs |
| JEL: | R12 R40 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14717&r=all |
| By: | Duranton, Gilles; Puga, Diego |
| Abstract: | Urban density boosts productivity and innovation, improves access to goods and services, reduces typical travel distances, encourages energy-efficient construction and transport, and facilitates sharing scarce amenities. However, density is also synonymous with crowding, makes living and moving in cities more costly, and concentrates exposure to pollution and disease. We explore the appropriate measurement of density and describe how it is both a cause and a consequence of the evolution of cities. We then discuss whether and how policy should target density and why the trade-off between its pros and cons is unhappily resolved by market and political forces. |
| Keywords: | agglomeration; density; Urban costs |
| JEL: | R12 R31 R32 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14768&r=all |