|
on Energy Economics |
| By: | Do, H.; Nepal, R.; Jamasb, T. |
| 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: | 2020–02–03 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2007&r=all |
| By: | Anelí Bongers (Departamento de Teoría e Historia Económica, University of Málaga) |
| Abstract: | This paper studies the relationship between the energy mix and the environment using a theoretical framework in which two alternative energy sources are considered: fossil fuels (dirty energy) and renewable energy (clean energy). We find that a positive aggregate productivity shock increases energy consumption and emissions but reduces energy intensity and emissions per unit of output as renewable energy consumption increases, that is, carbon emissions are procyclical but emissions per unit of output are countercyclical. Second, an energy efficiency improvement provokes a ``rebound effect'' above $100\%$ (the backfire effect), resulting in a rise of pollutant emissions by increasing energy use. Third, a technological improvement in emissions leads to a reduction in emissions per unit of fossil fuel but also implies a slow-down in the adoption of renewable energy sources. Finally, we also study the effects of a price shock to the pollutant energy, resulting in a substitution of the ``dirty'' by the ``clean'' energy, leading to a decline in energy consumption and emissions but at the cost of decreasing output. |
| Keywords: | Energy mix; Emissions; Fossil fuels; Renewable energy; Technological change |
| JEL: | Q41 Q42 Q43 Q52 Q55 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:mal:wpaper:2020-5&r=all |
| By: | Guo, B., Newbery, D.; Newbery, D. |
| Abstract: | This paper replaces CWPE1951. An additional carbon tax in one market can distort electricity trade with external markets. We show how to estimate the deadweight cost of the distortion and possible external global benefits from reduced emissions, and investigate econometrically the impact of the British Carbon Price Support (CPS, an extra carbon tax) on GB’s cross-border electricity trade with France and The Netherlands. Over 2015-2018 the CPS raised GB day-ahead electricity price by about €11/MWh, after allowing for replacement by cheaper imports. It raised French wholesale price by 3.5% and Dutch wholesale price by 2.8%. The CPS increased GB imports by 12 TWh/yr, thereby reducing carbon tax revenue by €100 m/yr. Congestion income increased by €150 m/yr, half transferred to foreign interconnector owners. The unilateral CPS created €80 m/yr deadweight loss, about 32% of the initial social value created by the interconnector, or 4% of the global emissions benefit of the CPS at €2 bn/yr. About 0.9% of the CO2 emission reduction is undone by France and The Netherlands, the monetary loss of which is about €18 m/yr. |
| Keywords: | Carbon tax, Bilateral Trading, Electricity Market, Cost-benefit analysis |
| JEL: | Q48 F14 D61 C13 |
| Date: | 2020–03–10 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2014&r=all |
| By: | Antonin Pottier (CIRED); Emmanuel Combet (ADEME); Jean-Michel Cayla (EDF); Simona de Lauretis (CIRED); Franck Nadaud (CIRED) |
| Abstract: | This article provides an overview of the inequalities in greenhouse gas (GHG) emissions between French households. It presents in a detailed and critical manner the methodological conventions used to compute "household emissions", and the related assumptions. The most common principle of attribution, the carbon footprint, which assigns to households the emissions of the products they consume, conveys implicit conceptions of responsibility. It focuses attention on the contributions of individuals, on their choices, and may obscure the role of non-individual actors as well as the collective component of GHG emissions, and neglect the dimensions of responsibility not related to consumption choices. We estimate the distribution of household carbon footprints based on data from the 2011 French Expenditure Survey. Household emissions tend to increase with income, but they also show a strong variability linked to geographical and technical factors that force to use fossil fuels. Based on sectoral surveys (ENTD 2008; PHEBUS 2013), we also reconstruct household CO2 emissions linked to housing and transport energy. For transport, emissions are proportional to the distances travelled due to the predominant use of private cars. Urban settlement patterns constraint both the length of daily commuting and access to less carbon-intensive modes of transport. For housing, while house size increases with income and distance from urban centres, the first factor to account for variability of emissions is the heating system. It has little to do with income but more to do with settlement patterns, which constrain access to the various energy carriers. Finally, we discuss the difficulties, both technical and conceptual, involved in estimating emissions from the super-rich (the top 1 percent). |
| Keywords: | greenhouse gas emissions, carbon footprint, emissions inequality, household expenditure distribution, responsibility |
| JEL: | D12 D30 Q56 R20 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:fae:ppaper:2020.02&r=all |
| By: | Erich Muehlegger; David S. Rapson |
| Abstract: | The true net environmental benefit of an electric vehicle (EV) is measured relative to the vehicle that an EV buyer would have bought and driven had they not opted for an EV. This “counterfactual” vehicle cannot be observed, but its fuel economy can be estimated. We use quasi-experimental variation in a generous California EV subsidy program to show that buyers of EVs would have, on average, purchased relative fuel-efficient gasoline-powered cars had they not gone electric. The true incremental pollution abatement arising from the EV is thus substantially smaller when compared to this appropriate reference vehicle, as opposed to, say, the average new passenger car. |
| JEL: | Q48 Q52 Q58 R4 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27197&r=all |
| By: | Christiane Baumeister; Dimitris Korobilis; Thomas K. Lee |
| Abstract: | This paper evaluates alternative indicators of global economic activity and other market fundamentals in terms of their usefulness for forecasting real oil prices and global petroleum consumption. We find that world industrial production is one of the most useful indicators that has been proposed in the literature. However, by combining measures from a number of different sources we can do even better. Our analysis results in a new index of global economic conditions and new measures for assessing future tightness of energy demand and expected oil price pressures. |
| Keywords: | energy demand, forecasting, stochastic volatility, oil price pressures, petroleum consumption |
| JEL: | C11 C32 C52 Q41 Q47 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8282&r=all |
| By: | Klotz, Richard (Department of Economics, Colgate University); Berazneva, Julia (Department of Economics, Colgate University) |
| Abstract: | We examine how behavioral adjustments by regulated vessels affect welfare outcomes of a local fuel sulfur standard targeting particulate matter pollution from maritime transport. Our analysis combines one-minute scale data of vessel locations with location-specific marginal damages to obtain voyage-level measures of welfare outcomes. Exploiting the introduction of California's Ocean-Going Vessel Fuel Rule, we find sharp reductions in fuel consumption in the regulated area and a considerable emission spillover in unregulated waters. Despite these adjustments, the rule generates net benefits of close to $1 billion over 29 months because the emission spillovers occur in low marginal damage areas. |
| Keywords: | local environmental policy, behavioral adjustments, local air pollution, emission control areas |
| JEL: | D62 L51 Q51 Q52 Q53 Q58 R41 |
| Date: | 2020–06–16 |
| URL: | http://d.repec.org/n?u=RePEc:cgt:wpaper:2020-02&r=all |
| By: | Simshauser, P. |
| Abstract: | Merchant renewables are a new asset class. With historically high cost structures and low wholesale prices associated with merit order effects, continuity of entry has been reliant on Renewable Portfolio Standards or other policy initiatives such as government-initiated Contracts-for-Differences. But in Australia’s National Electricity Market, sharply falling costs of renewables and volatile wholesale market conditions from coal plant exits has led to a surprising number of merchant intermittent renewable investments. Adding to the merchant renewable fleet are older wind plants whose inaugural long-dated PPAs recently matured. Rolling over PPAs is possible, but not necessarily optimal. In this article, a merchant gas turbine, merchant wind, and an integrated portfolio comprising both plants are valued in the NEM’s South Australian region. Asset valuations reveal surprising results. The modelling sequence shows stand-alone gas turbine valuation metrics suffer from modest levels of missing money, that merchant wind can commit to some level of forward (fixed volume) swap contracts in-spite of intermittent production, but the combined portfolio tightens overall valuation metrics significantly. Above all, the combined portfolio is financially tractable, overcoming the missing money for a gas turbine plant undertaking peaking duties. In a NEM region where intermittent renewable market share exceeds 50%, this suggests the energy-only, real-time gross pool design may yet be deemed suitable vis-à-vis meeting environmental objectives and Resource Adequacy. |
| Keywords: | Merchant renewables, peaking plant, power plant valuations |
| JEL: | D61 L94 L11 Q40 |
| Date: | 2020–01–08 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2002&r=all |
| By: | Hung Do (School of Economics and Finance, Massey University, New Zealand); Rabindra Nepal (University of Wollongong); Tooraj Jamasb (Copenhagen Business School) |
| Keywords: | Market integration, electricity, renewable, energy policy, volatility |
| JEL: | D4 L94 Q2 Q4 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:enp:wpaper:eprg2003&r=all |
| By: | Bastien Dufau |
| Abstract: | Difficulties to adopt an international price of carbon has highlighted one of the most important objectives of countries: preserve their industries’ competitiveness. This article follows this idea and aims to evaluate the multisectoral and international impact of an energy shock. More precisely, the focus is made on a carbon tax and its impact on unit cost of production. In this article, the focus is made on a way to go through the limits of the input-output analysis by endogenizing technical coefficients. Using a flexible cost function permits to remove the non-substitution hypothesis and allows all sectors to optimize their demand of inputs. We use a Generalized Leontief (LG) implicit cost function in our input-output model. We show that this implicit cost function matches with the price input-output model in physical data. Finally, we study the impact of a carbon tax (40€/tCO2 or 80€/tCO2) at a European level. A cost competitiveness analysis shows that Poland would be mainly impacted by the tax, unlike the other European countries that maintain their competitiveness at the international level at the lower rate of tax. A strong heterogeneity among countries and industries stresses the necessity to focus negotiations on the recycling of the product of the tax. Then we compare the impact of the tax in France and in Germany and find a little impact on France’s competitiveness contrary to Germany. Nevertheless, if the tax is adopted at the European level, the French Manufacturing sector would be more impacted by the indirect effect of the tax through intermediate consumption. |
| Keywords: | Input-Output analysis, Competitiveness, Carbon tax, Multisectoral analysis, Energy, Flexibles functional forms |
| JEL: | D24 D57 F20 H23 L00 Q4 Q5 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:cec:wpaper:2005&r=all |
| By: | Shahbaz, Muhammad; Raghutla, Chandrashekar; Chittedi, Krishna Reddy; Jiao, Zhilun; Vo, Xuan Vinh |
| Abstract: | The use of non-renewable resources emits a high quantity of CO2 into environment, leading to a greenhouse effect, to reduce CO2 emissions all countries have shifted to use renewable energy sources. Therefore, this study re-examines the effect of renewable energy consumption on economic growth across 38 renewable-energy-consuming countries from 1990 to 2018. The dynamic ordinary least squares (DOLS), fully modified ordinary least squares (FMOLS) and heterogeneous non-causality approaches are applied. The empirical analysis confirms the presence of a long-run relationship between renewable energy consumption and economic growth. Further, we noted that renewable energy, non-renewable energy, capital and labor have positive impact on economic growth, particularly, renewable energy consumption has a positive impact on economic growth for 58% of the sample countries. The empirical results suggest that international cooperation agencies, energy organizers, governments, and associated bodies must act together in increasing renewable energy investment for low carbon growth in most of these economies. |
| Keywords: | Renewable Energy, Economic Growth, Renewable Energy Country Attractiveness Index |
| JEL: | Q5 |
| Date: | 2020–06–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:101168&r=all |
| By: | Nathan Delacrétaz; Bruno Lanz; Jeremy van Dijk |
| Abstract: | We document non-linear stock effects in the relationship linking emerging technology adoption and network infrastructure increments. We exploit 2010-2017 data covering nascent to mature electric vehicle (EV) markets across 422 Norwegian municipalities together with two complementary identification strategies: control function regressions of EV sales on flexible polynomials in the stock of charging stations and charging points, and synthetic control methods to quantify the impact of initial infrastructure provision in municipalities that previously had none. Our results are consistent with indirect network effects and the behavioral bias called "range anxiety", and support policies targeting early infrastructure provision to incentivize EV adoption. |
| Keywords: | Technology adoption; network externality; electric vehicles; charging infrastructure; two-sided markets; behavioral bias; range anxiety; environmental policy. |
| JEL: | L14 D62 L91 O33 Q48 Q55 Q58 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:irn:wpaper:20-08&r=all |
| By: | Jiyong Eom; Frank A. Wolak |
| Abstract: | Small businesses are typically committed to providing a positive customer experience and therefore may exhibit a response to dynamic electricity prices different from residential or industrial customers. We conduct a field experiment to determine the extent to which small businesses respond through re-configuration of typical routines throughout the experiment period versus through adjustments to specific dynamic pricing events. Using a customer-level survey of appliance ownership, we estimate the hourly response patterns of individual appliances to participation in the experiment versus individual dynamic pricing events. Consistent with our re-configuration hypothesis, small businesses primarily curtail electricity usage throughout the experiment period, although we also find a small imprecisely estimated response to dynamic pricing events on top of the re-configuration effect. Appliances not critical to a positive customer experience such as dish dryers, food storage units, lights, electric motors & pumps, and industrial heaters are the major sources of the energy savings from the re-configuration actions of these small businesses. |
| JEL: | Q4 Q41 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27263&r=all |
| By: | Wilson, A.; Nuttall, W.; Glowacki, B. |
| Abstract: | This study explores whether a nuclear power plant can be combined with a cryogenic energy storage plant to allow the resultant facility to provide variable power to the grid. The study expands on previous literature by performing novel market-led system optimisation to best design the output profile of the plant to improve economic performance in the UK electricity grid. There are three key conclusions that emerge from this study. The current UK electricity market favours plant designs with rapid discharge rate. Provided that the capital cost expectations of the NuScale SMR are realised, strike prices of £55/MWh are sufficient to ensure a return on investment. However, the case for storage remains weak and only becomes viable in extreme spot market conditions. |
| Keywords: | uncertainty analysis, power grid economics, energy storage, nuclear power |
| JEL: | C15 |
| Date: | 2020–01–08 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2001&r=all |
| By: | Bowei Guo (Faculty of Economics, University of Cambridge); Giorgio Castagneto Gissey (Bartlett School of Environment, Energy and Resources, University College London) |
| Keywords: | Electricity market, Cost pass-through, Competition, Carbon price, VECM |
| JEL: | L13 Q48 D41 H23 C32 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:enp:wpaper:eprg1937&r=all |
| By: | Palea, Vera; Drogo, Federico (University of Turin) |
| Abstract: | Over time, investors have become increasingly aware of the risks associated with a transition to a low-carbon economy. This study investigates the association between carbon emissions and the cost of debt financing for a sample of firms from the Eurozone in the period 2010 – 2018. Results provide evidence that the risk premium required by lenders increases with carbon emissions. However, while the most polluting sectors were already charged before the Paris Agreement, and not further penalized in the subsequent period, our results indicate that the less polluting sectors started being charged a higher spread for their emissions only in the period after the Agreement. The Paris Agreement appears to be a turning point around which lenders have become aware of the strong commitment taken by policymaker in fighting climate change. Our findings also suggest that increased levels of disclosure on climate-related issues can mitigate corporate carbon risk. On the other hand, results are not compelling when we consider the effect of control mechanisms, such as external verification for emissions, board oversight of carbon risk and the presence of emission reduction targets, on the cost of debt. |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:uto:dipeco:202002&r=all |
| By: | Ioannou, Petros; Giuliano, Genevieve; Dessouky, Maged; Chen, Pengfei; Dexter, Sue |
| Abstract: | The current freight transportation network is highly unbalanced as routing decisions are made by individual users without coordination. Certain routes may become congested when chosen based on current traffic information without any anticipation that if other users do the same, these routes are no longer the best. This project developed a centrally coordinated load balancing system that considers all user demands and generates individual routes that balance freight loads across the network by minimizing cost. It is initially assumed that all vehicles are diesel and then gradually increases zero emissions vehicles such as electric trucks for a mixed fleet of trucks. The electric trucks add additional constraints due to limitation of range and charging time of batteries. As the number of electric trucks increases, the emissions reduce as expected; however, the cost of charging does not make their use less operational costly than the corresponding diesel trucks. The experiments show that for electric trucks to compete with diesel, charging should occur when drivers are off duty or in idle mode since the cost of charging is mainly due to the labor cost of the waiting driver. Several simulation experiments show the benefits of deploying electric trucks in a freight fleet with respect to environment and operational cost, provided charging is scheduled appropriately. It is shown that the proposed centrally coordinated load balancing system can easily incorporate different concepts such as the empty container re-use where the exchange of containers between users can be optimized to reduce empty trips. In order to better understand the implementation issues of a load balancing system, the report also includes results from interviews of individuals responsible for trucking operations in the Los Angeles region. All interviewed trucking companies are either drayage operations (hauling freight to and from ports or intermodal facilities) or short-haul operators that move goods between manufacturers, distribution center, and retail facilities. The answer for load balancing system varies between interviewees and it is recommended to follow an iterative fashion by first targeting trucking companies who already work collaboratively in associations and vertical markets. These clusters of firms have built working relationships, engage in communication, and have trust between members. View the NCST Project Webpage |
| Keywords: | Engineering, Load balancing of freight, zero emission vehicles, mixed fleet, diesel and electric trucks, empty container reuse |
| Date: | 2020–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsdav:qt3ns4b894&r=all |
| By: | Gøril L. Andreassen; Knut Einar Rosendahl |
| Abstract: | What factors determine whether it is optimal with one or more technologies in a decarbonized road transport sector, and what policies should governments choose? We investigate these questions theoretically and numerically through a static, partial equilibrium model for the road transport market. We find that two important factors that determine whether it will be and whether it should be one or more technologies are how close substitutes the two vehicle technologies are and the number of vehicles of the other technology. Our numerical results indicate that with two incompatible networks, two differentiated goods are optimal compared to only one if they are not too close substitutes. The first-best policy is a subsidy of the markup on charging and filling, where the markup is higher the higher the increased utility of more stations. In addition, to avoid an unwanted lock-in, a temporary stimulus may be needed to reach the stable equilibrium. |
| Keywords: | ndirect network effects, decarbonisation, climate policy, electric vehicles, hydrogen vehicles |
| JEL: | H23 L14 L91 Q58 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8298&r=all |
| By: | Paul Simshauser (Griffith Business School, Griffith University) |
| Keywords: | vertical integration, electricity markets, energy-only markets, transaction costs, credit ratings |
| JEL: | D23 D24 G34 L94 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:enp:wpaper:eprg2008&r=all |
| By: | Andy Wilson (School of Engineering and Innovation, The Open University); William J Nuttall (School of Engineering and Innovation, The Open University); Bartek A Glowacki (Materials and Metallurgy Department, Cambridge University) |
| Keywords: | uncertainty analysis, power grid economics, energy storage, nuclear power |
| JEL: | C15 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:enp:wpaper:eprg2001&r=all |
| By: | Florian Böser (Center of Economic Research (CER-ETH), ETH Zurich, Switzerland); Chiara Colesanti Senni (Center of Economic Research (CER-ETH), ETH Zurich, Switzerland) |
| Abstract: | We use a dynamic general equilibrium model to study a climate-oriented monetary policy in the form of emission-based interest rates set by the central bank. Liquidity costs of banks increase with the emission intensity of their asset portfolio, leading banks to favor low-carbon assets and to improve the financing conditions for clean sectors. We show that such a monetary policy supports the decarbonization of the economy and reduces climate damage, as more resources are channeled to low-carbon sectors and incentives to adopt cleaner technologies increase across all sectors. We illustrate these effects by calibrating our model to data for the Euro Area. |
| Keywords: | climate change, monetary policy, banks, innovation, financial stability |
| JEL: | E42 E52 E58 O44 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:20-337&r=all |
| By: | David Newbery (Faculty of Economics, University of Cambridge) |
| Keywords: | Cost of CO2, Nuclear power, RAB, WACC, Cost Benefit Analysis |
| JEL: | D61 H23 L94 C54 E43 H54 L94 Q54 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:enp:wpaper:eprg2013&r=all |
| By: | Stephen Littlechild (University of Birmingham and CJBS) |
| Keywords: | retail energy markets, market power, efficient costs |
| JEL: | L94 L95 L51 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:enp:wpaper:eprg2015&r=all |
| By: | Habla, Wolfgang; Huwe, Vera; Kesternich, Martin |
| 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:zbw:zewdip:20026&r=all |
| By: | Bai-Chen Xie (College of Management and Economics, Tianjin University); Jun Xu (China Institute of Regulation Research, Zhejiang University of Finance and Economics); Michael G Pollitt (EPRG, University of Cambridge) |
| Keywords: | Chinese power market reform, electricity prices, No.9 Document |
| JEL: | L94 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:enp:wpaper:eprg2010&r=all |
| By: | Li-Qiu Liu (College of Management and Economics, Tianjin University); Zhong-Ling Yin (College of Management and Economics, Tianjin University); Bai-Chen Xie (College of Management and Economics, Tianjin University); Wei Zhou (EPRG, CJBS, Univrsity of Cambridge) |
| Keywords: | Happiness, Willingness to pay, Air pollution, China |
| JEL: | L94 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:enp:wpaper:eprg2009&r=all |
| By: | Nicolas Querou (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, CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | We consider a setting where agents are subject to two types of collective action problems, any group user's individual extraction inducing an externality on others in the same group (intra-group problem), while aggregate extraction in one group induces an externality on each agent in other groups (intergroup problem). One illustrative example of such a setting corresponds to a case where a common-pool resource is jointly extracted in local areas, which are managed by separate groups of individuals extracting the resource in their respective location. The interplay between both types of externality is shown to affect the results obtained in classical models of common-pool resources. We show how the fundamentals affect the individual strategies and welfare compared to the benchmark commons problems. Finally, different initiatives (local cooperation, inter-area agreements) are analyzed to assess whether they may alleviate the problems, and to understand the conditions under which they do so. |
| Keywords: | common-pool resource,collective action,externalities |
| Date: | 2020–06–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02790606&r=all |
| By: | Hyeongwoo Kim; Ying Lin; Henry Thompson |
| Abstract: | A number of researchers have found that the rate of exchange rate pass-through (ERPT) to domestic prices has declined substantially over the last few decades. We revisit this claim of a shrinking exchange rate effect on the Consumer Price Index (CPI) in a vector autoregressive (VAR) model for US macroeconomic data under the current floating exchange rate regime. Our VAR approach nests the conventional single equation method and reveals statistically significant evidence of ERPT to the CPI only during later observations, sharply contrasting with previous findings. After confirming structural breaks in ERPT via statistical tests by Hansen (2001) and Qu and Perron (2007), we seek the source with disaggregated level CPIs, and pin down a key role of energy prices. US energy imports increased from the 1990s until the recent recession. This market changes magnify the effects of the exchange rate shocks on domestic energy prices, resulting in greater responses of the total CPI via the energy price channel. |
| Keywords: | Exchange Rate Pass Through; Disaggregated CPI Inflation; Structural Break; Real Exchange Rate Shock |
| JEL: | E31 F31 F41 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:abn:wpaper:auwp2020-03&r=all |
| By: | Geoffroy G Dolphin (EPRG, CJBS, University of Cambridge); Michael G Pollitt (EPRG, CJBS, University of Cambridge) |
| Keywords: | innovation, electricity sector, machine learning |
| JEL: | L94 O31 O38 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:enp:wpaper:eprg2004&r=all |
| By: | Abhishek Gupta (Montreal AI Ethics Institute; Microsoft); Camylle Lanteigne (Montreal AI Ethics Institute; McGill University); Sara Kingsley (Carnegie Mellon University) |
| Abstract: | In a world increasingly dominated by AI applications, an understudied aspect is the carbon and social footprint of these power-hungry algorithms that require copious computation and a trove of data for training and prediction. While profitable in the short-term, these practices are unsustainable and socially extractive from both a data-use and energy-use perspective. This work proposes an ESG-inspired framework combining socio-technical measures to build eco-socially responsible AI systems. The framework has four pillars: compute-efficient machine learning, federated learning, data sovereignty, and a LEEDesque certificate. Compute-efficient machine learning is the use of compressed network architectures that show marginal decreases in accuracy. Federated learning augments the first pillar's impact through the use of techniques that distribute computational loads across idle capacity on devices. This is paired with the third pillar of data sovereignty to ensure the privacy of user data via techniques like use-based privacy and differential privacy. The final pillar ties all these factors together and certifies products and services in a standardized manner on their environmental and social impacts, allowing consumers to align their purchase with their values. |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2006.06217&r=all |
| By: | Janusz Bialek (Newcastle University, UK) |
| Keywords: | power blackouts, UK electricity, security of supply |
| JEL: | L94 O31 O38 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:enp:wpaper:eprg2006&r=all |
| By: | Thibaut Th\'eate; S\'ebastien Mathieu; Damien Ernst |
| Abstract: | Retailers and major consumers of electricity generally purchase a critical percentage of their estimated electricity needs years ahead on the forward markets. This long-term electricity procurement task consists of determining when to buy electricity so that the resulting energy cost is minimised, and the forecast consumption is covered. In this scientific article, the focus is set on a yearly base load product, named calendar (CAL), which is tradable up to three years ahead of the delivery period. This research paper introduces a novel algorithm providing recommendations to either buy electricity now or wait for a future opportunity based on the history of CAL prices. This algorithm relies on deep learning forecasting techniques and on an indicator quantifying the deviation from a perfectly uniform reference procurement strategy. Basically, a new purchase operation is advised when this mathematical indicator hits the trigger associated with the market direction predicted by the forecaster. On average, the proposed approach surpasses benchmark procurement strategies and achieves a reduction in costs of 1.65% with respect to the perfectly uniform reference procurement strategy achieving the mean electricity price. Moreover, in addition to automating the electricity procurement task, this algorithm demonstrates more consistent results throughout the years compared to the benchmark strategies. |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2006.05784&r=all |
| By: | Parantap Basu (Durham University Business School, Durham University); Tooraj Jamasb (Copenhagen Business School) |
| Keywords: | Green growth, sustainability, carbon tax, clean growth, resource substitution |
| JEL: | E1 O3 O4 Q2 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:enp:wpaper:eprg2011&r=all |
| By: | Torben K. Mideksa |
| Abstract: | I examine a policy-making game among countries that must choose both a policy instrument (e.g., a tax or a quota) and its intensity (i.e., the tax rate or the quota level) to price pollution. When countries price pollution non-cooperatively, they not only set the intensity inefficiently, they are also likely to adopt Pigouvian fees, despite quotas being better from a welfare perspective. Adopting a Pigouvian fee to address a multi-country externality generates a risk externality, and non-cooperatively chosen quotas can generate higher social welfare than maximum social welfare Pigouvian fees can deliver. |
| Keywords: | environmental policy, global pollution, international relations |
| JEL: | C72 D81 F50 H21 Q38 Q58 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8269&r=all |
| By: | Kilian, Lutz; Zhou, Xiaoqing |
| Abstract: | Oil market VAR models have become the standard tool for understanding the evolution of the real price of oil and its impact in the macro economy. As this literature has expanded at a rapid pace, it has become increasingly difficult for mainstream economists to understand the differences between alternative oil market models, let alone the basis for the sometimes divergent conclusions reached in the literature. The purpose of this survey is to provide a guide to this literature. Our focus is on the econometric foundations of the analysis of oil market models with special attention to the identifying assumptions and methods of inference. We not only explain how the workhorse models in this literature have evolved, but also examine alternative oil market VAR models. We help the reader understand why the latter models sometimes generated unconventional, puzzling or erroneous conclusions. Finally, we discuss the construction of extraneous measures of oil demand and oil supply shocks that have been used as external or internal instruments for VAR models. |
| Keywords: | Bayesian estimation; Elasticity; identification; Model specification; structural VAR; textual analysis |
| JEL: | C36 C52 Q41 Q43 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14460&r=all |
| By: | Jayasooriya, Sujith |
| Abstract: | The economic growth depends on changes in the demographic profile of a country. However, the demographic change over economic growth has positive and negative relationships in the literature. Further, testing a Kuznets model of economic growth is not adequately estimated in the field of demographic and structural transformation in South Asia. The study uses panel data model for understanding the structural change over the demographic changes of the South Asian economies. A panel unit root test and GMM dynamic panel data model will be evaluated with the use of Kuznets curve approach. The results of GMM dynamic panel data estimation show a strong relationship among CO2 emission, demographic profile and economic growth. It revealed that 1% increase in GDP increases 3.033% of the CO2 emission. However, increase of 1% demographic profile of the South Asia decreases CO2 emission by 0.058%. Thereby, the changes of demographic profile with respect to the changes of economic growth can reduce the environmental degradation and promote sustainability in development policies. |
| Keywords: | Panel Data, GMM, Kuznets Curve, Demographic Profile, Economic Growth |
| JEL: | C5 C51 E6 J1 O4 O44 |
| Date: | 2020–06–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:100831&r=all |
| By: | Paul Simshauser (Griffith Business School, Griffith University); Joel Gilmore (Griffith Business School, Griffith University) |
| Keywords: | Renewables, energy markets, investment cycles |
| JEL: | D24 G31 L94 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:enp:wpaper:eprg2014&r=all |
| By: | Paul Simshauser (Griffith Business School, Griffith University) |
| Keywords: | Merchant renewables, peaking plant, power plant valuations |
| JEL: | D61 L94 L11 Q40 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:enp:wpaper:eprg2002&r=all |
| By: | Stuart Evans (London School of Economics); Michael A Mehling (CEEPR, Massachusetts Institute of Technology); Robert A Ritz (EPRG, University of Cambridge); Paul Sammon (London School of Economics) |
| Keywords: | Border carbon adjustment, carbon pricing, competitiveness, international trade |
| JEL: | H23 K33 Q54 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:enp:wpaper:eprg2007&r=all |
| By: | David Popp; Francesco Vona; Giovanni Marin; Ziqiao Chen |
| Abstract: | We evaluate the employment effect of the green part of the largest fiscal stimulus in recent history, the American Recovery and Reinvestment Act (ARRA). Each $1 million of green ARRA created 15 new jobs that emerged especially in the post-ARRA period (2013-2017). We find little evidence of significant short-run employment gains. Green ARRA creates more jobs in commuting zones with a greater prevalence of pre-existing green skills. Nearly half of the jobs created by green ARRA investments were in construction or waste management. Nearly all new jobs created are manual labor positions. Nonetheless, manual labor wages did not increase. |
| JEL: | E24 E62 H54 H72 Q58 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27321&r=all |
| By: | Gilles Duranton; Diego Puga |
| 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. |
| JEL: | R12 R31 R32 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27215&r=all |
| By: | Philipp Baumann; Enzo Rossi; Alexander Volkmann |
| Abstract: | We analyze which forces explain inflation and how in a large panel of 124 countries from 1997 to 2015. Models motivated by economic theory are compared to an approach based on model-based boosting and non-linearities are explicitly considered. We provide compelling evidence that the interaction of energy price and energy rents stand out among 40 explanatory variables. The output gap and globalization are also relevant drivers of inflation. Credit and money growth, a country's inflation history and demographic changes are comparably less important while central bank related variables as well as political variables turn out to have the least empirical relevance. In a subset of countries public debt denomination and exchange rate arrangements also play a noteworthy role in the inflation process. By contrast, other public-debt variables and an inflation targeting regime have weaker explanatory power. Finally, there is clear evidence of structural breaks in the effects since the financial crisis. |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2006.06274&r=all |
| By: | Maïmouna Yokessa (ECO-PUB - Economie Publique - INRA - Institut National de la Recherche Agronomique - AgroParisTech); Stephan Marette (ECO-PUB - Economie Publique - INRA - Institut National de la Recherche Agronomique - AgroParisTech) |
| Abstract: | In many countries, various eco-labels have emerged for informing consumers about the environmental impact of the offered products. Using recent advances in the empirical and theoretical literature, this review questions the efficiency of eco-labeling. We combine a literature review with discussions of empirical examples. We underline the limitations of eco-labels for signaling credible information to consumers. In particular, both the complexity and the proliferation of eco-labels are likely to hamper their efficiency in guiding consumers. From a regulatory perspective, several studies show that eco-labels are useful, but they cannot be considered a panacea for improving environmental quality. Indeed, it is often socially optimal to combine eco-labels with other regulatory tools such as standards banning polluting products and tax/subsidy mechanisms depending on the environmental quality. The conclusion suggests research priorities for tackling unanswered questions |
| Abstract: | Cet article s'intéresse à l'efficacité et aux limites des écolabels, en se basant sur des études empiriques et théoriques. Du point de vue de la régulation, les écolabels sont utiles, mais ne suffisent pas à limiter l'impact environnemental des biens et services. Il est souvent plus optimal socialement de combiner les écolabels avec d'autres instruments régulatoires comme les normes, les taxes ou les subventions. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02628579&r=all |
| By: | Ashish Kumar Sedai (Department of Economics, Colorado State University); Rabindra Nepal (University of Wollongong); Tooraj Jamasb (Copenhagen Business School) |
| Keywords: | Women Empowerment, Quality of Electrification, Instrumental Variables |
| JEL: | D13 D63 H42 Q43 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:enp:wpaper:eprg2012&r=all |
| By: | Tancrède Voituriez (IDDRI - Institut du Développement Durable et des Relations Internationales - Institut d'Études Politiques [IEP] - Paris, UMR ART-Dev - Acteurs, Ressources et Territoires dans le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - UM3 - Université Paul-Valéry - Montpellier 3 - UPVD - Université de Perpignan Via Domitia - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique, Cirad-ES - Département Environnements et Sociétés - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement) |
| Date: | 2020–05–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02567919&r=all |
| By: | Vollebergh, Herman (Tilburg University, School of Economics and Management); Brink, Corjan |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiutis:797919bb-6d56-4268-90b7-db5f52ab9b15&r=all |
| By: | Paola D'Orazio; Lilit Popoyan |
| Abstract: | The awareness about climate-related financial risks is gaining momentum both in the policy and academic debates. The role of countriesù institutional dimension and central bank governance structures in the adoption of green prudential regulation is, however, overlooked in the current discussion. The paper fills this gap by proposing an analysis of the state-of-the-art, challenges and perspectives, of ''green'' central banking. The study complements existing research that usually points to an ''extended'' monetary policy mandate, including, for example, sustainability objectives or green growth, as the primary motivation for a central bank to engage in ''green'' financial policymaking. According to our research, the decision to implement green regulations is not exclusively related to the mandate per se, but on the central bank's independence and on how the interaction between the monetary and prudential policy is structured. Moreover, the higher exposure to climate-related adverse events also plays a crucial role in the adoption of green prudential regulations. To avoid potential conflicts between monetary policy and green prudential regulation caused by existing intertwined transmission mechanisms, on the one hand, our analysis emphasizes the importance of having a central bank that hosts the green prudential regulation under its governance roof. On the other hand, when the ''green'' governance models studied in the paper are in place, the Tinbergen principle is safeguarded. |
| Keywords: | Central banking; Policy mandate; Macroprudential policy; Central bank governance; Climate change. |
| Date: | 2020–07–02 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2020/19&r=all |