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on Energy Economics |
| By: | Neeraj Bokde; Bo Tranberg; Gorm Bruun Andresen |
| Abstract: | In the Paris agreement of 2015, it was decided to reduce the CO2 emissions of the energy sector to zero by 2050 and to restrict the global mean temperature increase to 1.5 degree Celcius above the pre-industrial level. Such commitments are possible only with practically CO2-free power generation based on variable renewable technologies. Historically, the main point of criticism regarding renewable power is the variability driven by weather dependence. Power-to-X systems, which convert excess power to other stores of energy for later use, can play an important role in offsetting the variability of renewable power production. In order to do so, however, these systems have to be scheduled properly to ensure they are being powered by low-carbon technologies. In this paper, we introduce a graphical approach for scheduling power-to-X plants in the day-ahead market by minimizing carbon emissions and electricity costs. This graphical approach is simple to implement and intuitively explain to stakeholders. In a simulation study using historical prices and CO2 intensity for four different countries, we find that the price and CO2 intensity tends to decrease with increasing scheduling horizon. The effect diminishes when requiring an increasing amount of full load hours per year. Additionally, investigating the trade-off between optimizing for price or CO2 intensity shows that it is indeed a trade-off: it is not possible to obtain the lowest price and CO2 intensity at the same time. |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2009.03160&r=all |
| By: | Ekundayo P. Mesagan (University of Lagos, Lagos, Nigeria); Chidi N. Olunkwa (University of Lagos, Nigeria) |
| Abstract: | This study investigates the effects of energy consumption and capital investment on environmental degradation in selected African countries between 1981 and 2017 using panel cointegration approaches. The Fully Modified and the Dynamic Ordinary Least Squares results affirm that energy consumption positively affects carbon emissions in Algeria, Nigeria, Morocco, and in the panel. At the same time, both also confirm that capital investment positively and significantly impacts carbon emissions in the region. Again, results show that capital investment augments energy use to reduce carbon emissions in Africa significantly. This implies that capital investment can provide needed impetus to reduce environmental degradation in the continent. The study, therefore, recommends that African countries should focus on energy conservation policies to reduce the adverse effect of energy use on carbon emissions. |
| Keywords: | Electricity Consumption, Capital investment, Environmental Degradation, Africa |
| JEL: | Q40 Q42 Q43 Q54 Q57 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:abh:wpaper:20/022&r=all |
| By: | Odhiambo, Nicholas M |
| Abstract: | In this paper we examine the causal relationship between energy consumption and economic growth in Botswana during the period 1980-2016. We disaggregate energy consumption into six components, namely: total energy consumption, electricity consumption, motor gasoline, gas/diesel oil, fuel oil and liquefied petroleum gas. We then compare the results of the disaggregated energy components with that of the aggregated energy consumption level. In order to account for the omission-of-variable bias, we incorporate inflation and trade openness as intermittent variables between the various components of energy consumption and economic growth, thereby creating a system of multivariate equations. Using the ARDL-bound testing approach, the study found a causal flow from economic growth to energy consumption to predominate. This finding has important policy implications as it shows that the buoyant economic growth that Botswana has enjoyed over the years is not energy-dependent, and that the country could pursue the requisite energy conservation policies without necessarily stifling its economic growth. To our knowledge, this study may be the first of its kind to examine in detail the causal relationship between energy consumption and economic growth in Botswana using a multivarite causality model and a disaggregated dataset. |
| Keywords: | Botswana, Disaggregated Energy Consumption, Economic Growth, ARDL-bounds Testing Approach |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:uza:wpaper:26649&r=all |
| By: | Kaitila, Ville |
| Abstract: | Abstract In order to fight the climate change, the European Union and Finland as its member country are seeking carbon neutrality by 2050, Finland already by 2035. In this brief, we assess the development of Finnish greenhouse gas emissions (CO2 equivalent) in 2019–2024 based on Etla’s most recent macroeconomic and industry sector forecasts. Technological change that will cut greenhouse gas emissions is paramount for the efforts to reach carbon neutrality. We use three technological assumptions that describe how the emission intensity of value added may develop. Our baseline scenario, based on how value added will change in each industry combined with their average development in emission intensity over the past few years, shows that the aggregate emissions will decrease on average by about four per cent annually in 2019–2024. Compared to our previous forecast, we have now calculated the development of CO2 emissions in the electricity, gas and steam producing sector and the development of carbon sinks in a new way. However, this good development is not yet enough to reach the carbon neutrality target which requires a speed of decline in emissions of around six per cent annually. Consequently, technological change needs to accelerate considerably. The public sector can support the efforts to reach carbon neutrality by, among other things, R&D funding, removing harmful subsidies, introducing environmental taxes, and being active in the development of the EU’s emissions trading system. Carbon neutrality can also be taken into account in public procurement and infrastructure investments. |
| Keywords: | Economic forecast, CO2, Carbon neutrality, Emissions trading |
| JEL: | E17 O11 O30 O44 O47 |
| Date: | 2020–09–08 |
| URL: | http://d.repec.org/n?u=RePEc:rif:briefs:90&r=all |
| By: | Christian von Hirschhausen; Claudia Kemfert; Fabian Praeger |
| Abstract: | This paper discusses the potential role of fossil natural gas (and other gases) in the process of the energy transformation in Europe on its way to complete decarbonization. Mainstream conventional wisdom has it that natural gas, perhaps in combination with other gases, should maintain an important role in the energy mix, first, as a “bridge fuel”, and then through a gradual transition toward decarbonized gases. This is most comprehensively rolled out in three consecutive discussion papers by Jonathan Stern from the Oxford Institute for Energy Studies (2017b, 2017a, 2019). Based on an in- depth assessment of the ambitious climate targets of the EU and the subsequent need for far-reaching decarbonization, as well as on results from energy system modeling, a contrasting result emerges, where the disappearance of fossil natural gas and its corresponding infrastructure is the next logical step of the transformation process in Europe. The lack of an economic perspective for nuclear power and the absence of a plausible deployment of large-scale carbon-dioxide removal technologies (CDR) imply that natural gas has no “sweet spot” any longer in the decarbonization process. In other words: Fossil natural gas is no longer part of the solution to the challenge of climate change, but has become part of the problem. Over the last years, the phasing out of natural gas in Europe has already started, and will continue until its complete phase-out, most likely in the 2040s, i.e. only two decades from now. The decline of natural gas in Europe has implications for the short- and longer-term aggregate and sectoral energy mix, but also for the future of the lumpy infrastructure, that has been developed over the last decades for a growing market. Today, investments into natural gas infrastructure are likely to produce stranded assets, as we show in three concrete cases: The € 10 bn. investment into the North Stream 2 pipeline are not necessary to assure European supply security, nor to make a return on investment; projects of new LNG terminals on the shore of the German North Sea (Brunsbuettel, Stade, Wilhelmshaven) lack a business case; and new natural gas power plants are likely to be unprofitable. The paper proposes to replace the dominant narrative (“natural gas in decarbonizing European energy markets“) with what we consider a more coherent narrative in the context of decarbonization: Fossil natural gas exit. |
| Keywords: | Europe, decarbonization, fossil natural gas, energy gases |
| JEL: | Q48 Q54 L52 L95 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1892&r=all |
| By: | Geoffrey Heal |
| Abstract: | I make three points relating to the transition from fossil fuels to non-carbon energy. One is that the economic cost of moving from fossil fuels to renewable energy in electricity generation is very low, and probably lower than many estimates of the economic benefits from this change. The second is that, if it were to move the economy away from fossil fuels and from oil in particular, a carbon tax would have to be much great than generally believed, in the range of $400 per ton CO2 or above. Finally, decarbonization of the economy implies electrification, the replacement of fossil fuels by electricity in for example space heating. Currently electricity is far too expensive for this to be politically realistic: this is because its price does not reflect its marginal cost but this plus a wide range of fixed costs that are recovered in the per kilowatt hour charge. If we are to electrify the economy then the price of electricity will need to be nearer to its marginal cost, which raises questions about the business models of utilities. |
| JEL: | Q42 Q54 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27766&r=all |
| By: | Henri-Louis Vedie |
| Abstract: | The Kingdom of Morocco, which has no oil and gas, has shifted to renewable energy as early as 1960, giving priority to hydroelectricity and the construction of dams. However, most of the country’s power plants were and remain powered by diesel or gas, which has a heavy impact on its balance payments. Since then, the demand for electricity has continued to grow due to the country’s development on the one hand and, as a result of the use of desalination facilities on the other hand, which consume a lot of electricity, to meet the constantly increasing drinking water needs. Since 2009, and at the initiative of King Mohammed VI, renewable energy has become a reign-long project, with the objective of covering 42% of the electricity produced by 2020. To achieve this goal, three branches will be used to contribute an equal share of 14% each: hydropower, wind energy and solar energy. This study shows that this objective should be achieved at the cost of considerable investment, with a focus on state-of-the-art technologies. Over and above this statistical success, Morocco will also be able to export the know-how learned, particularly in the solar and wind fields, a success which should give hope to emerging economies deprived of fossil energy, in search of development and sustainable development. |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:ocp:ppaper:pb20-11-1&r=all |
| By: | Thomas Longden (Crawford School of Public Policy, Australian National University); Frank Jotzo (Crawford School of Public Policy, Australian National University); Mousami Prasad (Crawford School of Public Policy, Australian National University); Richard Andrews (Crawford School of Public Policy, Australian National University) |
| Abstract: | A crucial question in the development of a hydrogen industry is whether green hydrogen, made using renewable energy, will be able to be produced at a cost that makes it attractive compared to hydrogen produced from fossil fuels. The main factors are the cost of electricity and the cost of electrolysers, together with capacity utilisation rates. Over recent years the cost of electricity from solar PV and wind have fallen dramatically, and further reductions are expected. Cost reductions are also being realised for electrolysers. In this note, we compile recent cost estimates and projections to provide plausible ranges for the production cost of green hydrogen. We find that the cost of green hydrogen could readily be at or below A$3/kg in the near future, and that the ‘stretch goal’ of A$2/kg mentioned in Australian strategy documents is likely to come into reach, possibly rapidly. |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:2007&r=all |
| By: | Baikowski, Martin; Koesler, Simon |
| Abstract: | Changes in energy consumption behaviour of households are recognised as a main contributor to reduced energy demand in developed countries. We investigate the economy-wide impacts of a more efficient electricity consumption behaviour in the presence of demand rigidities and consumption habits. Our findings demonstrate that in the context of energy efficiency improvements in households, taking into account rebound effects is vital, as rebound effects can drastically reduce expected energy savings. We further point out that policies aimed at reducing household energy consumption should always take demand rigidities and consumption habits into account, otherwise rebound effects could be significantly underestimated. |
| Keywords: | rebound,demand rigidities,energy service consumption,consumption habits |
| JEL: | D13 D58 Q41 Q43 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cawmdp:120&r=all |
| By: | Steve Cicala (University of Chicago - Harris School of Public Policy and NBER); Stephen P. Holland (University of North Carolina at Greensboro - Department of Economics and NBER); Erin T. Mansur (Dartmouth - Tuck School of Business and NBER); Nicholas Z. Muller (Carnegie Mellon University and NBER); Andrew J. Yates (University of North Carolina at Chapel Hill) |
| Abstract: | The COVID-19 pandemic resulted in stay-at-home policies and other social distancing behaviors in the United States in spring of 2020. This paper examines the impact that these actions had on emissions and expected health effects through reduced personal vehicle travel and electricity consumption. Using daily cell phone mobility data for each U.S. county, we find that vehicle travel dropped about 40% by mid-April across the nation. States that imposed stay-at-home policies before March 28 decreased travel slightly more than other states, but travel in all states decreased significantly. Using data on hourly electricity consumption by electricity region (e.g., balancing authority), we find that electricity consumption fell about six percent on average by mid-April with substantial heterogeneity. Given these decreases in travel and electricity use, we estimate the county-level expected improvements in air quality, and therefore expected declines in mortality. Overall, we estimate that, for a month of social distancing, the expected premature deaths due to air pollution from personal vehicle travel and electricity consumption declined by approximately 360 deaths, or about 25% of the baseline 1500 deaths. In addition, we estimate that CO2 emissions from these sources fell by 46 million metric tons (a reduction of approximately 19%) over the same time frame. |
| Keywords: | Air pollution, COVID-19, Social Distancing |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:bfi:wpaper:2020-61&r=all |
| By: | Hintermayer, Martin (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)) |
| Abstract: | Despite the reform of the European Emissions Trading System (EU ETS), discussions about complementing it with a carbon price floor (CPF) are ongoing. This paper analyzes the effect of a European CPF in the reformed EU ETS using a Hotelling model of the EU ETS, amended by the market stability reserve (MSR), and the cancellation mechanism. Two CPF designs are compared: (1) a buyback program and (2) a top-up tax. The buyback program sets a minimum price for the allowances from the implementation year onwards. After the announcement, firms anticipate the CPF, which immediately increases the carbon price to the discounted CPF level. Therefore, firms emit less and bank more allowances, leading to more intake into the MSR, and more cancellation of allowances. The top-up tax imposes a tax on emissions, which enhances the market price of allowances to the CPF level from the implementation year onwards. Firms increase their short-run emissions in anticipation of the upcoming tax. Only after the implementation year firms start to lower their emissions. Thus, the effect on aggregate cancellation is ambiguous. Despite being equivalent in a static setting, the design choice for the CPF matters in a dynamic context, such as the EU ETS. |
| Keywords: | Intertemporal Emission Trading; Carbon Price Floor; EU ETS |
| JEL: | H23 H32 Q58 |
| Date: | 2020–09–08 |
| URL: | http://d.repec.org/n?u=RePEc:ris:ewikln:2020_003&r=all |
| By: | Jorrit Gosens (Crawford School of Public Policy, Australian National University) |
| Abstract: | Countries in the global South, or developing and emerging economies, are experiencing rapid economic growth, and increased economic integration with other countries in the global South, including trade. Some analysts have raised concerns that such South-South trade might encourage the use of outdated conventional energy technologies, and lock developing countries into high carbon growth paths. Here, trade data from the UN Comtrade database is analyzed with a gravity model of trade. Results show that levels of clean energy technologies in South-south trade were relatively low up until the first half of the 2010’s, but that these are entirely comparable to North-North or other trade flows in recent years. The analysis thus finds no evidence to support concerns that South-South trade might encourage high carbon development. South-South trade contains particularly high levels of solar PV, hydropower, and electric two-wheeler technologies, whilst exporters in the global North are more competitive in markets for wind power equipment and electric vehicles. Trade in electric vehicles is the fastest growing class of clean energy technologies, and the dominance of Northern countries in their exports may mean that South-South trade could, in the foreseeable future, once again lag behind in levels of clean energy technologies. |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:2003&r=all |
| By: | Puja Singhal |
| Abstract: | Effective attention to information may play a prominent role in consumer choice for energy-intensive services and it may simply be a function of receiving timely information when consumption takes place. This paper investigates whether and why the timing of utility bills leads to salience bias in heat energy consumption. In Germany, the 12-month billing period varies across buildings with a significant share of buildings receiving bills during the summer months, when the salience of heating costs is absent or low. I exploit this large-scale natural experiment in utility billing cycles at the building level to identify the salience effect of costs on energy consumption and the underlying heterogeneity in the average treatment effect. I find new evidence for consumer inattention to energy costs: consumers that are billed for heating during off-winter months demand more heat energy annually. Results suggest that households are paying attention to their heating costs in the first three months of the 12-month billing period. As a result, bills immediately before the winter heating season are most effective, allowing ample opportunity to adjust consumption. I show that salience bias in consumption is persistent and pervasive – affecting households in all regions and building/technology type. Engaging energy users with salient bills, not necessarily more frequent, has the potential to reduce energy consumption in the residential sector significantly. This paper further examines whether enduring differences in consumer inattention to energy costs had a long-run impact on thermal efficiency investments by building owners – with implications for the energy-efficiency gap. |
| Keywords: | Heating bills, natural experiment, cost salience, consumer inattention, energy consumption, energy efficiency |
| JEL: | D12 Q41 Q58 Q52 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1891&r=all |
| By: | Rohan Best (Department of Economics, Macquarie University); Paul J. Burke (Crawford School of Public Policy, Australian National University); Frank Jotzo (Crawford School of Public Policy, Australian National University) |
| Abstract: | To date there has been an absence of cross-country empirical studies on the efficacy of carbon pricing. In this paper we present estimates of the contribution of carbon pricing to reducing national carbon dioxide (CO2) emissions from fuel combustion, using several econometric modelling approaches that control for other key policies and for structural factors that are relevant for emissions. We use data for 142 countries over a period of two decades, 43 of which had a carbon price in place at the national level or below by the end of the study period. We find evidence that the average annual growth rate of CO2 emissions from fuel combustion has been around two percentage points lower in countries that have had a carbon price compared to countries without. An additional euro per tonne of CO2 in carbon price is associated with a reduction in the subsequent annual emissions growth rate of approximately 0.3 percentage points, all else equal. While it is impossible to fully control for all relevant influences on emissions growth, our estimates suggest that the emissions trajectories of countries with and without carbon prices tend to diverge over time. |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:2004&r=all |
| By: | Simplice A. Asongu (Yaounde, Cameroon); Xuan V. Vo (University of Economics Ho Chi Minh City, Vietnam) |
| Abstract: | There is a glaring concern of income inequality in the light of the post-2015 global development agenda of sustainable development goals (SDGs), especially for countries that are in the south of the Sahara. There are also concerns over the present and future consequences of environmental degradation on development outcomes in sub-Saharan Africa (SSA). This study provides carbon dioxide (CO2) emissions thresholds that should be avoided in the nexus between financial development and income inequality in a panel of 39 countries in SSA over the period 2004-2014. Quantile regressions are used as an empirical strategy. The following findings are established. Financial development unconditionally decreases income inequality with an increasing negative magnitude while the interactions between financial development and CO2 emissions have the opposite effect with an increasing positive magnitude. The underlying nexuses are significant exclusively in the median and top quantiles of the income inequality distribution. CO2 emission thresholds that should not be exceeded in order for financial development to continuously reduce income inequality are 0.222, 0.200 and 0.166 metric tons per capita for the median, 75th quantile and 90th quantile of the income inequality distribution, respectively. Policy implications are discussed with particular relevance to Sustainable Development Goals (SDGs). |
| Keywords: | Renewable energy; Inequality; Finance; Sub-Saharan Africa; Sustainable development |
| JEL: | H10 Q20 Q30 O11 O55 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:abh:wpaper:20/030&r=all |
| By: | Gordon W. Leslie (Department of Economics, Monash University); David I. Stern (Arndt-Corden Department of Economics, Crawford School of Public Policy); Akshay Shanker (School of Economics, University of New South Wales); Michael T. Hogan (The Regulatory Assistance Project) |
| Abstract: | This article explores key market design issues to be addressed in future electricity markets dominated by intermittent renewable generation with near zero private marginal costs for generating electricity. Changing technology mixes will change market outcomes, but they do not change the fundamental economic principles behind market design. Market-clearing prices in such a market are not necessarily mostly zero even in an energy-only market, especially with grid scale storage, an active demand side of the market, and scarcity pricing. However, increasing intermittent generator penetration increases the importance for adequately pricing scarcity and all network constraints and services. Such pricing is required to deliver investment incentives for the right technologies to locate at the right locations to efficiently maintain a stable and reliable electrical network. |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:2002&r=all |
| By: | Jorrit Gosens (Crawford School of Public Policy, Australian National University) |
| Abstract: | Much hope has been placed on China’s decisions regarding low-carbon stimulus following COVID-19. Analysis of China’s recent Government Work Report suggests that while a repeat of recovery measures focused on high-emissions infrastructure following the 2008 global recession is not in the cards, a Chinese Green New Deal is not in sight either. Much investment is flowing to fossil fuel industries, whilst support policies for renewable energy industries are absent from Beijing’s recovery program. These signs of environmental ambition taking a back seat are worrisome given that Beijing is currently designing its 14th Five-Year Plan. |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:2006&r=all |
| By: | Erik P. Johnson; Juan Moreno-Cruz |
| Abstract: | Electricity transmission redistributes environmental impacts across space. We exploit episodes of high electricity transmission system congestion to explore changes in ambient concentrations of air pollutants in the eastern United States. Reducing electricity system congestion decreases ozone and PM2.5 concentrations in New England and New York and increases them in the western portions of the Pennsylvania-New Jersey-Maryland electricity market and much of the Midwestern states. We quantify the health impacts of changes in environmental pollution induced by a reduction in congestion and find overall health losses in central states such as Illinois, Indiana, and Ohio and health gains in Atlantic. |
| Keywords: | electricity congestion, air quality, electricity transmission, health impacts |
| JEL: | Q51 Q52 Q53 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8483&r=all |
| By: | Comincioli, Nicola; Vergalli, Sergio |
| Abstract: | Among the wide variety of policy options adopted worldwide to control carbon emissions, one of the most environmentally effective and economically efficient is represented by carbon tax, that aims to recoup the damage arising from polluting production processes. In this paper, we focus on the Australian Carbon Pricing Mechanism (CPM) and on the effects that its introduction had on the electricity market. The most relevant effect is the reduction of the level of electricity price’s volatility. This effect has been investigated after having removed, from electricity data time series, the periodic behavior, through a multiple linear regression. Then, to study volatility dynamics, we fit a two-states Markov-switching model to represent a high-volatility and a low-volatility states of the world. This model highlighted that in both states the level of volatility is lower and that the persistence of the second state is increased by the presence of the CPM. This result is particularly important in investment evaluation: knowing the different dynamics of price volatility in presence of a carbon tax or not, can provide crucial information in investment decision and its timing. |
| Keywords: | Environmental Economics and Policy |
| Date: | 2020–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:ags:feemgc:305205&r=all |
| By: | Pinchbeck, Edward W. (University of Birmingham); Roth, Sefi (London School of Economics); Szumilo, Nikodem (University College London); Vanino, Enrico (University of Sheffield) |
| Abstract: | This paper uses the housing market to examine the costs of indoor air pollution. We focus on radon, an indoor air pollutant which is the largest source of exposure to natural ionising radiation and the leading cause of lung cancer after smoking. To overcome potential confounders, we exploit a natural experiment whereby a risk map update in England induces exogenous variation in published radon risk levels. Using a repeat-sales approach, we find a significant negative relationship between changes in published radon risk levels and residential property prices of affected properties. Interestingly, we do not find that the effect of increasing or decreasing radon risk is symmetric. We also show that the update of the risk map led higher socio-economic groups (SEGs) to move away from radon affected areas, attracting lower SEG residents via lower prices. Finally, we propose and utilise a new theoretical framework to account for preference based sorting which allows us to calculate that the average willingness to pay to avoid radon risk is $3,360. |
| Keywords: | indoor air pollution, risk information, house prices, radon, neighbourhood sorting |
| JEL: | R21 R28 Q53 H23 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13655&r=all |
| By: | Rohan Best (Department of Economics, Macquarie University); Paul J Burke (Crawford School of Public Policy, Australian National University) |
| Abstract: | Energy mix persistence is a defining characteristic of energy systems, for reasons including the long-lived nature of energy infrastructure and the role of local endowments. This persistence is evident in current energy-type use being strongly influenced by past use. Our analysis uses data for eight energy types and a large sample of countries, finding varying degrees of energy mix persistence. We also find evidence that carbon pricing appears to have played a key role in tilting energy mixes from coal toward renewable energy. Our estimates provide empirical support to policymakers seeking to implement carbon pricing to transition their energy systems in a lower-carbon direction. |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:2001&r=all |
| By: | Hillary C. Ezeaku (Caritas University, Enugu, Nigeria); Simplice A. Asongu (Yaoundé, Cameroon) |
| Abstract: | The Covid-19 outbreak has led to extensive declines in international commodity prices. The outbreak as well as measures fashioned to contain it has been weighing down on global supply chains and commodity prices. The pandemic has been accompanied with unprecedented shock that has disrupted both the demand and supply of commodities. In view of the widespread global impact of Covid-19, this paper analyses the impact of the outbreak on global commodity prices with particular emphasis on the energy, agricultural and metals and materials sectors using international global prices and indices to trend the movements. In the wake of oil price war and dampened oil demand, the energy sector was the most hit with 15% average monthly decline in energy indices between December 2019 and April 2020. Oil recorded its largest one-month plunge on record in March. Movements in coal indices showed more resilience to the pandemic compared to crude oil and natural gas. Base metals were the most affected sector after energy with -3.49% average monthly changes in indices between December 2019 and April 2020. Of the major base metals and minerals, aluminum appears less affected by the outbreak compared to copper and zinc. In contrast, precious metals prices and indices remain stable and is the only commodity sector with positive monthly average change (1.99%) during the period. Gold prices maintained steady gains while silver and platinum prices followed a similar but weaker trend. The agricultural commodity indices largely maintained strong upward movement but plummeted at monthly average of 0.89% between December 2019 and April 2020. Grains and cereals proved more resilient to Covid-19 pandemic compared to timber, beverages, raw materials, and oils & meals. |
| Keywords: | Covid-9; Commodity Prices |
| JEL: | H12 I12 O10 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:abh:wpaper:20/040&r=all |
| By: | Liang, Yuanning; Rudik, Ivan (Cornell University); Zou, Eric; Johnston, Alison; Rodewald, Amanda; Kling, Catherine |
| Abstract: | Massive wildlife losses over the past 50 years have brought new urgency to identifying both the drivers of population decline and potential solutions. We provide the first large-scale evidence that air pollution, specifically ozone, is associated with declines in bird abundance in the United States. We show that an air pollution regulation limiting ozone precursors emissions has delivered substantial benefits to bird conservation. Our results imply that air quality improvements over the past four decades have stemmed the decline in bird populations, averting the loss of 1.5 billion birds, approximately 20 percent of current totals. Our results highlight that in addition to protecting human health, air pollution regulations have previously unrecognized and unquantified conservation co-benefits. |
| Date: | 2020–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:74ujt&r=all |
| By: | Elie Bouri (Adnan Kassar School of Business, Lebanese American University, Lebanon); Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, 0002, South Africa); Clement Kweku Kyei (Department of Economics, University of Pretoria, Pretoria, 0002, South Africa); Sowmya Subramaniam (Indian Institute of Management Lucknow, Prabandh Nagar off Sitapur Road, Lucknow, Uttar Pradesh 226013, India) |
| Abstract: | Using daily data from 3rd January, 2001 to 17th July, 2020, we analyse the impact of oil market uncertainty, computed based on realized volatility of 5-minute intraday oil returns, on the level, slope and curvature factors derived from the term structure of interest rates of the United States (US) covering maturities of 1 to 30 years. The results of the linear Granger causality tests detect no evidence of predictability of oil uncertainty on the three latent factors. However, evidence of nonlinearity and structural breaks indicates misspecification of the linear model. Accordingly, we use a data-driven approach, the nonparametric causality in-quantiles test, which is robust to misspecification due to nonlinearity and regime change. Notably, this test allows us to model the entire conditional distribution of the level, slope and curvature factors, and hence accommodate, via the lower quantiles, the zero lower bound situation observed in our sample period. Using this robust test, we find overwhelming evidence of causality from oil uncertainty for the entire conditional distribution of the three factors, suggesting the predictability of the entire US term structure based on information contained in oil market volatility. Our results have important implications for academics, investors and policymakers. |
| Keywords: | US Term Structure of Interest Rates, Yield Curve Factors, Oil Market Uncertainty, Causality-in-Quantiles Test |
| JEL: | C22 C32 E43 Q41 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:202085&r=all |
| By: | Simplice A. Asongu (Yaounde, Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa) |
| Abstract: | This study assesses how globalisation modulates the effect of environmental degradation on inclusive human development in 44 countries in Sub-Saharan Africa (SSA), using data for the period 2000 to 2012. The empirical results are based on the Generalized Method of Moments (GMM). The following main findings are established. First, a trade openness (imports + exports) threshold of between 80-120% of GDP is the maximum level required for trade openness to effectively modulate CO2 emissions (metric tonnes per capita) and induce a positive effect on inclusive human development. Second, a minimum threshold required for trade openness to modulate CO2 intensity (kg per kg of oil-equivalent energy use) and induce a positive effect on inclusive human development is 200% of GDP. Third, there is a net positive effect on inclusive human development from the relevance of trade openness in modulating the effect of CO2 emissions per capita on inclusive human development and a negative net effect on inclusive human development from the importance of trade openness in moderating the effect of CO2 intensity on inclusive human development. |
| Keywords: | CO2 emissions; Economic development; Africa |
| JEL: | C52 O38 O40 O55 P37 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:abh:wpaper:20/015&r=all |
| By: | Henri-Louis Vedie |
| Abstract: | Le Royaume du Maroc, dépourvu de pétrole et de gaz, s'est tourné, dès 1960, vers les énergies renouvelables, privilégiant alors l'hydroélectricité et la construction de barrages. Pour autant, l'essentiel des centrales électriques du pays était et demeure alimenté en gazole ou en gaz, impactant lourdement sa balance des paiements. Depuis, la demande d'électricité n'a cessé de croitre, d'une part, du fait du développement du pays et, d'autre part, suite au recours à des désalinisateurs, fort consommateurs d'énergie électrique, pour répondre à des besoins en eau potable qui ne cessent, eux aussi, d'augmenter. Depuis 2009, à l'initiative du Roi Mohammed VI, les énergies renouvelables sont devenues un chantier de règne, avec l'objectif de représenter 42% de l'électricité produite, horizon 2020. Pour y parvenir, trois filières vont être mises à contribution, à part égale, de 14% : la filière hydroélectrique, la filière éolienne et la filière solaire. Cette étude montre que cet objectif devrait être atteint au prix d'investissements considérables, privilégiant les technologies de dernière génération. Et au-delà de ce succès statistique, c'est aussi l'apprentissage d'un savoir-faire, particulièrement dans le domaine solaire et éolien, que le Maroc va pouvoir exporter, et une réussite qui doit donner espoir aux économies émergeantes, dépourvues d'énergies fossiles, en quête de développement et développement durable. |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:ocp:ppaper:pb20-11&r=all |
| By: | Sina J. Ogede (Olabisi Onabanjo University, Ago-Iwoye, Nigeria); Emmanuel O. George (Olabisi Onabanjo University, Ago-Iwoye, Nigeria); Ibrahim A. Adekunle (Olabisi Onabanjo University, Ogun State, Nigeria) |
| Abstract: | A range of explanations had been offered for the apparent change in oil price-inflation relationship outcomes ranging from the possible use of alternate energy sources, change in the structure of output regarding fewer oil intensive sectors and the role of fiscal and monetary in the affected oil-exporting countries. These changes had drawn the attention of stakeholders, government and the society at large to the anecdotal relationship among oil price volatility, inflation, and output in Africa oil-exporting countries. This study leans empirical credence to the impact of oil price volatility on inflation and economic performance in the Africa oil-exporting countries from 1995 through 2017. We employed the Pool Mean Group estimation procedure with the inference drawn at a 5% level of significance. We found that oil price volatility had a negative and significant effect on inflation in Africa oil-exporting countries. The study concluded that oil price volatility had a substantial impact on inflation in the Africa oil-exporting countries. The study, therefore, recommended that Africa oil-exporting countries should adopt precautionary measures to monitor inflation potentials due to different responses of inflation to positive and negative oil price shocks. |
| Keywords: | Oil Price Volatility; Inflation; Growth Outcomes; Pool Mean Group; Africa |
| JEL: | C33 O55 Q41 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:abh:wpaper:20/020&r=all |
| By: | Matthew E. Kahn; Weizeng Sun; Siqi Zheng |
| Abstract: | The surprise economic shutdown due to COVID-19 caused a sharp improvement in urban air quality in many previously heavily polluted Chinese cities. If clean air is a valued experience good, then this short-term reduction in pollution in spring 2020 could have persistent medium-term effects on reducing urban pollution levels as cities adopt new “blue sky” regulations to maintain recent pollution progress. We document that China’s cross-city Environmental Kuznets Curve shifts as a function of a city’s demand for clean air. We rank 144 cities in China based on their population’s baseline sensitivity to air pollution and with respect to their recent air pollution gains due to the COVID shutdown. The largest experience good effect should take place for cities featuring a high pollution sensitive population and where air quality has sharply improved during the pandemic. The residents of these cities have increased their online discussions focused on environmental protection, and local officials are incorporating “green” industrial subsidies into post-COVID stimulus policies. |
| JEL: | Q52 Q53 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27790&r=all |
| By: | Donatella Baiardi (Dipartimento di Scienze Economiche ed Aziendali, University of Parma, Italy; Rimini Centre for Economic Analysis); Simona Scabrosetti (Dipartimento di Giurisprudenza, University of Pavia, Italy; Carlo F. Dondena Centre for Research on Social Dynamics and Public Policies, Università Bocconi, Italy) |
| Abstract: | We empirically investigate the existence of the Environmental Kuznets Curve (EKC) focusing on a sample of 39 countries in the period 1996-2014. Using an interaction model, we also analyze whether the effectiveness of environmental taxes in reducing CO2 emissions depends on the quality of political institutions. Our results show that the inverted U-shaped relationship between environmental stress and economic development holds independently of the quality of political institutions and environment related taxes. Moreover, an increase in the environmental tax revenue has the expected reducing effect on environmental degradation only in countries with more consolidated democratic institutions, higher civil society participation and less corrupt governments. Our findings also show that the effects on environmental stress of revenue neutral shifts to different tax sources depend not only on the quality of political institutions, but also on the kind of externality the policymaker aims at correcting. |
| Keywords: | Environmental tax revenue, Environmental tax mix, Environmental Kuznets Curve, CO2 emissions |
| JEL: | H23 P16 Q50 Q53 Q38 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:20-25&r=all |
| By: | Curtis, John; Angel Tovar, Miguel; Grilli, Gianluca |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:rb202016&r=all |
| By: | Solomon P. Nathaniel (University of Lagos, Akoka, Nigeria); Festus V. Bekun (Istanbul Gelisim University, Istanbul, Turkey) |
| Abstract: | The study explores the link between electricity consumption, urbanization and economic growth in Nigeria from 1971-2014. The bounds test and the Bayer and Hanck (2013) cointegration tests affirm cointegrating relationship. Electricity consumption increases economic growth in both time periods, while the impact of urbanization appears to inhibit growth. The fully modified OLS (FMOLS), dynamic OLS (DOLS) and the canonical cointegrating regression (CCR) confirm the robustness of the findings. The vector error correction model (VECM) Granger causality test supports the neutrality hypothesis in the short run and the feedback hypothesis among the variables in the long run. Therefore, policies to ensure efficient electricity supply, curb rapid urbanization and promote sustainable economic growth were suggested. |
| Keywords: | Electricity Consumption; Urbanization; Economic Growth;ARDL; Nigeria. |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:abh:wpaper:20/013&r=all |
| By: | J.A. Bohlmann (African Tax Institute, University of Pretoria, South Africa); Roula Inglesi-Lotz (Department of Economics, University of Pretoria, South Africa) |
| Abstract: | For the period 1975-2016, this paper examines the determinants of the residential demand for electricity in South Africa including disposable income, electricity prices, food prices as well as the impact of the 2007/08 load-shedding wave and the 2008 electricity price restructuring. Given the high income inequality levels in South Africa, this relationship was investigated at aggregated and disaggregated income levels. Based on an Autoregressive Distributed Lag (ARDL) model, the empirical results indicate long-run cointegration between residential electricity consumption, gross national disposable income, electricity prices and food prices. Disposable income elasticities have a positive sign for the aggregate and all income groups, indicating that as income increases, South African households consume more electricity (normal good). As expected, price elasticities are negative and significant — for both the aggregated and disaggregated models — indicating that electricity prices do influence electricity demand for all South African households. The paper also examines the complementarity or substitutability of food and electricity. At both the aggregated and disaggregated income levels, the results showed that food and electricity are substitute goods for all South African households. However, as expected, the magnitude of this relationship is marginally different for each income group. |
| Keywords: | Residential Sector, price elasticity, income elasticity, ARDL, South Africa |
| JEL: | C13 C22 Q41 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:202081&r=all |
| By: | Frank Jotzo (Crawford School of Public Policy, Australian National University); Thomas Longden (Crawford School of Public Policy, Australian National University); Zeba Anjum (Crawford School of Public Policy, Australian National University) |
| Abstract: | To counteract the recession caused by the measures to contain the coronavirus (COVID-19) pandemic, governments are implementing fiscal stimulus measures for economic recovery. In addition to keeping people in jobs and businesses afloat, public investment can improve productivity and economic growth prospects, resilience and quality of life for the long term. Importantly, it can also help achieve long-term low-carbon trajectories, especially where new stimulus spending goes to infrastructure projects. This paper takes stock of approaches for evaluating and choosing options for public investment in projects and programs that support economic recovery, are consistent with a low-carbon transition, and bring broader economic, environmental and social benefits. We develop a multi-criteria analysis framework and illustratively apply this to infrastructure projects and programs in Australia that have previously been designated as priorities. Promising categories for public stimulus include renewable energy supply including by fast-tracking renewable energy zones and transmission investment, some types of transport infrastructure projects, energy efficiency programs including retrofits of public housing and buildings, and land management projects including to restore ecosystems that were damaged in Australia’s bushfires. Investments like these hold promise to create jobs and local economic activity, while supporting lower-carbon outcomes and achieving other societal goals. Comprehensive evaluation of public investment options along a clear set of criteria can help improve decision making on public infrastructure investments, and transparency about public policy objectives may also inspire greater public confidence in how governments make funding decisions in COVID-19 recovery. |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:2005&r=all |
| By: | Robert K. Perrons; Adam B. Jaffe; Trinh Le |
| Abstract: | The challenge of mitigating climate change has focused recent attention on basic scientific research feeding into the development of new energy technologies (Popp, 2017). Energy innovation tends to consist of a series of partially overlapping processes involving: (1) the production of scientific and technological knowledge, (2) the translation of that knowledge into working technologies or artifacts, and (3) the introduction of the artifacts into the marketplace, where they are matched with users’ requirements. However, relatively little data are available showing how long each of these processes takes for energy technologies. Here we combine information from patent applications with bibliographic data to shine light on the second process—that is, the translation of scientific knowledge into working prototypes. Our results show that “clean” energy technologies are more dependent on underlying science than “dirty” technologies, and that the average lag between publication of scientific findings and the incorporation of those findings in clean energy patents has risen from about five to about eight years since the 1980s. These findings will help policymakers to devise more effective mechanisms and strategies for accelerating the overall rate of technological change in this domain. |
| JEL: | O13 O31 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27777&r=all |
| By: | Schmidt, Ulrich |
| Abstract: | In einer Studie hat das Umweltbundesamt (UBA) die Konsequenzen eines Tempolimits auf Autobahnen für die Treibhausgasemissionen im deutschen Verkehrssektor berechnet. Dabei wurde gezeigt, dass ein generelles Tempolimit von 130 km/h die Emissionen um 1,9 Mio. t CO2-Äquivalente pro Jahr reduzieren würde. Für Tempolimits von 120 und 100 km/h ergäben sich entsprechend 2,6 und 5,4 Mio. t. Das UBA schließt daraus, dass ein generelles Tempolimit "ohne nennenswerte Mehrkosten" zu den Klimaschutzzielen im Verkehrssektor beitragen kann. Der Autor zeigt hingegen, dass die mit den niedrigeren Geschwindigkeiten einhergehenden längeren Fahrzeiten zu erheblichen Mehrkosten führen. Werden diese näherungsweise berücksichtigt, ergeben sich für die vom UBA betrachteten Tempolimits Vermeidungskosten zwischen 716 und 1.382 EUR je t CO2-Äquivalent, was verglichen mit alternativen Klimaschutzmaßnahmen hoch ist. Selbst wenn man die mögliche Reduktion der Verkehrstoten berücksichtigt, führen generelle Tempolimits zwischen 100 und 130 km/h zu Wohlfahrtverlusten. Der Autor empfiehlt, dass die Verkehrspolitik Maßnahmen priorisieren sollte, bei denen Ökonomie und Klimaschutz im Einklang stehen, wie es bei einem einheitlichen CO2-Preis, variablen Tempolimits sowie zeit- und ortsabhängigen Straßennutzungsgebühren der Fall wäre. |
| Keywords: | Tempolimit,Treibhausgasemissionen,Verkehrstote,Kosten-Nutzen Analyse,Speed Limit,Carbon Emissions,Traffic Fatalities,Cost-Benefit Analysis |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkpb:145&r=all |
| By: | Davide Pace (University of Amsterdam); Joël van der Weele (University of Amsterdam) |
| Abstract: | We investigate how consumers respond to uncertainty about CO2 emission size. In an incentivized online experiment, participants can acquire a valuable good that emits an unknown amount of CO2. We find that beliefs about emission size are strongly predictive of purchases, even exceeding the effect of substantial changes in the price of the good. Moreover, information that makes beliefs more precise causes a 26% reduction in overall emissions, even though average beliefs are unchanged. The reduction occurs as the marginal willingness to pay for emission reduction declines with emission size, so people who are too optimistic about emissions are more responsive to information. We also test for the formation of self-serving beliefs. Contrary to theories of motivated reasoning, increasing the surplus from buying the product does not change patterns of attention or belief formation about emissions. Overall, the results suggest that information about CO2 impact can be an important policy lever, and that willingness-to-pay for emission reductions should take into account the size of emissions. |
| Keywords: | CO2 emissions, sustainable consumption, economic experiments |
| JEL: | Q54 C91 D81 |
| Date: | 2020–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20200059&r=all |
| By: | Dang, Hai-Anh (World Bank); Trinh, Trong-Anh (World Bank) |
| Abstract: | Little evidence currently exists on the effects of COVID-19 on air quality in poorer countries, where most air pollution-linked deaths occur. We offer the first study that examines the pandemic's impacts on improving air quality in Vietnam, a lower-middle income country with worsening air pollution. Employing the Regression Discontinuity Design method to analyze a rich database that we compile from satellite air pollution data and data from various other sources, we find the concentration of NO2 to decrease by 24 to 32 percent two weeks after the COVID-19 lockdown. While this finding is robust to different measures of air quality and model specifications, the positive effects of the lockdown appear to dissipate after ten weeks. We also find that mobility restrictions are a potential channel for improved air quality. Finally, our back-of-the-envelope calculations suggest that two weeks after the lockdown, the economic gains from better air quality are roughly $0.6 billion US dollars. |
| Keywords: | COVID-19, air pollution, mobility restriction, RDD, Vietnam |
| JEL: | D00 H00 O13 Q50 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13651&r=all |
| By: | Udi Joshua (Federal University Lokoja, Kogi state, Nigeria); Festus V. Bekun (Istanbul Gelisim University, Istanbul, Turkey); Samuel A. Sarkodie (Nord University Business School (HHN), Bodø, Norwa) |
| Abstract: | This study examines the relationship between foreign direct investment inflows and economic growth by incorporating the role of urbanization, coal consumption and CO2 emissions as additional variables to avoid omitted variable bias. The different order of integration from the unit root test suggested the adoption of a dynamic autoregressive distributed lag bounds testing procedure. The results confirmed the existence of a long-run equilibrium relationship between the outlined series within the period under investigation with a high speed of convergence. The ARDL equilibrium relationship shows that coal consumption is the largest emitter of carbon dioxide emissions in both short- (0.77%) and long- (0.86%) run. Economic growth was found to escalate CO2 emission by approximately 0.27% (in the short-run) and 0.19% (in the long-run). The Granger causality test indicates a non-causal effect between FDI inflow and economic expansion in South Africa, which implies that FDI is not a driver of economic advancement. The empirical study shows a bidirectional causal effect between urbanization and foreign direct investment. This suggests that urban development stimulates foreign direct investment in South Africa. The findings reveal a one-way link from GDP to coal consumption, suggesting economic prosperity promotes coal consumption. The study underscores that economic development and the attraction of more economic investments is in part, dependent on the conservative policy, development of urban centres through infrastructural improvement, and establishing industrial zones. |
| Keywords: | South Africa; coal consumption; CO2 emissions; climate change; urbanization |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:abh:wpaper:20/011&r=all |
| By: | J. Anthony Cookson; Erik P. Gilje; Rawley Z. Heimer |
| Abstract: | How do persistent cash flow shocks affect debt repayment across the distribution of households? Using individual data on natural gas shale royalty payments matched with credit bureau data for 215,639 consumers, we estimate that individuals repay 33 cents of debt per dollar of windfall, and that initially-subprime individuals repay approximately 5 times more debt than initially-prime individuals do. This difference in debt repayment is driven by changes to revolving debt balances. Finally, we show that debt repayment precedes durable goods consumption, particularly for households who were initially financially constrained. These results shed new light on how deleveraging affects household consumption. |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27782&r=all |
| By: | Lutz Kilian; Xiaoqing Zhou |
| Abstract: | The conventional wisdom that inflation expectations respond to the level of the price of oil (or the price of gasoline) is based on testing the null hypothesis of a zero slope coefficient in a static single-equation regression model fit to aggregate data. Given that the regressor in this model is not stationary, the null distribution of the t-test statistic is nonstandard, invalidating the use of the normal approximation. Once the critical values are adjusted, these regressions provide no support for the conventional wisdom. Using a new structural vector regression model, however, we demonstrate that gasoline price shocks may indeed drive one-year household inflation expectations. The model shows that there have been several such episodes since 1990. In particular, the rise in household inflation expectations between 2009 and 2013 is almost entirely explained by a large increase in gasoline prices. However, on average, gasoline price shocks account for only 39% of the variation in household inflation expectations since 1981. |
| Keywords: | inflation, expectations, anchor, missing disinflation, oil price, gasoline price, household survey |
| JEL: | E31 E52 Q43 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8516&r=all |
| By: | Bernal-Ramirez, Joaquin; Ocampo, José Antonio |
| Abstract: | It is increasingly recognized that climate change generates major macroeconomic and financial risks. There are physical risks associated to the disasters generated by hydrometeorological events and to gradual but persistent changes in temperatures that have structural impacts on economic activity, productivity and incomes. Additionally, the process of adjustment towards a lower-carbon economy, prompted by changes in climate-related policies, technological disruptions and changes in consumer preferences, generates transition risks. After a brief analysis of the macroeconomic, fiscal and tax policies to manage these risks, this paper concentrates on: (i) how financial policies can help improve transparency and climate-related risk disclosure in financial institutions’ balance sheets and assets prices,particularly with appropriate prudential regulation and supervision; and (ii) how those risks could be taken into account in monetary policy and central banks’ balance sheets and operations. The paper ends with some reflections on the Covid-19 pandemic and the will for a “green” recovery. |
| Keywords: | climate change; carbon tax; financial policy; monetary policy; central banks |
| JEL: | E50 G18 H23 Q54 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:rie:riecdt:63&r=all |
| By: | Huang, Zeying; Skidmore, Mark; Lim, Jungmin |
| Keywords: | Resource/Energy Economics and Policy, Risk and Uncertainty |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea20:304422&r=all |
| By: | Nguyen, V.C.; Thanh, Hai Phan; Nguyen, Thu Thuy |
| Abstract: | Nowadays, environmental pollution has become a global problem and common to both developed and developing countries. The purpose of this study is to analyze the environmental pollution during the period from 1990 to 2014 in order to discuss the most important factors can effect environmental quality in a specific region in Asia. Using a panel data, in particular generalized least squares model for the sample with T large, N small examined by Pesaran (2006), Sickles and Horrace (2014), our results that a less developed country has a lower level of environmental pollution than a more developed country. More specifically, countries such as Singapore, Malaysia, Thailand, Indonesia, Philippines, and Vietnam have a positive and significant effect on environmental degradation, but no effect for Myanmar. In regard to environmental quality across year, environmental pollution has become even more urgent over time. Specifically, a negative and significant effect can be found in the period from 2005 to 2014 but insignificant effect in the period from 1991 to 2004, and the magnitude of effect has increasingly increased. Further, electricity consumption and income have a positive and significant effect on environmental pollution. However, although export performance has a negative effect on environmental pollution but this effect was insignificant. |
| Date: | 2020–08–09 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:bq2h7&r=all |
| By: | Robert I. Harris; William A. Pizer |
| Abstract: | A sizeable number of papers beginning with Roberts and Spence (1976) have studied the use of price floors and ceilings (or “collars”) to manage prices in tradable permit markets. In contrast, economists have only recently begun examining polices to manage quantities under a pollution tax. Importantly, it can be difficult to know how to evaluate these policies, as papers dating back to Pizer (2002) suggest welfare is maximized by not focusing on quantities in the first place. In this paper, we propose an objective function to evaluate these alternative “carbon tax policies to meet an emission target.” The objective function includes a discrete jump in marginal emission consequences at the target, where the discontinuity can be interpreted as a true benefit measure or a necessary political constraint. We parameterize these emission consequences using recent legislative proposals, coupling this function with mitigation cost estimates to define the complete objective. This objective identifies the first-best tax policy design, one that requires relatively complex adjustments to mimic a tradable permit system. Turning to simpler, practical rules, we find that such rules achieve much of the difference in expected net benefits between an ordinary, exogenous tax and the first-best tax policy design. However, the ranking among simple rules depends on the interpretation of the higher, above-target emission penalty as a political constraint or a true benefit measure. We find that making these views explicit could facilitate billions of dollars per year in welfare gains. |
| JEL: | H23 Q54 Q58 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27781&r=all |
| By: | Christoph Buehren (Clausthal University of Technology); Maria Daskalakis (University of Kassel) |
| Abstract: | Which behavioral interventions are more appropriate to induce energy saving: energy saving goals with or without monetary incentives, environmentally related information, social comparison, or a competition to save energy? We try to answer this question in a comprehensive study. First, we designed energy bills with different behavioral interventions. Second, we evaluated their appropriateness in an empirical survey with 457 participants. Third, we tested behavioral consequences in a “real effort†lab experiment with 550 subjects in 11 treatments and one baseline. Finally, we tested two interventions in a small field experiment with 36 test-households. Our results indicate that monetary incentives to save energy foster the intention to invest effort in energy saving but may backfire if real effort is required. Instead, self-set goals – without monetary incentives – and providing social comparison induced substantial effort in our lab experiment. Extending the social comparison to a competition – without monetary incentives – provided the best results. In our field experiment, however, we find no support that goals and social comparison change every-day behavior in energy consumption. Our study concludes with implications for practical policy design and possible future research. |
| Keywords: | Energy-saving; Goals; Social Comparison; Competition; Real effort experiment |
| JEL: | D03 D12 C91 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:202042&r=all |
| By: | Michael Bates (Department of Economics, University of California Riverside); Seolah Kim |
| Abstract: | We propose a per-cluster instrumental variables approach (PCIV) for estimating correlated random coefficient models in the presence of endogeneity. This approach estimates heterogeneous effects, which may be aggregated to the population level. We demonstrate consistency, showing robustness over standard estimators, and provide analytic standard errors for robust inference. We compare PCIV, fixed-effects instrumental variables, and pooled 2SLS estimators using Monte Carlo simulation, verifying that PCIV performs relatively well. We apply PCIV in estimating the responsiveness of gasoline consumption to prices, as instrumented by state fuel taxes. In general, we find more elastic gasoline demand in the US than the current literature imply. |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:ucr:wpaper:202021&r=all |
| By: | Heigermoser, Maximilian; Glauben, Thomas |
| Abstract: | The shutdown measures implemented to fight the Covid-19 pandemic resulted in a historic drop in crude oil prices, which implies existential challenges to countries depending on energy exports. The three largest crude oil exporters in Africa (Algeria, Angola and Nigeria) are - like numerous other raw material exporters worldwide - facing devaluing currencies and dwindling currency reserves. As food security in these states largely depends on imports of wheat and rice, domestic food prices are expected to rise due to the currency depreciation. This puts further pressure on populations with already low incomes, while local shutdowns and reduced economic activity lead to additional income losses. Recent panic buying and (temporary) export restrictions on international grain markets further exacerbate the situation. Not least due to currently ample grain stocks, such measures are not to be recommended. Instead, solidarity amongst nations, taking the form of emergency aid such as debt relief, food deliveries and medical aid, is required more urgently than ever. Furthermore, it is advisable to ease bureaucratic and tariff trade barriers to facilitate international trade. Demands for greater autarchy and de-globalisation should be avoided in the current precarious situation. |
| Keywords: | Food Security and Poverty, International Relations/Trade |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iamopb:305470&r=all |
| By: | Alexandre Pavlov; Charles Vaillancourt; Michel Poitevin |
| Abstract: | La première partie de ce rapport utilise les versions les plus récentes des modèles DICE, FUND et PAGE ainsi que cinq scénarios socioéconomiques nouvellement conçus pour estimer le coût social du carbone en 2020 à 107,79$CA2018, précédemment évalué à 48,50$CA2018 par le groupe de travail canadien interministériel sur le coût social des gaz à effet de serre. La deuxième partie de ce rapport présente une revue de littérature sur les élasticités-prix dans le domaine des transports, avec un intérêt particulier pour celles de l’essence et des transports publics. La revue de la littérature est suivie d’une section empirique dans laquelle un modèle inspirée des travaux présentés plus tôt estime l’élasticité-prix de l’essence au Québec entre -0,113 et -0,125. |
| Keywords: | , Réduction,Émission,Prix optimal,Élasticité-prix |
| Date: | 2020–08–31 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirpro:2020rp-20&r=all |
| By: | Harker Steele, Amanda J.; Bergstrom, John C. |
| Keywords: | Labor and Human Capital, Agricultural and Food Policy, Resource/Energy Economics and Policy |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea20:304342&r=all |
| By: | Coker, Eric; Cavalli, Laura; Fabrizi, Enrico; Guastella, Gianni; Lippo, Enrico; Parisi, Maria Laura; Pontarollo, Nicola; Rizzati, Massimiliano; Varacca, Alessandro; Vergalli, Sergio |
| Abstract: | Long-term exposure to ambient air pollutant concentrations is known to cause chronic lung inflammation, a condition that may promote increased severity of COVID-19 syndrome caused by the novel coronavirus (SARS-CoV-2). In this paper, we empirically investigate the ecologic association between long-term concentrations of area-level fine particulate matter (PM2.5) and excess deaths in the first quarter of 2020 in municipalities of Northern Italy. The study accounts for potentially spatial confounding factors related to urbanization that may have influenced the spreading of SARS-CoV-2 and related COVID-19 mortality. Our epidemiological analysis uses geographical information (e.g., municipalities) and negative binomial regression to assess whether both ambient PM2.5 concentration and excess mortality have a similar spatial distribution. Our analysis suggests a positive association of ambient PM2.5 concentration on excess mortality in Northern Italy related to the COVID-19 epidemic. Our estimates suggest that a one-unit increase in PM2.5 concentration (μg/m3) is associated with a 9% (95% confidence interval: 6% - 12%) increase in COVID-19 related mortality. |
| Keywords: | Health Economics and Policy |
| Date: | 2020–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:ags:feemgc:305209&r=all |
| By: | Štěpán Mikula; Mariola Pytliková |
| Abstract: | This paper from Štěpán Mikula (Masaryk University) and Mariola Pytliková (EconPol Europe, CERGE-EI) examines causal effects of air pollution on migration by exploiting a unique natural experiment of desulfurization of power plants in the region of North Bohemia in the Czech Republic after the fall of communism in 1989. They find that anti-emigration policies had no impact on emigration decisions, but the effect of air pollution on emigration tended to be stronger in municipalities with weaker social capital and in municipalities less equipped with man-made amenities. These results suggest that strengthening social capital, investing into better facilities in the area of education, health and social care, and promoting sport and cultural activities can partially mitigate the migratory response to air pollution. |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:econwp:_43&r=all |
| By: | Stevens, Jeremiah H.; Taheripour, Farzad |
| Keywords: | Production Economics, Productivity Analysis, Agricultural and Food Policy |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea20:304524&r=all |
| By: | Refk Selmi (ESC Pau); Jamal Bouoiyour (CATT - Centre d'Analyse Théorique et de Traitement des données économiques - UPPA - Université de Pau et des Pays de l'Adour); Shawkat Hammoudeh (Bennett S. LeBow College of Business - Department of Economics and International Business - Drexel University) |
| Abstract: | In the wake of recent political developments around the world, the prospects of future oil supplies have become doubtful and the uncertainty has come to play a non-negligible role in determining the dynamics of major macroeconomic variables. This study carries out a factor model with time-varying loadings to decompose the variance of a set of important macroeconomic and financial series for the top ten oil-producing countries into contributions from country-specific uncertainty and common uncertainty. The relative importance of the uncertainty estimates in explaining the volatility of production, investment, total exports, exchange rate and stock prices seems to differ over time, with evidence of alternating periods of high and low persistent uncertainties. The global uncertainty plays the primary role for output growth, investment, exports and stock prices in all countries. The globalization and trade openness contribute in amplifying the international transmission of volatility, explaining therefore the increasing importance of the global uncertainty factor. |
| Keywords: | Common uncertainty,country-specific uncertainty,top ten oil-producing countries,dynamic factor model |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02929898&r=all |
| By: | Zangari del Balzo, Gianluigi |
| Abstract: | In the past few days, the global scientific community has made much progress in research for the COVID-19 pandemic, but the new SARS-CoV-2 coronavirus has not yet been correctly characterized thermodynamically and much is still unknown. In particular, the current SARS-CoV-2 models lack the characterization of the virus system within its environment. This is a serious systematic error, which stands in the way of impeding research into the pandemic. In the present work, therefore, we consider the SARS-CoV-2 system with its environment, and we give a correct thermodynamic definition, through analysis and simulations, from air transport to cellular entry through the mechanism of receptor- mediated endocytosis. In studying the aerosol environment of the SARS-CoV-2 virus, we cannot omit the presence of nanoparticles or dust. Therefore, analyzing and comparing the air environments in China and Italy, we note that the Chinese and Italian regions which were at the beginning the most affected by the pandemic are also the most polluted. The same phenomenon is happening today for the United States and Brazil. We therefore propose an energy landscape theory of synergistic complexes of SARS- CoV-2 with particulate matter (PM). This could explain the optimized strategy of deep penetration of interstitial lung cells and the rapid spread of the pandemic in the most polluted areas of the planet. It could also explain the severity and difficulty of treating the forms of interstitial pneumonia occurred in Italy and worldwide. The energy landscape theory of complexes of SARS-CoV-2 with particulate matter (PM), leads to crucial methodological constraints aimed at containing systematic errors in experimental laboratory procedures and in mathematical modeling, which can allow and accelerate the definition of the mechanism of action of the virus and therefore the realization of the appropriate therapies and health protocols. |
| Date: | 2020–03–20 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:qnws8&r=all |
| By: | Jeffrey D Sachs; Salim Abdool Karim; Lara Aknin; Joseph Allen; Kirsten Brosbol; Gabriela Cuevas Barron; Peter Daszak; MarÃÂa Fernanda Espinosa; Vitor Gaspar; Alejandro Gaviria; Andy Haines; Peter Hotez; Phoebe Koundouri; Jong-Koo Lee; Muhammad Pate; Paul Polman; Srinath Reddy; Ismail Serageldin; Raj Shah; John Thwaites; Vaira Vike-Freiberga; Chen Wang; Miriam Khamadi Were; Felipe Larrain Bascunan; Lan Xue; Min Zhu; Chandrika Bahadur; Maria Elena Bottazzi; Yanis Ben Amor; Lauren Barredo; Ozge Karadag Caman; Guillaume Lafortune; Emma Torres; Ismini Ethridge; Juliana G E Bartels |
| Abstract: | The Lancet COVID-19 Commission was launched on July 9, 2020, to assist governments, civil society, and UN institutions in responding effectively to the COVID-19 pandemic. The Commission aims to offer practical solutions to the four main global challenges posed by the pandemic: suppressing the pandemic by means of pharmaceutical and non-pharmaceutical interventions; overcoming humanitarian emergencies, including poverty, hunger, and mental distress, caused by the pandemic; restructuring public and private finances in the wake of the pandemic; and rebuilding the world economy in an inclusive, resilient, and sustainable way that is aligned with the Sustainable Development Goals (SDGs) and the Paris Climate Agreement. Many creative solutions are already being implemented, and a key aim of the Commission is to accelerate their adoption worldwide. |
| Date: | 2020–09–17 |
| URL: | http://d.repec.org/n?u=RePEc:aue:wpaper:2032&r=all |
| By: | Rim Berahab |
| Abstract: | Les pays africains riches en pétrole sont confrontés, à la fois au choc de la pandémie de Covid-19 et à l’effondrement des prix du pétrole, ce qui les expose à de nombreuses vulnérabilités. La situation est d’autant plus alarmante, vu que la plupart de ces pays ne se sont pas encore remis du choc pétrolier de 2014. Cette nouvelle crise aggrave, donc, une situation économique déjà difficile. Les termes de l’échange de ces pays risquent, ainsi, de se détériorer, entraînant une réduction des recettes d’exportation et une aggravation des déficits des comptes courants et du budget de l’Etat. En outre, suite au resserrement des conditions financières mondiales, les flux d’investissement vers ces pays risquent de se réduire, ce qui limite, ainsi, leur capacité à financer les dépenses nécessaires pour gérer la crise sanitaire et soutenir la croissance. Outre les conséquences budgétaires et monétaires, des reports de nombreux projets pétroliers peuvent conduire à une perte d’investissements importants. La réponse politique des pays pétroliers africains au Covid-19 doit nécessairement être différenciée par pays. Bien évidemment, la priorité demeure d’augmenter les dépenses afin de contenir la propagation du virus et d’utiliser les politiques budgétaires, monétaires et financières pour protéger les groupes vulnérables, atténuer les pertes économiques et soutenir la reprise. Mais, il faut adapter ces mesures de telle sorte à refléter, aussi bien les caractéristiques structurelles des économies africaines pétrolières que les contraintes particulières auxquelles elles sont confrontées. |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:ocp:ppaper:pb20-39&r=all |
| By: | Benjamin Augé |
| Abstract: | L'épidémie de coronavirus vient encore davantage affaiblir les économies du golfe de Guinée déjà particulièrement fragilisées par un secteur pétrolier localement en crise depuis plusieurs années. La rapide baisse des cours va mettre à nouveau à rude épreuve des systèmes qui ne parviennent pas à se réinventer et à se diversifier afin de se prémunir des travers souvent constatés au sein des Etats rentiers. Outre l'impact économique, ce sont également les potentielles difficultés d'ordres sécuritaire et politique que la crise du coronavirus risque de largement favoriser. |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:ocp:ppaper:pb20-15&r=all |