nep-ene New Economics Papers
on Energy Economics
Issue of 2021‒04‒19
34 papers chosen by
Roger Fouquet
London School of Economics

  1. ‘Clean’ hydrogen? An analysis of the emissions and costs of fossil fuel based versus renewable electricity based hydrogen By Thomas Longden; Fiona J. Beck; Frank Jotzo; Richard Andrews; Mousami Prasad
  2. The interplay between green policy, electricity prices, financial constraints and jobs: firm-level evidence By Bijnens, Gert; Hutchinson, John; Konings, Jozef; Saint-Guilhem, Arthur
  3. Does published research influence policy outcomes? The case of regulated electricity networks in western Europe By Söderberg, Magnus; Yang, Yingkui
  4. Forecasting Electricity Prices: Autoregressive Hybrid Nearest Neighbors (ARHNN) method By Weronika Nitka; Tomasz Serafin; Dimitrios Sotiros
  5. Application of Bagging in Day-Ahead Electricity Price Forecasting and Factor Augmentation By Kadir Özen; Dilem Yıldırım
  6. Carbon Policy and the Emissions Implications of Electric Vehicles By Kenneth Gillingham; Marten Ovaere; Stephanie Weber
  7. Income inequality and carbon consumption: evidence from Environmental Engel curves By Sager, Lutz
  8. Mitigation strategies to enhance the ambition of the nationally determined contributions : an analysis of 4 European countries with the decarbonization wedges methodology By Sandrine Mathy; P. Menanteau
  9. Migrants and boomtowns: micro evidence from the U.S. shale boom By Isha Rajbhandari; Alessandra Faggian; Mark Partridge
  10. Assessing the Potential Economic Gains of China-Pakistan-Economic-Corridor Energy Projects for Pakistan By Saddam Hussain; Chunjiao Yu; Ali Sohail; Sadaf Manzoor; Ao Li
  11. Uncertainty and Stock Returns in Energy Markets: A Quantile Regression Approach By Samir Cedic; Alwan Mahmoud; Matteo Manera; Gazi Salah Uddin
  12. Will the Centralisation of Carbon Pricing Revenue in the EU Lead to Laxer Climate Policy? By Clemens Fuest; Volker Meier
  13. Taxation of fuel and vehicles when emissions are constrained By Geir H. M. Bjertnæs
  14. Strategic Reserves versus Market-wide Capacity Mechanisms By Holmberg, P.; Tangerås, T.
  15. What can we Learn from the Free Destination Option in the LNG Imbroglio ? By Amina Baba; Anna Creti; Olivier Massol
  16. Lessons Learned from Photovoltaic Auctions in Germany By Taimyra Batz Li\~neiro; Felix M\"usgens
  17. Carbon Border Adjustment Mechanism (CBAM): Motivation, Ausgestaltung und wirtschaftliche Implikationen eines CO2-Grenzausgleichs in der EU By Kolev, Galina V.; Kube, Roland; Schaefer, Thilo; Stolle, Leon
  18. Unprecedented decarbonization of China's power system in the post-COVID era By Biqing Zhu; Rui Guo; Zhu Deng; Wenli Zhao; Piyu Ke; Xinyu Dou; Steven J. Davis; Philippe Ciais; Pierre Gentine; Zhu Liu
  19. The Inclusive Green Energy index of progress By Carmen Herrero; Jose' Pineda; Antonio Villar; Eduardo Zambrano
  20. A Simple Fix for Carbon Leakage? Assessing the Environmental Effectiveness of the EU Carbon Border Adjustment By George Mörsdorf
  21. Los incentivos a la sostenibilidad en el comercio internacional By Frohmann, Alicia; Mulder, Nanno; Olmos, Ximena
  22. Assessment of the air pollution tax and emission concentration limits in the Czech Republic By Richard Juřík; Nils Axel Braathen
  23. Policies for a climate-neutral industry: Lessons from the Netherlands By Brilé Anderson; Emile Cammeraat; Antoine Dechezleprêtre; Luisa Dressler; Nicolas Gonne; Guy Lalanne; Joaquim Martins Guilhoto; Konstantinos Theodoropoulos
  24. Information Diffusion and Spillover Dynamics in Renewable Energy Markets By Samir Cedic; Alwan Mahmoud; Matteo Manera; Gazi Salah Uddin
  25. Environmental policy and the CO2 emissions embodied in international trade By Koutchogna Kokou Edem ASSOGBAVI; Stéphane Dées
  26. WTO GPA and Sustainable Procurement as Tools for Transitioning to a Circular Economy By Sareesh Rawat
  27. The Sustainability of Alternative Last-Mile Delivery Strategies By Jaller, Miguel; Pahwa, Anmol
  28. On the detrimental effects of concave emission charges in a dynamic Cournot duopoly model By Ahmad Naimzada; Marina Pireddu
  29. Oil-US Stock Market Nexus: Some insights about the New Coronavirus Crisis By Claudiu Albulescu; Michel Mina; Cornel Oros
  30. Windows of opportunity for catching up in formative clean-tech sectors and the rise of China in concentrated solar power By Jorrit Gosens; Alina Gilmanova; Johan Lilliestam
  31. Option to survive or surrender: carbon asset management and optimization in thermal power enterprises from China By Yue Liu; Lixin Tian; Zhuyun Xie; Zaili Zhen; Huaping Sun
  32. Petroleum Industry's Economic Contribution to North Dakota in 2019 By Bangsund, Dean A.; Hodur, Nancy M.
  33. Controlling volatility of wind-solar power By Hans Lustfeld
  34. A CO2-border adjustment mechanism as a building block of a climate club By Bierbrauer, Felix; Felbermayr, Gabriel; Ockenfels, Axel; Schmidt, Klaus M.; Südekum, Jens

  1. By: Thomas Longden (Crawford School of Public Policy, Australian National University); Fiona J. Beck (Research School of Electrical, Energy and Materials Engineering, ANU); Frank Jotzo (Crawford School of Public Policy, Australian National University); Richard Andrews (Crawford School of Public Policy, Australian National University); Mousami Prasad (Crawford School of Public Policy, Australian National University)
    Abstract: Hydrogen produced using fossil fuel feed stocks causes greenhouse gas (GHG) emissions, even when carbon capture and storage (CCS) is used. By contrast, hydrogen produced using electrolysis and zero-emissions electricity does not create GHG emissions. Several countries advocating the use of ‘clean’ hydrogen put both technologies in the same category. Recent studies and strategies have compared these technologies, typically assuming high carbon capture rates, but have not assessed the impact of fugitive emissions and lower capture rates on total emissions and costs. We find that emissions from gas or coal based hydrogen production systems could be substantial even with CCS, and the cost of CCS is higher than often assumed. At the same time there are indications that electrolysis with renewable energy could become cheaper than fossil fuel with CCS options, possibly in the nearterm future. Establishing hydrogen supply chains on the basis of fossil fuels, as many national strategies foresee, may be incompatible with decarbonisation objectives and raise the risk of stranded assets.
    Date: 2021–03
  2. By: Bijnens, Gert; Hutchinson, John; Konings, Jozef; Saint-Guilhem, Arthur
    Abstract: Increased investment in clean electricity generation or the introduction of a carbon tax will most likely lead to higher electricity prices. We examine the effect from changing electricity prices on manufacturing employment. Analyzing firm-level data, we find that rising electricity prices lead to a negative impact on labor demand and investment in sectors most reliant on electricity as an input factor. Since these sectors are unevenly spread across countries and regions, the labor impact will also be unevenly spread with the highest impact in Southern Germany and Northern Italy. We also identify an additional channel that leads to heterogeneous responses. When electricity prices rise, financially constrained firms reduce employment more than less constrained firms. This implies a potentially mitigating role for monetary policy. JEL Classification: E52, H23, J23, Q48
    Keywords: employment, environmental regulation, labor demand, manufacturing industry, monetary policy
    Date: 2021–04
  3. By: Söderberg, Magnus (The Ratio Institute); Yang, Yingkui (University of Southern Denmark)
    Abstract: This study investigates the relationship between number of articles about electricity network regulation published in peer-reviewed journals and actual electricity network prices. Data on published articles are sourced from ScienceDirect and network prices are provided by Eurostat. Different empirical approaches give the same result, namely that an increase in the number of published articles reduces the regulated network price. When articles are highly relevant, one additional article published per year reduces the price by at least 10%. Results also show that the influence on prices is delayed and the effect lasts for a few years. A survey is sent out to regulators to better understand if the relationship can be interpreted as causal. Responses reveal that regulators do access and incorporate relevant research into their work. Considering the cost required to continuously publish relevant articles, research seems to be a highly effective complement to more traditional regulatory work.
    Keywords: regulation; electricity; research
    JEL: D04 D42 L94
    Date: 2021–04–07
  4. By: Weronika Nitka; Tomasz Serafin; Dimitrios Sotiros
    Abstract: The ongoing reshape of electricity markets has significantly stimulated electricity trading. Limitations in storing electricity as well as on-the-fly changes in demand and supply dynamics, have led price forecasts to be a fundamental aspect of traders' economic stability and growth. In this perspective, there is a broad literature that focuses on developing methods and techniques to forecast electricity prices. In this paper, we develop a new hybrid method, called ARHNN, for electricity price forecasting (EPF) in day-ahead markets. A well performing autoregressive model, with exogenous variables, is the main forecasting instrument in our method. Contrarily to the traditional statistical approaches, in which the calibration sample consists of the most recent and successive observations, we employ the k-nearest neighbors (k-NN) instance-based learning algorithm and we select the calibration sample based on a similarity (distance) measure over a subset of the autoregressive model's variables. The optimal levels of the k-NN parameter are identified during the validation period in a way that the forecasting error is minimized. We apply our method in the EPEX SPOT market in Germany. The results reveal a significant improvement in accuracy compared to commonly used approaches.
    Keywords: Electricity price forecasting; Day-ahead market; ARX; k-nearest neighbors
    JEL: C22 C32 C51 C53 Q41 Q47
    Date: 2021–04–10
  5. By: Kadir Özen (Barcelona Graduate School of Economics, Barcelona, Spain); Dilem Yıldırım (Department of Economics, Middle East Technical University, Ankara, Turkey)
    Abstract: The electricity price forecasting (EPF) is a challenging task not only because of the uncommon characteristics of electricity but also because of the existence of many potential predictors with changing predictive abilities over time. Particularly, how to account for all available factors and extract as much information as possible is the key to the production of accurate forecasts. To address this long-standing issue in a way that balances complexity and forecasting accuracy while facilitating the traceability of the predictor selection procedure, the method of Bootstrap Aggregation (bagging), which is a variant shrinkage estimation approach for the estimation of large scale models, is proposed in this paper. To forecast day-ahead electricity prices in a multivariate context for six major power markets we construct a large scale pure-price model (in addition to some stochastic models that are commonly applied in the literature) and apply the bagging approach in comparison with the popular Least Absolute Shrinkage and Selection Operator (LASSO) estimation method. Our forecasting study reveals that with its superior forecasting performance and its computationally simple algorithm, the bagging emerges as a strong competitor to the commonly applied LASSO approach for the short-term EPF. Further analysis for the variable selection for the bagging and LASSO approaches suggests that the differentiation in the forecast performances of two approaches might be due to, inter alia, their structural differences in the explanatory variables selection process. Moreover, to account for the intraday hourly dependencies of day-ahead electricity prices, all our models are augmented with latent factors, and a substantial improvement is observed only in the forecasts from models covering a relatively limited number of predictors, while almost no improvement is obtained in the forecasts from the large scale model estimated through LASSO and bagging techniques.
    Keywords: Bagging, Shrinkage methods, Electricity price forecasting, Multivariate modeling, Forecast encompassing, Factor models
    JEL: C22 C38 C51 C53 Q47
    Date: 2021–04
  6. By: Kenneth Gillingham; Marten Ovaere; Stephanie Weber
    Abstract: Creativity is often highly concentrated in time and space, and across different domains. What explains the formation and decay of clusters of creativity? We match data on notable individuals born in Europe between the XIth and the XIXth century with historical city data. The production and attraction of creative talent is associated with city institutions that protected economic and political freedoms and promoted local autonomy. Instead, indicators of local economic conditions such as city size and real wages, do not predict creative clusters. We also show that famous creatives are spatially concentrated and clustered across disciplines, that their spatial mobility has remained stable over the centuries, and that creative clusters are persistent but less than population.
    Keywords: electric vehicles, carbon pricing, interacting regulations, air pollution
    JEL: H23 Q48 Q53 Q54 Q58 R48
    Date: 2021
  7. By: Sager, Lutz
    Abstract: I investigate the relationship between income inequality and the carbon dioxide (CO2) content of consumption. I quantify the CO2 content of household expenditure using input-output analysis and estimate Environmental Engel curves (EECs) which describe the income–emissions relationship. Using EECs for the United States between 1996 and 2009, I decompose the change in CO2 over time and the distribution of emissions across households. In both cases, income is an important driver of household carbon. Finally, I describe a potential “equity-pollution dilemma”—progressive income redistribution may raise the demand for aggregate greenhouse gas emissions. I estimate that transfers raise emissions by 5.1% at the margin and by 2.3% under complete redistribution.
    Keywords: consumption; inequality; pollution; redistribution
    JEL: D12 D31 H23 Q40 Q52
    Date: 2020–10–01
  8. By: Sandrine Mathy (GAEL - Laboratoire d'Economie Appliquée de Grenoble - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes); P. Menanteau (GAEL - Laboratoire d'Economie Appliquée de Grenoble - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes)
    Abstract: Greater efforts are needed to bridge the emission gap between Nationally Determined Contributions and the objective to limit climate change below 2°C. This paper focuses on four European-Union countries: Germany, France, Poland and UK that represent on aggregate 55% of current EU emissions. It analyses national mitigation strategies produced by national research teams in the framework of the COP21_RIPPLES project and compatible with a long-term objective leading to a well below 2°C target either as part of an ambition in 2030 limited to that of the NDCs, or as part of more ambitious early action. We use the decarbonization wedges methodology, an advanced index decomposition analysis methodology for quantifying the contribution of different mitigation strategies. This makes it possible to assess the priorities for action to strengthen the NDCs. The article also highlights the impact sectoral growth dynamics have on the emission trajectories and the resulting necessary mitigation efforts.
    Keywords: Climate change,Mitigation strategies,LMDI,Activity effect,Nationally determined contributions,European Countries
    Date: 2020–12–30
  9. By: Isha Rajbhandari (University of Puget Sound); Alessandra Faggian (Gran Sasso Science Institute); Mark Partridge (Ohio State University)
    Abstract: This paper analyzes the relationship between oil and gas development and in-migration of workers into boomtowns, taking into account their human capital. Using zero-inflated negative binomial estimation methodology, we find that shale development has differing scale and demand shock impacts on U.S. interregional migration flows. The results demonstrate the heterogeneity of migration responses to shale developments with a disproportionately higher positive effect for medium-high human capital workers with technical degrees or trainings common in the energy industry. Furthermore, labor demand shocks from oil and gas development have a modest association with migration flows, which is contrary to the assumption that natural resource boom is a considerable attraction for migrants. This study highlights the types of human capital gained by oil and gas development areas characterized as being rural and sparsely populated, which can have important implications for the long-run growth and economic resilience of the boomtowns.
    Keywords: migration, shale gas boom, human capital
    JEL: J23 J24 Q33 R11 R23
    Date: 2020–12
  10. By: Saddam Hussain (Hubei University); Chunjiao Yu (Hubei University); Ali Sohail (Xjtu - Xi'an Jiaotong University); Sadaf Manzoor (Riphah International University); Ao Li (Hubei University)
    Abstract: As the extended part of One Belt One Road (OBOR) initiative that aims to interconnect the economic world, China-Pakistan-Economic-Corridor consists of different projects like road and railway, agricultural projects and energy projects in Pakistan. This paper aims to assess the current situation and the potential economic benefits of the energy projects of CPEC for Pakistan. Through research based on the statistical data, we find CPEC enormous contribution of $35 billion investment in the energy sector will bring some positive changes in energy sector of Pakistan. Actually, CPEC is playing a vital role in economic development of Pakistan.The potential economic gains include the following: increasing of supply energy mix with cheaper pricesgenerating energy by utilizing local resources-coal, wind, solar energy and water which help decreasing energy importdecrease trade depicts, encourage Foreign Direct Investment (FDI), reducing unemployment, infrastructural development, industrial zones, trade and local manufacturing industries.This study also explores some risks and challenges to the economy of Pakistan from CPEC.
    Keywords: CPEC,OBOR,Social-Economic Development,Pakistan
    Date: 2020–11–30
  11. By: Samir Cedic (Linköping University); Alwan Mahmoud (Linköping University); Matteo Manera (University of Milano-Bicocca, Fondazione Eni Enrico Mattei); Gazi Salah Uddin (Linköping University)
    Abstract: The aim of this paper is to analyze the relationship between different types of uncertainty and stock returns of the renewable energy and the oil & gas sectors. We use the quantile regression approach developed by Koenker and d’Orey (1987; 1994) to assess which uncertainties are the potential drivers of stock returns under different market conditions. We find that the bioenergy and the oil & gas sectors are most sensitive to uncertainties. Both sectors are affected by financial, euro currency, geopolitical and economic policy uncertainties. Our results have several policy implications. Climate policy makers can prioritize policies that support bioenergy in order to reduce the potentially negative effects of uncertainties on bioenergy investment. Investors aiming to diversify their portfolio should be aware that many uncertainties are common drivers of bioenergy and oil & gas returns, the connectedness between assets of these energy types could therefore increase when uncertainty increases.
    Keywords: Uncertainty, Macroeconomic Conditions, Renewable Energy, Stock Returns, Quantile Regression
    JEL: C1 G15 Q2 Q3 Q43
    Date: 2021–04
  12. By: Clemens Fuest; Volker Meier
    Abstract: We analyse the economic impact of using carbon pricing revenue to fund the EU budget. Such a reform would redistribute from countries with above average carbon intensive production to less carbon intensive countries. Once the reform is implemented, the low carbon countries will prefer a lower carbon price, i.e. laxer climate policy at the EU level, than before the reform. For high carbon countries the opposite is true. As a result, EU climate policy becomes less ambitious and less disputed. We also analyse an extension of the model in which consumption generates carbon emissions that are not covered by the emission certificate regulation, and we consider the impact of changes in EU climate policy on the rest of the world as well as global emissions.
    Keywords: climate change, global externalities, EU finances, political economy
    JEL: H23 H27 H87 Q58
    Date: 2021
  13. By: Geir H. M. Bjertnæs (Statistics Norway)
    Abstract: A tax on fuel combined with tax exemptions or subsidies for fuel-efficient vehicles is implemented in many countries to fulfill the Paris agreement and to curb mileage-related externalities from road traffic. The present study shows that a tax on fuel should be combined with heavier taxation of lowand zero emission vehicles to curb mileage-related externalities and to fulfill emission targets within the transport sector. The emission target is fulfilled by adjusting the CO2-tax component on fuel. The road user charge on fuel is designed to curb mileage-related externalities. The heavier tax on lowand zero emission vehicles prevent motorists from avoiding the road user charge on fuel by purchasing low- and zero emission vehicles.
    Keywords: Transportation; optimal taxation; environmental taxation; global warming
    JEL: H2 H21 H23 Q58 R48
    Date: 2021–03
  14. By: Holmberg, P.; Tangerås, T.
    Abstract: Many electricity markets use capacity mechanisms to support generation owners. Capacity payments can mitigate imperfections associated with “missing money†in the spot market and solve transitory capacity shortages caused by investment cycles, regulatory changes, or technology shifts. We discuss capacity mechanisms used in different electricity markets around the world. We argue that strategic reserves, if correctly designed, are likely to be more efficient than market-wide capacity mechanisms. This is especially so in electricity markets that rely on substantial amounts of intermittent generation, hydro power, and energy storage whose available capacity varies with circumstances and is difficult to estimate.
    Keywords: Capacity mechanism, market design, reliability, resource efficiency
    JEL: D25 D47 Q40 Q48
    Date: 2021–04–12
  15. By: Amina Baba (LEDA-CGEMP - Centre de Géopolitique de l’Energie et des Matières Premières - LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique); Anna Creti (LEDA-CGEMP - Centre de Géopolitique de l’Energie et des Matières Premières - LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique, X - École polytechnique); Olivier Massol (IFPEN - IFP Energies nouvelles - IFPEN - IFP Energies nouvelles, IFP School, City University of London)
    Abstract: We examine the profitability of flexible routing by LNG cargoes for a single supplier taking into account uncertainty in the medium-term dynamics of gas markets. First, we model the trajectory of natural gas prices in Asia, Northern America, and Europe using a Threshold Vector AutoRegression representation (TVAR) in which the system's dynamics switches back and forth between high and low regimes of oil price volatility. We then use the generalized impulse response functions (GIRF) obtained from the estimated threshold model to analyze the effects of volatility shocks on the regional gas markets dynamics. Lastly, the valuation of destination flexibility in LNG supplies is conducted using a real option approach. We generate a sample of possible future regional price trajectories using Monte Carlo simulations of our empirical model and determine for each trajectory the optimal shipping decisions and their profitability. Our results portend a substantial source of profit for the industry and reveal future movements of vessels. We discuss the conditional impact of destination flexibility on the globalization of natural gas markets.
    Keywords: LNG arbitrage,destination flexibility option,volatility,TVAR,Monte Carlo simulation
    Date: 2020–01
  16. By: Taimyra Batz Li\~neiro; Felix M\"usgens
    Abstract: Auctions have become the primary instrument for promoting renewable energy around the world. However, the data published on such auctions are typically limited to aggregated information (e.g., total awarded capacity, average payments). These data constraints hinder the evaluation of realisation rates and other relevant auction dynamics. In this study, we present an algorithm to overcome these data limitations in German renewable energy auction programme by combining publicly available information from four different databases. We apply it to the German solar auction programme and evaluate auctions using quantitative methods. We calculate realisation rates and - using correlation and regression analysis - explore the impact of PV module prices, competition, and project and developer characteristics on project realisation and bid values. Our results confirm that the German auctions were effective. We also found that project realisation took, on average, 1.5 years (with 28% of projects finished late and incurring a financial penalty), nearly half of projects changed location before completion (again, incurring a financial penalty) and small and inexperienced developers could successfully participate in auctions.
    Date: 2021–04
  17. By: Kolev, Galina V.; Kube, Roland; Schaefer, Thilo; Stolle, Leon
    Abstract: Das neue Emissionsreduktionziel der EU von 55 Prozent gegenüber 1990 erfordert den Hochlauf von umfassenden, kostspieligen Technologieinvestitionen zur Dekarbonisierung der Industrie. Gleichzeitig unterliegen erst knapp 20 Prozent der weltweiten Emissionen einer direkten CO2-Bepreisung (World Bank, 2020) und die regionalen CO2-Preise liegen meist unter dem europäi-schen Zertifikatspreis. Damit die Transformation der europäischen Industrie weiterhin mit ei-nem international konkurrenzfähigen Produktionsstandort Europa vereinbar ist, sind zuneh-mende Wettbewerbsnachteile für europäische Hersteller und das steigende Risiko einer Verla-gerung der Produktion und der Emissionen an außereuropäische Standorte (Carbon Leakage) einzudämmen. Im Rahmen ihres Green Deals plant die EU-Kommissionen dazu einen Grenzaus-gleich (Carbon Border Adjustment Mechanism, CBAM) auf Emissionen von importieren Indust-rieprodukten, wenn diese aus Regionen mit geringerem CO2-Preisniveau stammen (EC, 2019). Die Einführung eines Grenzausgleichsmechanismus wird handelspolitische Implikationen mit sich bringen. Sollten die Handelspartner die Grenzabgaben als protektionistisch motivierte Maß-nahme bewerten, könnten sie eine Klage vor der Welthandelsorganisation WTO erheben und Vergeltungsmaßnahmen einleiten. Die Welthandelsregeln enthalten zwar Ausnahmen für Um-weltgüter, doch die endgültige WTO-Konformität lässt sich erst durch drohende Gerichtsverfah-ren endgültig klären. Gerade für exportorientierte Hersteller in Europa liegt hierin ein besonde-res Risiko, denn der Grenzausgleich würde vor allem Zuliefererländer wie Russland, die Türkei und China betreffen, die gleichzeitig wichtige Exportzielländer sind. [...]
    JEL: F18 Q54 Q48
    Date: 2021
  18. By: Biqing Zhu; Rui Guo; Zhu Deng; Wenli Zhao; Piyu Ke; Xinyu Dou; Steven J. Davis; Philippe Ciais; Pierre Gentine; Zhu Liu
    Abstract: In October of 2020, China announced that it aims to start reducing its carbon dioxide (CO2) emissions before 2030 and achieve carbon neutrality before 20601. The surprise announcement came in the midst of the COVID-19 pandemic which caused a transient drop in China's emissions in the first half of 2020. Here, we show an unprecedented de-carbonization of China's power system in late 2020: although China's power related carbon emissions were 0.5% higher in 2020 than 2019, the majority (92.9%) of the increased power demand was met by increases in low-carbon (renewables and nuclear) generation (increased by 9.3%), as compared to only 0.4% increase for fossil fuels. China's low-carbon generation in the country grew in the second half of 2020, supplying a record high of 36.7% (increased by 1.9% compared to 2019) of total electricity in 2020, when the fossil production dropped to a historical low of 63.3%. Combined, the carbon intensity of China's power sector decreased to an historical low of 519.9 tCO2/GWh in 2020. If the fast decarbonization and slowed down power demand growth from 2019 to 2020 were to continue, by 2030, over half (50.8%) of China's power demand could be provided by low carbon sources. Our results thus reveal that China made progress towards its carbon neutrality target during the pandemic, and suggest the potential for substantial further decarbonization in the next few years if the latest trends persist.
    Date: 2021–04
  19. By: Carmen Herrero (Department of Economics, Universidad de Alicante,); Jose' Pineda (Sauder School of Business, University of British Columbia); Antonio Villar (Department of Economics, Universidad Pablo de Olavide); Eduardo Zambrano (Department of Economics, California Polytechnic State University)
    Abstract: This paper presents the Inclusive Green Energy (IGE) index to evaluate the progress in achieving the key dimensions of the Sustainable Development Goal 7, which entails ensuring "access to affordable, sustainable and modern energy for all." The key aspects of this index are: (i) it focuses on the change of the corresponding variables, rather than on their levels; (ii) it exhibits a decomposability feature that permits integrating several dimensions in a simple way, allowing for the inclusion of "goods" and "bads"; and (iii) the evaluation of progress is made relative to some reference values (targets and thresholds) that can differ between countries. We calculate the Inclusive Green Energy index of progress for 183 countries using data from 2000 to 2014 on three indicators intended to capture inclusiveness, greenness, and efficiency regarding energy use. The results show that progress has, on average, been positive across the world, with more than 88 per cent of the sample of countries experiencing some degree of progress. However, progress is smaller for the Middle East and North African and Sub-Saharan African countries and it is negative for most of the countries that exhibit low levels of human development, as measured by the Human Development Index. Furthermore, fewer than one in four of the countries in the sample have an IGE commensurate with having met their respective country-level targets. This suggests that much remains to be done by almost all countries worldwide with regard to being on track towards meeting their Sustainable Development Goal 7 by 2030.
    Keywords: Green economy, energy, sustainable development, composite index, targets, thresholds, policy making, measurement, progress
    Date: 2020
  20. By: George Mörsdorf
    Abstract: As part of its ambitious European Green Deal package, at the heart of which stands the commitment to become carbon-neutral by 2050, the European Commission announced that it would propose a “carbon border adjustment mechanism” to address the risk of carbon leakage. This study models the measure in a Computable General Equilibrium framework and analyses how effective it would be in reducing the incidence of carbon leakage. The analysis suggests that even a sectorally limited EU carbon border adjustment would reduce the carbon leakage rate by up to two thirds, making it more effective than the current system of free allocation. Besides environ mental benefits, it would also offset competitiveness losses of European energy-in tensive industries incurred by a higher EU carbon price and generate additional income for public budgets. At the same time, the analysis shows that around a third of the overall incidence of carbon leakage is driven not by competitiveness but by energy price effects, making it impossible to offset by border measures.
    Keywords: Carbon border, adjustment, carbon leakage, Computable General Equilib rium, EU climate policy, energy-intensive industries
    JEL: Q58 Q54 C68
    Date: 2021
  21. By: Frohmann, Alicia; Mulder, Nanno; Olmos, Ximena
    Date: 2021–01–20
  22. By: Richard Juřík (Ministry of the Environment of the Czech Republic); Nils Axel Braathen (OECD)
    Abstract: This paper assesses the design of the air pollution tax in conjunction with a stringency analysis of the emission concentration limits in the Czech Republic. The analysis draws upon a detailed database containing environmental reporting by industrial stationary sources. The assessment of the emission concentration limits focuses on analysing the shift of the statutory limits between 2013 and 2017 and the corresponding real-life measured concentration on individual source basis. It provides an assessment of stringency of the air protection instrument and also of the vintage differentiation applied in the form of transitional schemes. The stringency analysis of the emission concentration limits stringency is related to the air pollution tax relief provision.
    Keywords: air pollution, air pollution tax, air protection, emission concentration limits, environmental policy, policy design
    JEL: H21 H23 K32 P48 Q50
    Date: 2021–04–14
  23. By: Brilé Anderson (OECD); Emile Cammeraat (OECD); Antoine Dechezleprêtre (OECD); Luisa Dressler (OECD); Nicolas Gonne (OECD); Guy Lalanne (OECD); Joaquim Martins Guilhoto (OECD); Konstantinos Theodoropoulos (OECD)
    Abstract: This paper presents a comprehensive assessment of the policy instruments adopted by the Netherlands to reach carbon neutrality in its manufacturing sector by 2050. The analysis illustrates the strength of combining a strong commitment to raising carbon prices with ambitious technology support, uncovers the pervasiveness of competitiveness provisions, and highlights the trade-off between short-term emissions cuts and longer-term technology shift. The Netherlands’ carbon levy sets an ambitious price trajectory to 2030, but is tempered by extensive preferential treatment to energy-intensive users, yielding a highly unequal carbon price across firms and sectors. The country’s technology support focuses on the cost-effective deployment of low-carbon options, which ensures least-cost decarbonisation in the short run but favours relatively mature technologies. The paper offers recommendations for policy adjustments to reach the country’s carbon neutrality objective, including the gradual removal of exemptions, enhanced support for emerging technologies and greater visibility over future infrastructure plans.
    Keywords: Carbon pricing, Climate change policy, Technology support
    JEL: L52 O38 Q54 Q55 Q58
    Date: 2021–04–15
  24. By: Samir Cedic (Linköping University); Alwan Mahmoud (Linköping University); Matteo Manera (University of Milano-Bicocca, Fondazione Eni Enrico Mattei); Gazi Salah Uddin (Linköping University)
    Abstract: The aim of this paper is to analyze the connectedness between renewable energy (RE) sectors, the oil & gas sector and other assets using time-scale spillover approach. We find that the RE bioenergy firms are the most connected to oil & gas firms and oil prices. The bond market transmits spillover to the RE sectors, while it receives spillover from the oil & gas sector. Moreover, short-run connectedness drives the dynamic total connectedness. Since changes in bond rates mainly spillover to RE firms and not to oil & gas firms, policy makers should also be aware that changes in interest rates may impact the societal transition to a RE based energy system. Since a shock that increases connectedness in the short run will deter investors from investing in RE assets, it is important for climate policy makers to develop policies that reduce the effect of increased connectedness on RE investments.
    Keywords: Renewable Energy, Connectedness, Frequencies, Dynamics, Spillovers
    JEL: C1 G15 Q2 Q3 Q43
    Date: 2021–04
  25. By: Koutchogna Kokou Edem ASSOGBAVI; Stéphane Dées
    Abstract: As polices to curb carbon emissions are not implemented similarly across countries, a so-called ’carbon leakage’ may offset domestic carbon reductions at the global level by redirecting CO2-intensive production to places with less stringent environmental regulation. This article uses a standard gravity model with panel data to assess whether a tightening in environmental policy plays as an incentive to offshore highly polluting activities. Our results show no evidence of carbon leakage through international trade. On the contrary, stringent environment policy leads to a reduction in CO2 emissions embodied in traded goods, both from the exporter and the importer’s side. Such results are robust to focusing on trade between emerging and advanced economies. Emissions embodied in trade are rather explained by usual trade determinants, such as shipping costs or income, and the energy intensity of goods produced by the exporting countries.
    Keywords: CO2 emissions; international trade; panel data models
    JEL: C32 F18 Q56
    Date: 2021
  26. By: Sareesh Rawat
    Abstract: We live in an age of consumption with an ever-increasing demand of already scarce resources and equally fast growing problems of waste generation and climate change. To tackle these difficult issues, we must learn from mother nature. Just like waste does not exist in nature, we must strive to create circular ecosystems where waste is minimized and energy is conserved. This paper focuses on how public procurement can help us transition to a more circular economy, while navigating international trade laws that govern it.
    Date: 2021–04
  27. By: Jaller, Miguel; Pahwa, Anmol
    Abstract: In the last decade, e-commerce has grown substantially and transformed individual shopping behaviors. Most shopping activities—at least part of the search, if not the purchase itself—now involve an online component. This has consequently changed commodity flow and urban goods distribution. E-commerce has the potential to reduce the negative impacts of shopping on the environment by substituting individual shopping trips to stores using personal cars with optimized truck deliveries. However, shopping behavior is often more complex than this one-to-one substitution. Additionally, e-retailers entice consumers with free shipping, free returns, same-day, one-hour or two-hour expedited deliveries, and more in a quest for increased market share. These enhanced services result in additional distances driven, emissions, and operational costs for the e-retailer. The increasing customer expectations around lead time, delivery time, and return policy present a need for more sustainable delivery options, particularly for the “last mile” between the distribution center and the customer. Last-mile operators are considering alternatives to traditional diesel truck-based, door-to-door delivery such as use of alternative fuel (e.g., electric) vehicles, delivery from micro-hubs using cargo bikes, customer pickup at collection points, and crowdsourced deliveries. Researchers at the University of California, Davis developed models for e-commerce demand, last-mile delivery operations, and cost and sustainability assessment, then applied this modeling framework to a case study in Southern California to evaluate the potential impact of these strategies under different delivery scenarios. This policy brief summarizes findings from that research, along with policy implications. View the NCST Project Webpage
    Keywords: Business, Engineering, Alternate fuels, Approximation (Mathematics), Delivery service, Delivery vehicles, Electronic commerce, Logistics, Mathematical models, Residential areas, Urban goods movement, Urban transportation
    Date: 2021–04–01
  28. By: Ahmad Naimzada; Marina Pireddu
    Abstract: We reconsider the dynamic Cournot duopoly framework with homogeneous goods by Mamada and Perrings (2020), in order to highlight the richness in its outcomes. In the model each firm is taxed proportionally to its own emission only and charge functions are quadratic. While Mamada and Perrings (2020) focus on the case of convex, and partially on the case of concave, charge functions, we show that completing the analysis for concave functions it may happen that, with the raise in the emission charges, the equilibrium production levels for the two firms, which are directly proportional to their emissions, increase, both with homogeneous and with differentiated products. This highlights that, even in the absence of free riding possibilities, too soft environmental policies can produce detrimental effects on the pollution level, and thus the choice of the mechanism to implement has to be carefully pondered.
    Keywords: dynamic Cournot duopoly, differentiated products, emission charges, pollution control, comparative statics, stability analysis.
    JEL: C62 D43 Q51 Q58
    Date: 2021–04
  29. By: Claudiu Albulescu (CRIEF); Michel Mina; Cornel Oros
    Abstract: We provide a new investigation of the relationship between oil and stock prices in the context of the outbreak of the new coronavirus crisis. Specifically, we assess to what extent the uncertainty induced by COVID-19 affects the interaction between oil and the United States (US) stock markets. To this end, we use a wavelet approach and daily data from February 18, 2020 to August 15, 2020. We identify the lead-lag relationship between oil and stock prices, and the intensity of this relationship at different frequency cycles and moments in time. Our unique findings show that co-movements between oil and stock prices manifest at 3-5-day cycle and are stronger in the first part of March and the second part of April 2020, when oil prices are leading stock prices. The partial wavelet coherence analysis, controlling for the effect of COVID-19 and US economic policy-induced uncertainty, reveals that the coronavirus crisis amplifies the shock propagation between oil and stock prices.
    Date: 2021–04
  30. By: Jorrit Gosens (Crawford School of Public Policy, Australian National University); Alina Gilmanova (Key Laboratory of Solar Thermal Energy and Photovoltaic Systems, Institute for Electrical Engineering, Chinese Academy of Sciences); Johan Lilliestam (Institute for Advanced Sustainability Studies (IASS))
    Abstract: We analyse the potential for industry entry and catching up by latecomer countries or firms in formative sectors, by deriving a framework that builds on the concept of windows of opportunity for catching up. This framework highlights differences in technological, market, and institutional characteristics between formative and mature sectors, and elaborates how this may affect opportunities for catching up. We apply this framework to the global Concentrated Solar Power sector, in which China has rapidly narrowed the gap to the global forefront in terms of technological capabilities and market competitiveness. We find that the formative nature of the sector resulted in turbulent development of the technological, market, and institutional dimensions, making it more difficult for early leaders to retain leadership, and therefore easier for latecomer firms or countries to catch up. This signals an increased role in early-stage technology development in the next phase of the energy transition.
    Date: 2021–04
  31. By: Yue Liu; Lixin Tian; Zhuyun Xie; Zaili Zhen; Huaping Sun
    Abstract: Carbon emission right allowance is a double-edged sword, one edge is to reduce emission as its original design intention, another edge has in practice slain many less developed coal-consuming enterprises, especially for those in thermal power industry. Partially governed on the hilt in hands of the authority, body of this sword is the prices of carbon emission right. How should the thermal power plants dance on the blade motivates this research. Considering the impact of price fluctuations of carbon emission right allowance, we investigate the operation of Chinese thermal power plant by modeling the decision-making with optimal stopping problem, which is established on the stochastic environment with carbon emission allowance price process simulated by geometric Brownian motion. Under the overall goal of maximizing the ultimate profitability, the optimal stopping indicates the timing of suspend or halt of production, hence the optimal stopping boundary curve implies the edge of life and death with regard to this enterprise. Applying this methodology, real cases of failure and survival of several Chinese representative thermal power plants were analyzed to explore the industry ecotope, which leads to the findings that: 1) The survival environment of existed thermal power plants becomes severer when facing more pressure from the newborn carbon-finance market. 2) Boundaries of survival environment is mainly drawn by the technical improvements for rising the utilization rate of carbon emission. Based on the same optimal stopping model, outlook of this industry is drawn with a demarcation surface defining the vivosphere of thermal power plants with different levels of profitability. This finding provides benchmarks for those enterprises struggling for survival and policy makers scheming better supervision and necessary intervene.
    Date: 2021–04
  32. By: Bangsund, Dean A.; Hodur, Nancy M.
    Keywords: Demand and Price Analysis, Environmental Economics and Policy, Financial Economics, Land Economics/Use, Marketing
    Date: 2021–02–26
  33. By: Hans Lustfeld
    Abstract: The main advantage of wind and solar power plants is the power production free of CO2. Their main disadvantage is the volatility of the generated power. According to the estimates of H.-W. Sinn[1], suppressing this volatility requires pumped-storage plants with a huge capacity, several orders of magnitude larger than the present available capacity in Germany[2]. Sinn concluded that wind-solar power can be used only together with conventional power plants as backups. However, based on German power data[3] of 2019 we show that the required storage capacity can significantly be reduced, provided i) a surplus of wind-solar power plants is supplied, ii) smart meters are installed, iii) partly a different kind of wind turbines and solar panels are used in Germany. Our calculations suggest that all the electric energy, presently produced in Germany, can be obtained from wind-solar power alone. And our results let us predict that wind-solar power can be used to produce in addition the energy for transportation, warm water, space heating and in part for process heating, meaning an increase of the present electric energy production by a factor of about 5[1]. Of course, to put such a prediction on firm ground the present calculations have to be confirmed for a period of many years. And it should be kept in mind, that in any case a huge number of wind turbines and solar panels is required.
    Date: 2021–01
  34. By: Bierbrauer, Felix; Felbermayr, Gabriel; Ockenfels, Axel; Schmidt, Klaus M.; Südekum, Jens
    Abstract: The EU steps up its efforts to curb its territorial CO2-emissions. It is planning to introduce a carbon border adjustment mechanism (CBAM) to level the playing field and to raise own resources. However, unilateral European climate policy action, whether shored up with a CBAM or not, can only play a limited role in reducing global CO2-emissions. A U-CBAM cannot stop indirect leakage, it has ambiguous effects on other countries' mitigation efforts, and it poses the risk of conflicts with trade partners.The EU, together with the US and other like-minded countries, should push hard to establish a climate club with a common minimum price of CO2and a common CBAM applied to third countries. Such a framework would incentivize other countries to join while limiting leakage and reducing the risk of trade policy disputes.
    Keywords: Climate Policy,Carbon Leakage,Carbon Border Adjustment,Climate Club,Klimapolitik,Carbon Leakage,CO2-Grenzausgleich,Klimaclub
    Date: 2021

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