nep-ene New Economics Papers
on Energy Economics
Issue of 2021‒05‒03
fifty papers chosen by
Roger Fouquet
London School of Economics

  1. The interplay between green policy, electricity prices, financial constraints and jobs. Firm-level evidence By Gert Bijnens; John Hutchinson; Jozef Konings; Arthur Saint Guilhem
  2. Renewable Electricity and Economic Growth relationship in the long run: panel data econometric evidence from the OECD By Saptorshee Kanto Chakraborty; Massimiliano Mazzanti
  3. The European Market for Guarantees of Origin for Green Electricity: A Scenario-Based Evaluation of Trading under Uncertainty By Wimmers, Alexander; Madlener, Reinhard
  4. Electricity Sector Reform Performance in Sub-Saharan Africa: A Parametric Distance Function Approach By Baños-Pino, José F.; Boto-García, David; Zapico, Emma
  5. Trajectory Based Robust Optimization Applied to the Case of Electricity Facilities Investment with Significant Penetration of Renewables By Pierre Cayet; Arash Farnoosh
  6. Influence of Electricity Access on Gender: Evidences from Nepal By Murali, Rashmi; Brahmachari, Deborshi; Govindan, Mini
  7. Optimal bidding on hourly and quarter-hourly day-ahead electricity price auctions: trading large volumes of power with market impact and transaction costs By Micha{\l} Narajewski; Florian Ziel
  8. Evaluation Design Report for the Liberia Energy Project: Activities 1 and 2 By Candace Miller; Kristine Bos; Ali Protik; Randall Blair; Paolo Abarcar; Matthew Ribar
  9. Liberia Energy Project: Evaluation Design for the Liberia Electricity Corporation Training Activity By Paolo Abarcar; Poonam Ravindranath; Cullen Seaton; Candace Miller; Arif Mamun
  10. Increasing Access to Electricity in Liberia By Various Authors
  11. Discontinuance Among California’s Electric Vehicle Buyers: Why are Some Consumers Abandoning Electric Vehicles? By Hardman, Scott; Tal, Gil
  12. Batterien für Elektroautos: Faktencheck und Handlungsbedarf. Sind Batterien für Elektroautos der Schlüssel für eine nachhaltige Mobilität der Zukunft? By Thielmann, Axel; Wietschel, Martin; Funke, Simon; Grimm, Anna; Hettesheimer, Tim; Langkau, Sabine; Loibl, Antonia; Moll, Cornelius; Neef, Christoph; Plötz, Patrick; Sievers, Luisa; Tercero Espinoza, Luis; Edler, Jakob
  13. Who will control the electric vehicle market By Bruno Jetin
  14. Batteries for electric cars: Fact check and need for action. Are batteries for electric cars the key to sustainable mobility in the future? By Thielmann, Axel; Wietschel, Martin; Funke, Simon; Grimm, Anna; Hettesheimer, Tim; Langkau, Sabine; Loibl, Antonia; Moll, Cornelius; Neef, Christoph; Plötz, Patrick; Sievers, Luisa; Tercero Espinoza, Luis; Edler, Jakob
  15. The relationship between country and individual household wealth and climate change concern: the mediating role of control By Kelly Fielding; Céline Nauges; Sarah Ann Wheeler
  16. Impact of oil prices on remittances to Pakistan from GCC countries: evidence from panel asymmetric analysis By Abbas, Shujaat
  17. Huella de Carbono para la Economía Chilena 2017 By Felipe Avilés-Lucero; Gabriel Peraita; Camilo Valladares
  18. Promoting Sales of Energy Efficient Household Appliances: Outcomes and Cost Effectiveness of Rebate Programs By Thiess Büttner; Boryana Madzharova
  19. Brussels and Washington realigned on climate By Cecilia Bellora; Lionel Fontagné
  20. A Mayor’s Perspective on Tackling Air Pollution By Fu, Shihe; Viard, V. Brian
  21. Towards An Environmental Goods Agreement STyle (EGAST) agenda to improve the regime complex for Climate Change By Jaime de Melo; Jean-Marc Solleder
  22. "Price Bubbles in Lithium Markets around the World". By Jorge M. Uribe; Natalia Restrepo; Montserrat Guillen
  23. A Multiperiod Consensus-Based Transactive Energy System for Unbalanced Distribution Networks By Cheng, Rui; Tesfatsion, Leigh; Wang, Zhaoyu
  24. The Long-Run Spillover Effects of Pollution: How Exposure to Lead Affects Everyone in the Classroom By Gazze, Ludovica; Persico, Claudia; Spirovska, Sandra
  25. Stakeholder dynamics in residential solar energy adoption: findings from focus group discussions in Germany By Fabian Scheller; Isabel Doser; Emily Schulte; Simon Johanning; Russell McKenna; Thomas Bruckner
  26. Liberia Energy Project: Evaluation Design for the Water Pipeline Sub-Activity By Poonam Ravindranath; Paolo Abarcar; Cullen Seaton; Candace Miller; Arif Mamun
  27. The Impact of Oil Prices on World Trade By Giulia Brancaccio; Myrto Kalouptsidi; Theodore Papageorgiou
  28. Opportunities and challenges when importing green hydrogen and synthesis products By Wietschel, Martin; Bekk, Anke; Breitschopf, Barbara; Boie, Inga; Edler, Jakob; Eichhammer, Wolfgang; Klobasa, Marian; Marscheider-Weidemann, Frank; Plötz, Patrick; Sensfuß, Frank; Thorpe, Daniel; Walz, Rainer
  29. Les Certificats d'Economie d'Energie entre économie et politique By Crampes, Claude; Léautier, Thomas-Olivier
  30. The impact of past pandemics on CO$_2$ emissions and transition to renewable energy By Michal Brzezinski
  31. Re-investigating the oil-food price co-movement using wavelet analysis By Loretta Mastroeni; Greta Quaresima; Pierluigi Vellucci
  32. Substantial contribution to climate change mitigation – a framework to define technical screening criteria for the EU taxonomy By CANFORA Paolo; DRI Marco; POLIDORI Olivier; SOLZBACHER Clara; ARRANZ PADILLA Maria
  33. Roundtrip Carsharing in New York City: An Evaluation of a Pilot Program and System Impacts By Martin, Elliot PhD; Stocker, Adam; Nichols, Aqshems; Shaheen, Susan PhD
  34. Investment and financing perspectives for a solar photovoltaic project By Marchioni, Andrea; Magni, Carlo Alberto; Baschieri, Davide
  35. Growth, coal and carbon emissions: economic overheating and climate change By Emanuel Kohlscheen; Richhild Moessner; Előd Takáts
  36. Quantifying virtual water scarcity risk transfers of energy system in China By Xuebing Yao; Xu Tang; Arash Farnoosh; Cuiyang Feng
  37. Energy, Groundwater, and Crop Choice By Fiona Burlig; Louis Preonas; Matt Woerman
  38. Mobilizing innovation for the global green shift: The case for demand-oriented innovation policy By Jan Fagerberg
  39. Impact of knowledge search practices on the originality of inventions: A study in the oil & gas industry through dynamic patent analysis By Quentin Plantec; Pascal Le Masson; Benoît Weil
  40. Seductive subsidies? An analysis of second-degree moral hazard in the context of solar systems By Evert Reins
  41. Domestic Energy Consumption in Ghana: Deprivation versus Likelihood of Access By Alhassan A. Karakara; Evans S. Osabuohien; Simplice A. Asongu
  42. Evaluation of the Liberia Power Compact’s Mt. Coffee Hydropower Plant Rehabilitation and Capacity Building and Sector Reform: Baseline and Interim Findings By Candace Miller; Kristine Bos; Poonam Ravindranath; Paolo Abarcar; Arif Mamun; Matthew Spitzer; Jeremy Page; Laura Meyer; Joshua Claxton; Jonathon Cook; Sara Bryk
  43. Greening Lithuania’s growth By Hansjörg Blöchliger; Sigita Strumskyte
  44. Revisiting the literature on the dynamic Environmental Kuznets Curves using a latent structure approach By Saptorshee Kanto Chakraborty; Massimiliano Mazzanti
  45. Forecasting Energy Commodity Prices: A Large Global Dataset Sparse Approach By Davide Ferrari; Francesco Ravazzolo; Joaquin Vespignani
  46. Cinquième période à venir : les Certificats d’Economies d’Energie, catalyseurs du couple Reprise / Transition Ecologique ? By Maxime Schenkery; Jacques Millery
  47. Where to Refuel: Modeling On-the-way Choice of Convenience Outlet By Ari Pramono; Harmen Oppewal
  48. Households' energy demand and the effects of carbon pricing in Italy By Ivan Faiella; Luciano Lavecchia
  49. Policy with Stochastic Hysteresis By Georgii Riabov; Aleh Tsyvinski
  50. The Transition to Carbon Capture and Storage Technologies By Rolf Golombek; Mads Greaker; Snorre Kverndokk; Lin Ma

  1. By: Gert Bijnens (Economics and Research Department, NBB and KULeuven); John Hutchinson (European Central Bank); Jozef Konings (KULeuven, University of Liverpool and Nazarbayev University); Arthur Saint Guilhem (European Central Bank)
    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.
    Keywords: environmental regulation, labor demand, employment, manufacturing industry, monetary policy
    JEL: E52 H23 J23 Q48
    Date: 2021–04
  2. By: Saptorshee Kanto Chakraborty (Paris School of Economics); Massimiliano Mazzanti (University of Ferrara; SEEDS, Italy)
    Abstract: Renewable electricity is a pillar of the sustainability transition being pursued through climate and energy policy strategies, and the European Green Deal represents a potential investment plan for this new phase of development. Economic growth can be inƒfluenced by the expansion of renewable electricity consumption, but the nature of their relationship is ambiguous and depends on various economic and policy factors. Th‘is paper investigates the long-run relationship between renewable electricity consumption and economic growth in selected countries over the period 1971-2015 using econometric panel data techniques that specifi€cally address cross-country heterogeneity and cross-sectional dependence. Our fi€ndings suggest that, on average, there is a signi€cant positive long-term relationship between renewable electricity consumption and economic growth, although Granger causality is not detected. Regarding causality, we do fi€nd per capita economic growth to be a causal factor for total electricity consumption.
    Keywords: Electricity Consumption, Economic Growth, Renewables, Cross-sectional Dependence, CS-ARDL Model, CS-DL Model
    Date: 2021–04
  3. By: Wimmers, Alexander (RWTH Aachen University); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))
    Abstract: Because electricity is a homogeneous commodity, the origin of a specific MWh of delivered green electricity cannot be determined. Thus, Guarantees of Origin (GoO) were introduced in order to enhance transparency on the origin of production of green electricity in Europe. The separation of electricity and GoO trade has resulted in a prosperous GoO market that is, however, characterized by non-transparency and speculative behavior. Historic price development occurs seemingly arbitrarily and can therefore not be used to forecast future GoO prices. Bearing this in mind, this paper firstly provides an overview of the European GoO market and an analysis of the historic price development; secondly, it proposes a model for determining future price developments of European GoOs for different renewable energy technologies in different countries up to 2040. Four different scenarios are considered. It was found that prices for GoOs will increase on average in the next years, with prices ranging from 1.77 to 3.36 €/MWh in 2040. Coupled with rising demand for green electricity and further standardization of issuance procedures as well as the projected price developments, GoOs might well become a useful tool for the promotion of green electricity production in the EU.
    Keywords: renewable energy; green electricity; policy; willingness to pay; power purchase agreement; Europe; guarantees of origin
    JEL: O33 O52 Q42 Q48
    Date: 2020–12
  4. By: Baños-Pino, José F.; Boto-García, David; Zapico, Emma
    Abstract: This study performs an empirical analysis of the technical efficiency of toll motorway concessionaire companies in Spain. We estimate a dynamic stochastic frontier model using an input-oriented distance function for 30 concessionaires during the 2003-2015 period. Considering a multi-output production technology with light and heavy vehicles, we estimate an autoregressive dynamic specification under a Bayesian framework that acknowledges persistence in firm efficiency due to adjustment costs. Our results reveal: i) large persistence in technical inefficiency in the toll motorway sector, ii) technical change from 2006 onwards, and iii) increasing returns to scale. We derive both short- and long-run inefficiency estimates and document that long-run inefficiency increases with the number of stretches a firm manages; however, inefficiency is unrelated to the political authority that grants the concession. We also find that the marginal cost of light vehicles per kilometre is about half the one for heavy vehicles.
    Date: 2021
  5. By: Pierre Cayet (IFPEN - IFP Energies nouvelles - IFPEN - IFP Energies nouvelles, IFP School); Arash Farnoosh (IFPEN - IFP Energies nouvelles - IFPEN - IFP Energies nouvelles, IFP School)
    Abstract: As large scale penetration of renewables into electric systems requires increasing flexibility from dispatchable production units, the electricity mix must be designed in order to address brutal variations of residual demand. Inspired from the philosophy of Distributionally Robust Optimization (DRO), we propose a trajectory ambiguity set including residual demand trajectories verifying both support and variability criterion using ambiguous quantile information. We derive level-maximizing, level-minimizing and variability-maximizing residual demand trajectories using two algorithms based on forward-backward path computation. This set of limiting trajectories allows us to make investment decisions robust to extreme levels and brutal variations of residual demand. We provide a numerical experiment using a MILP (Mixed-Integer Linear Programming) investment and unit commitment model in the case of France and discuss the results.
    Keywords: OR in energy,Uncertainty modelling,Decision analysis,Renewables,Robust optimization
    Date: 2021–02
  6. By: Murali, Rashmi; Brahmachari, Deborshi; Govindan, Mini
    Abstract: Access to modern energy has been found to especially benefit rural women, in terms of reducing their drudgery and increasing their efficiency of time use. This paper draws from the findings of a primary household survey and qualitative study in Nepal in order to analyse how access to modern energy affects gendered aspects of health, education, income generation, and decision-making. It was found that a higher percentage of children (boys and girls) from households with electricity access were enrolled in schools and spent more hours studying. Further, electricity access in health centres assisted them to offer medical services to the people. Though these facilities helped in enhancing the overall quality of life of women, decisions regarding health and education were found to be taken mostly by men or sometimes jointly with their spouses. It was also seen that the decisions regarding expenditure of income earned by women, were not taken by them independently. Further, households that have had access to electricity for a longer period of time were more likely to send a higher number of their children to school as compared to those who got access to electricity later. This means there is a time lag between the time a household gets access to electricity and the time when improvement in socioeconomic and developmental attainments (like school enrolment) begin to show up.
    Keywords: Modern energy, gender, education, health, income, decision-making
    JEL: I14 I15 I24 I25 J16 O1 O10 O15 Q40 Q42
    Date: 2019–06
  7. By: Micha{\l} Narajewski; Florian Ziel
    Abstract: Electricity exchanges offer several trading possibilities for market participants: starting with futures products through the spot market consisting of the auction and continuous part, and ending with the balancing market. This variety of choice creates a new question for traders - when to trade to maximize the gain. This problem is not trivial especially for trading larger volumes as the market participants should also consider their own price impact. The following paper raises this issue considering two markets: the hourly EPEX Day-Ahead Auction and the quarter-hourly EPEX Intraday Auction. We consider a realistic setting which includes a forecasting study and a suitable evaluation. For a meaningful optimization many price scenarios are considered that we obtain using bootstrap with models that are well-known and researched in the electricity price forecasting literature. The own market impact is predicted by mimicking the demand or supply shift in the respectful auction curves. A number of trading strategies is considered, e.g. minimization of the trading costs, risk neutral or risk averse agents. Additionally, we provide theoretical results for risk neutral agents. Especially we show when the optimal trading path coincides with the solution that minimizes transaction costs. The application study is conducted using the German market data, but the presented methods can be easily utilized with other two auction-based markets. They could be also generalized to other market types, what is discussed in the paper as well. The empirical results show that market participants could increase their gains significantly compared to simple benchmark strategies.
    Date: 2021–04
  8. By: Candace Miller; Kristine Bos; Ali Protik; Randall Blair; Paolo Abarcar; Matthew Ribar
    Abstract: This report describes Mathematica’s comprehensive mixed-methods approach to the impact and performance evaluations of Activities 1 and 2.
    Keywords: Liberia, energy, power, MCC, performance evaluation
  9. By: Paolo Abarcar; Poonam Ravindranath; Cullen Seaton; Candace Miller; Arif Mamun
    Abstract: The Liberia Electricity Corporation (LEC) Training Activity, which aims to improve the technical capacity of the energy sector workforce through improved training for LEC staff and technicians.
    Keywords: Liberia, MCC, energy, training, LEC, evaluation
  10. By: Various Authors
    Abstract: Millennium Challenge Corporation’s $257 million Liberia Compact (2016–2021) aims to encourage economic growth and reduce poverty by improving access to reliable and affordable electricity.
    Keywords: Liberia, energy, power, MCC, impact evaluation
  11. By: Hardman, Scott; Tal, Gil
    Abstract: For the market introduction of electric vehicles to be successful, first-time adopters need to make continual purchases of the vehicles. Discontinuance, the act of abandoning a new technology after once being an adopter, has implications for market growth and could prevent electric vehicles from ever reaching 100% market share. Using results from five surveys of electric vehicle owners, the researchers examine discontinuance among battery electric and plug-in hybrid electric vehicle adopters. In this sample, discontinuance occurs at a rate of 21% for plug-in hybrid adopters and 19% for battery electric vehicle adopters. They show that discontinuance is related to dissatisfaction with convenience of charging, owning household vehicles with lower efficiencies, being a later adopter of PEVs, not having Level 2 (220V) charging from home, and not being male. Despite consumers overcoming initial barriers of PEVs, it appears some barriers, notably their refueling style, resurface during ownership and eventually become a barrier to continuing with PEV ownership. View the NCST Project Webpage
    Keywords: Social and Behavioral Sciences, Electric vehicle, market, consumers, survey
    Date: 2021–04–01
  12. By: Thielmann, Axel; Wietschel, Martin; Funke, Simon; Grimm, Anna; Hettesheimer, Tim; Langkau, Sabine; Loibl, Antonia; Moll, Cornelius; Neef, Christoph; Plötz, Patrick; Sievers, Luisa; Tercero Espinoza, Luis; Edler, Jakob
    Abstract: Betrachtet man die zentralen Fragen entlang der gesamten Batterie-Wertschöpfungskette, so zeigt sich: Der breiten Marktdiffusion batterieelektrischer Pkw (E-Pkw), welche insbesondere im Zeitraum 2020-2030+ in der entscheidenden Hochlaufphase sein wird, steht nichts Unüberwindbares im Wege. Jedoch gilt es noch etliche technologische, ökonomische, ökologische, regulative und gesellschaftliche Herausforderungen im kommenden Jahrzehnt anzugehen. Im nachfolgenden Teil werden die wichtigsten Erkenntnisse zusammengefasst, in den späteren Einzelkapiteln folgt eine ausführliche Darstellung.
    Date: 2020
  13. By: Bruno Jetin (CEPN - Centre d'Economie de l'Université Paris Nord - CNRS - Centre National de la Recherche Scientifique - USPC - Université Sorbonne Paris Cité - UP13 - Université Paris 13)
    Abstract: The second automobile revolution, the age of electrification and digitalisation, is on its way. It is a gradual transition and not a sudden break. However, millions of electric vehicles (EVs) are now being sold, and the EV market is becoming a mass market propelled by economies of scale. It is reflected in the drop in the cost of batteries which will bring the price of EVs on a par with the price of conventional vehicles in the coming decade. Nonetheless, two interrelated issues have been underestimated and will now decide who will play a dominant role and benefit the most from the EV market. The first is the relative scarcity of raw materials from which batteries are made. The second is that the primary EV market is China which gives its companies a strategic advantage for the supply of critical metals and the large-scale production of batteries. Our research analyses the fundamental role of natural resources for the control of the EV market and the response of governments to ensure access to them. We show the importance of industrial and diplomatic policies in a context of geostrategic rivalries of large powers.
    Keywords: electric vehicle,battery electric vehicle,lithium-ion battery,materials,battery makers,carmakers
    Date: 2019–06–12
  14. By: Thielmann, Axel; Wietschel, Martin; Funke, Simon; Grimm, Anna; Hettesheimer, Tim; Langkau, Sabine; Loibl, Antonia; Moll, Cornelius; Neef, Christoph; Plötz, Patrick; Sievers, Luisa; Tercero Espinoza, Luis; Edler, Jakob
    Abstract: When looking at the main questions along the entire battery value chain, it becomes clear that there are no insurmountable obstacles that could prevent the widespread market diffusion of battery-electric passenger cars, particularly during the decisive ramp-up phase between 2020 and 2030+. However, numerous technological, economic, ecological, regulatory and societal challenges still need to be tackled in the coming decade. The most important findings are summarized below, followed by a more detailed description in the individual chapters.
    Date: 2020
  15. By: Kelly Fielding (University of Queensland [Brisbane]); Céline Nauges (INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Sarah Ann Wheeler (University of Adelaide)
    Abstract: The relationship between wealth and climate change concern has been a focus of several studies. In this article, we hypothesize that richer households (and countries) are less concerned about climate change because wealth provides a buffer against some of the related risks. This leads people in wealthier countries and households to perceive a greater sense of control over climate change impacts, which in turn results in lower levels of concern. We tested this hypothesis using a unique household survey encompassing 11 OECD countries and over 10,000 households and applying mixed multi-level regression models. Our results confirmed a statistically significant negative relationship between country and household wealth and individuals' perceptions of the seriousness of climate change. This study contributes to current literature by showing that this relationship is mediated through sense of control, measured at the country level by the country's readiness index and at the individual household level by the extent of adoption of energy efficiency improvements. These findings raise the question of how best to incentivize action on climate change amongst those with the ability—but not necessarily the motivation—to respond.
    Keywords: climate change concern,wealth,control,country wealth,household wealth
    Date: 2021
  16. By: Abbas, Shujaat
    Abstract: International migration and remittances from oil-exporting Gulf countries are important sources of employment, income, and foreign exchange for Pakistan. This study investigates the asymmetric impact of oil prices on remittances to Pakistan from GCC countries, over the period 1980 to 2018, by employing the recently advanced non-linear panel Pooled Mean Group (PMG) model. The findings show that oil prices and remittance are asymmetrically associated. The increasing oil prices have a significant positive effect only in the long run; whereas, reducing oil prices reveal a significant negative effect only in the short run. Findings of other explanatory variables show that the economic condition in host countries, exchange rate, and trade relations have positive effects only in the long run; whereas the economic condition in the home country has significant negative effects in the long run and positive effect in the short run. This study urges oil exports to stabilize oil supply and prices, and Pakistan to enhance trade relations, exchange rate adjustments, and financial development
    Keywords: Energy prices, remittances flow, asymmetric analysis, panel data, Pakistan
    JEL: F22 F24 Q4
    Date: 2020
  17. By: Felipe Avilés-Lucero; Gabriel Peraita; Camilo Valladares
    Abstract: In the present paper, we estimate the carbon footprint of Chilean industries in terms of CO2 equivalent for a set of greenhouse gases, using an input-output approach that accounts for the different electricity generation technologies. The objective of this study is to provide a methodology to measure the carbon footprint and to contribute to the analysis of the reduction of emissions and the effect that different sectors make to this purpose. Our results show that, for the year 2017, the generation of electricity based on coal and the manufacturing industry are located as the largest direct emitters of CO2, while in terms of carbon footprint, the manufacturing industry and mining show the highest levels of incorporated CO2. Regarding final demand, exports have the highest share of the carbon footprint, mainly explained by the orientation towards the external market of mining and part of the manufacturing industry.
    Date: 2021–04
  18. By: Thiess Büttner; Boryana Madzharova
    Abstract: This paper studies seven rebate programs aiming at accelerating the replacement of energy-intensive household appliances. Based on a large product-level data set for several European countries, we study the effects on unit sales and prices of both subsidized and non-subsidized products. The empirical identification strategy exploits the temporary implementation of the rebates in regional segments of the European Common Market. The results for unit sales indicate that subsidies can be an effective instrument for stimulating purchases of energy efficient appliances. While the strength of the stimulus proves sensitive to program design, we find limited evidence of intertemporal substitution, and no indication that program effects are driven by a drop in sales of non-subsidized products. In some cases, sales of non-subsidized products increase, a finding that we attribute to information campaigns associated with the rebate programs. Price effects are modest, implying that subsidies are mostly passed through to consumers. Considering the actual energy savings, however, our analysis shows that rebate programs are a relatively expensive way to improve energy efficiency.
    Keywords: rebate programs, energy efficiency, household appliances, program evaluation
    JEL: H23 Q48 D12
    Date: 2021
  19. By: Cecilia Bellora (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique); Lionel Fontagné (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: On March 10, 2021, the European Parliament adopted a resolution on the border carbon adjustment mechanism that the European Commission committed to setting up. How would this adjustment work and what would be its consequences? By reducing the incentive to displace production of high-emitting products to countries with little or no carbon tax, the carbon adjustment mechanism would reduce "carbon leakage" but increase the price of carbon in the European Union (EU). Therefore, European industries that use as inputs goods subject either to the carbon tax or to the carbon adjustment are at risk of a loss of competitiveness. However, the main challenge in addressing climate change is the participation of the major emitting countries in the effort to abate greenhouse-gas emissions. While the European mechanism could help the EU in strengthening its emissionreduction targets, it is above all the compliance of the United States with the commitments made in the Paris Agreement that will make it possible to save one year's worth of global emissions by 2035, pending a more concrete commitment from China.
    Date: 2021–02–26
  20. By: Fu, Shihe; Viard, V. Brian
    Abstract: We review recent empirical economic studies on urban ambient air pollution from a mayor’s perspective. We discuss the sources of urban air pollution, the economic costs that it imposes, and the policy tools available to a mayor to alleviate it. For economic costs, we briefly summarize traditional estimates of health and mortality costs and focus on more recent evidence on mental and psychological health, labor productivity and supply, avoidance behavior, willingness to pay for clean air and long-term (multi-decade) impacts. The policy tools we evaluate include pollution information disclosure, auto license and driving restrictions, congestion tolls, public transit investments, emission standards and controls, and gasoline taxes. We also discuss challenges posed by transboundary pollution across cities and the extent to which mayors’ incentives encourage tackling air pollution under different political systems. We briefly discuss possible future research agendas.
    Keywords: urban air pollution; environmental costs and benefits; urban public policy, environmental policies; incentives
    JEL: H23 H75 O18 Q51 Q52
    Date: 2021–04–27
  21. By: Jaime de Melo (University of Geneva [Switzerland], FERDI - Fondation pour les Etudes et Recherches sur le Développement International); Jean-Marc Solleder (University of Geneva [Switzerland])
    Abstract: Ever since the creation of the WTO, attempts at bringing together the trade and climate regime have failed. This paper reviews attempts at reducing tariffs on products classified as Environmental Goods (EGs), causes of failure in past attempts, and suggests requirements for a meaningful agenda in future attempts. The start is the failure at the negotiations on the Environmental Goods Agreement (EGA) negotiations started in 2014 and abandoned in 2016. Discussion on prospects is around elements that would enter 'EGA-STyle' (EGAST) negotiations among a small group of countries. The paper starts with new descriptive data on the inclusion of provisions in Regional Trade Agreements (RTAs) across the world encouraging trade in EGs. However, the presence of these provisions in RTAs has not been reflected in increased bilateral trade in EGs among RTA members, confirming the relevance of continuing to revive momentum to reduce barriers to trade in EGs. Discussion of reasons for failure at the EGA (and earlier at the Doha Round) follow. An EGAST agenda should go beyond the elimination of ‘nuisance tariffs' to include high energy-efficiency EGs and high-tariff products. The EG list should also include Environmentally Preferable Products. As to the difficult-to-detect Non-tariff Barriers (e.g. non-tariff measures), among which some are protectionist in intent, they should be included in the agenda up for mutual recognition. The paper concludes that EGAST negotiations to reduce barriers to trade in EGs would still be a promising avenue for rapprochement between the trade and climate regimes.
    Keywords: Environmental Goods,WTO,Climate Change
    Date: 2021–04–07
  22. By: Jorge M. Uribe (Universitat Oberta de Catalunya , Spain); Natalia Restrepo (Universidad del Valle, Colombia); Montserrat Guillen (Universitat de Barcelona, Spain)
    Abstract: The global energy transition to low-carbon technologies for transportation is heavily dependent on lithium. By leveraging the latest advances in time-series econometrics we show that lithium prices (carbonate and hydroxide) have recently experienced market bubbles, particularly from the end of 2015 to the end of 2018, although in the case of European hydroxide we also date a bubble as recently as September 2020. Bubbles are accompanied by market corrections and extreme uncertainty which, in the case of lithium, may put at risk the future continuous supply needed for manufacturing lithium-based batteries for the electric vehicle. Governments and private stakeholders could reduce uncertainty imposed by these speculative dynamics, for instance, by establishing public stabilization funds and setting up capital buffers that help to diversify operational and market risks induced by a bubble bursting. Such funds should be ideally located in portfolios, such as the global stock markets or other energy commodities, which exhibit idiosyncratic bubbles unsynchronized with the bubbles observed in lithium markets.
    Keywords: Speculative processes, Electric vehicle, Li-ion batteries. JEL classification: Q21, N70, Q41, Q42.
    Date: 2021–04
  23. By: Cheng, Rui; Tesfatsion, Leigh; Wang, Zhaoyu
    Abstract: This study develops a consensus-based transactive energy system design managed by an independent distribution system operator (DSO) for an unbalanced radial distribution network. The network is populated by welfare-maximizing customers with price-sensitive and fixed (non-price-sensitive) demands who make multiple successive power decisions during each real-time operating period OP. The DSO and customers engage in an iterative negotiation process in advance of each OP to determine retail price-to-go sequences for OP that align customer power decisions with network reliability constraints in a manner that respects customer privacy. The convergence properties of a dual decomposition algorithm developed to implement this negotiation process are analytically established. A case study is presented for an unbalanced 123-bus radial distribution network populated by household customers that demonstrates the practical effectiveness of the design.
    Date: 2021–04–23
  24. By: Gazze, Ludovica (University of Warwick and CAGE); Persico, Claudia (School of Public Affairs, American University and IZA); Spirovska, Sandra (University of Wisconsin-Madison)
    Abstract: Children exposed to pollutants like lead are more disruptive and have lower achievement. However, little is known about whether lead-exposed children affect the long-run outcomes of their peers. We estimate these spillover effects using new data on preschool blood lead levels (BLLs) matched to education data for all students in North Carolina public schools. We compare siblings whose school-grade cohorts differ in the proportion of children with elevated BLLs, holding constant school and peers’ demographics. Having more lead-exposed peers is associated with lower high-school graduation and SAT-taking rates and increased suspensions and absences. Peer effects are larger for same-gendered students.
    Keywords: Lead Poisoning, Spillovers, Peer Effects, Human Capital JEL Classification: Q52, I14, I24
    Date: 2021
  25. By: Fabian Scheller; Isabel Doser; Emily Schulte; Simon Johanning; Russell McKenna; Thomas Bruckner
    Abstract: Although there is a clear indication that stages of residential decision making are characterized by their own stakeholders, activities, and outcomes, many studies on residential low-carbon technology adoption only implicitly address stage-specific dynamics. This paper explores stakeholder influences on residential photovoltaic adoption from a procedural perspective, so-called stakeholder dynamics. The major objective is the understanding of underlying mechanisms to better exploit the potential for residential photovoltaic uptake. Four focus groups have been conducted in close collaboration with the independent institute for social science research SINUS Markt- und Sozialforschung in East Germany. By applying a qualitative content analysis, major influence dynamics within three decision stages are synthesized with the help of egocentric network maps from the perspective of residential decision-makers. Results indicate that actors closest in terms of emotional and spatial proximity such as members of the social network represent the major influence on residential PV decision-making throughout the stages. Furthermore, decision-makers with a higher level of knowledge are more likely to move on to the subsequent stage. A shift from passive exposure to proactive search takes place through the process, but this shift is less pronounced among risk-averse decision-makers who continuously request proactive influences. The discussions revealed largely unexploited potential regarding the stakeholders local utilities and local governments who are perceived as independent, trustworthy and credible stakeholders. Public stakeholders must fulfill their responsibility in achieving climate goals by advising, assisting, and financing services for low-carbon technology adoption at the local level. Supporting community initiatives through political frameworks appears to be another promising step.
    Date: 2021–04
  26. By: Poonam Ravindranath; Paolo Abarcar; Cullen Seaton; Candace Miller; Arif Mamun
    Abstract: The Mt. Coffee Support Activity, addresses environmental and social risks associated with the rehabilitation of Mt. Coffee Hydropower Plant and aims to increase productive uses of electricity.
    Keywords: Liberia, MCC, water, pipeline, LWSC, evaluation
  27. By: Giulia Brancaccio (Cornell University); Myrto Kalouptsidi (Harvard University); Theodore Papageorgiou (Boston College)
    Abstract: In this paper we investigate the importance of fuel costs in shaping world trade. We use AIS data on ship locations and transaction-level shipping prices, along with a dynamic model describing the world shipping industry, to measure the elasticity of trade with respect to ship fuel costs. We find that the average estimated elasticity is 0.35, but ranges from 0.1 to about 1.2 depending on the level of the fuel cost. The pass-through of fuel costs to transport costs is low, at 0.17. Strikingly, the trade elasticity features a pronounced asymmetry in low vs. high oil prices. As fuel costs decline, the elasticity plateaus and further declines have little impact on trade. This “flattening out” of the elasticity is attributed to the equilibrium of the transportation sector and in particular the changes in the relative bargaining positions of ships and exporters. Finally, we use the estimated elasticity to assess the importance of ship design on trade flows: if the large fuel efficiency gains achieved in the 1980s had not been realized, trade would be 12% lower today.
    Keywords: fuel costs, shipping, world trade, trade elasticity, oil prices, fuel efficiency, fuel cost pass-through
    JEL: F1 F64 L90 R4
    Date: 2021–04–24
  28. By: Wietschel, Martin; Bekk, Anke; Breitschopf, Barbara; Boie, Inga; Edler, Jakob; Eichhammer, Wolfgang; Klobasa, Marian; Marscheider-Weidemann, Frank; Plötz, Patrick; Sensfuß, Frank; Thorpe, Daniel; Walz, Rainer
    Abstract: Opportunities and challenges when importing green hydrogen and synthesis products
    Date: 2020
  29. By: Crampes, Claude; Léautier, Thomas-Olivier
    Abstract: To encourage building renovations and the replacement of old energy-consuming equipment, some governments have introduced a system of white certificates requiring large producers and distributors of natural gas, electricity and fuel to prove that they have financed energy-saving operations. The system is proving to be much less efficient than expected because energy saving works are "credence goods", which means that their quality can be correctly measured neither before nor after their achievement. Because of this informational bias, white certificates encourage economically inefficient works. Despite this, they are favored by the public authorities because they belong to the panoply of nonpunitive, non-fiscal, decentralized and local job-creating micro-policies.
    JEL: D13 D82 L97 Q48 Q51
    Date: 2021–04–16
  30. By: Michal Brzezinski
    Abstract: We estimate the short- to medium term impact of six major past pandemic crises on the CO2 emissions and energy transition to renewable electricity. The results show that the previous pandemics led on average to a 3.4-3.7% fall in the CO2 emissions in the short-run (1-2 years since the start of the pandemic). The effect is present only in the rich countries, as well as in countries with the highest pandemic death toll (where it disappears only after 8 years) and in countries that were hit by the pandemic during economic recessions. We found that the past pandemics increased the share of electricity generated from renewable sources within the fiveyear horizon by 1.9-2.3 percentage points in the OECD countries and by 3.2-3.9 percentage points in countries experiencing economic recessions. We discuss the implications of our findings in the context of CO2 emissions and the transition to renewable energy in the post-COVID-19 era.
    Date: 2021–04
  31. By: Loretta Mastroeni; Greta Quaresima; Pierluigi Vellucci
    Abstract: In this article we analyse the oil-food price co-movement and its determinants in both time and frequency domains, using the wavelet analysis approach. Our results show that the significant local correlation between food and oil is only apparent. This is mainly due to the activity of commodity index investments and, to a lower extent, to the increasing demand from emerging economies. Furthermore, we employ the wavelet entropy to assess the predictability of the time series under consideration. We find that some variables share with both food and oil a similar predictability structure. These variables are those that mostly co-move with both oil and food. Some policy implications can be derived from our results, the most relevant being that the activity of commodity index investments is able to increase correlation between food and oil. This activity generates highly integrated markets and an increasing risk of joint price movements which is potentially dangerous in periods of economic downturn and financial stress. In our work we suggest that governments should also provide subsidy packages based on the commodity traded in commodity indices to protect producers and consumers from adverse price movements due to financial activity rather than lack of supply or demand.
    Date: 2021–04
  32. By: CANFORA Paolo (European Commission - JRC); DRI Marco (European Commission - JRC); POLIDORI Olivier; SOLZBACHER Clara; ARRANZ PADILLA Maria
    Abstract: The European Union has introduced a new policy tool to clarify which investments are to be considered environmentally sustainable: a taxonomy of environmentally sustainable economic activities. Regulation (EU) 2020/852 of the European Parliament and of the Council (the ‘Taxonomy Regulation’), defines the framework for the development of the EU taxonomy. It empowers the European Commission to define the taxonomy, i.e. the list of economic activities and associated technical screening criteria defining the required level of environmental performance. The European Commission will adopt the list of technical screening criteria in delegated acts. This report is an input to the work underlying the first delegated act under the Taxonomy Regulation, relating to activities making a substantial contribution to the first two objectives set out in the Regulation: climate change mitigation and climate change adaptation. This first delegated act should be adopted by the European Commission at the beginning of 2021. Building on the experience gained from working with the Technical Expert Group on Sustainable Finance (TEG) and on the set of recommendations the TEG provided to the European Commission, this report elaborates the concept of substantial contribution to an environmental objective and classifies the types of substantial contribution that an economic activity can make. It then illustrates which approaches can be used to define substantial contribution to climate change mitigation and elaborates on the conditions of applicability of each suggested approach. The requirements for technical screening criteria that are outlined in Article 19 of the Taxonomy Regulation are the basis for evaluating the suitability of each specific approach. This report also discusses the elements to be considered for setting the level of ambition of the technical screening criteria and how the technical screening criteria can result from combining the different elements analysed.
    Keywords: Sustainable finance, EU taxonomy, sustainable economy activities, substantial contribution, climate change mitigation
    Date: 2021–04
  33. By: Martin, Elliot PhD; Stocker, Adam; Nichols, Aqshems; Shaheen, Susan PhD
    Abstract: The study found that roundtrip carsharing in NYC mostly serves as a substitute for car rental, other personal vehicle modes, and personal vehicle ownership. The analysis showed that the broader pilot program had a modest impact on user behavior through carsharing (i.e., reduced vehicle ownership, reduced VMT, and mode shift). It also found that the pilot program likely expanded the membership base of carsharing to demographic cohorts that are traditionally underrepresented in carsharing populations (i.e., increased participation by lower education levels, lower household incomes, minority demographics). The study also examined vehicle ownership impacts and changes in vehicle miles traveled (VMT) and greenhouse gas (GHG) emissions. Analysis of survey and activity data indicated that 7% of NYC carsharing members avoided a car purchase, and 0.61% of members got rid of a car they already owned due to carsharing. Across the membership base, VMT was reduced by 7% and GHG emissions were reduced by 6%. These findings showed that carsharing reduced VMT and delivered associated environmental benefits within NYC, and more broadly had a substantive impact on travel behavior among members in form of mode shift away from personal automotive modes.
    Keywords: Engineering
    Date: 2021–02–01
  34. By: Marchioni, Andrea; Magni, Carlo Alberto; Baschieri, Davide
    Abstract: In this work we illustrate a simple logical framework serving the purpose of measuring value creation in a real-life solar photovoltaic project, funded with a lease contract, a loan contract and internal financing (i.e., withdrawal from liquid assets). We use the projected accounting data to compute the value created. We assess the project from both an investment perspective (operating assets and liquid assets) and a financing perspective (debt and equity). Furthermore, focusing on value creation for equityholders, we calculate the expected contribution on shareholders’ wealth increase of operating and financing activity. In particular, we highlight the role of the distribution policy in financial modeling by describing the strict logical connections between estimated data and financial decisions.
    Keywords: photovoltaic solar energy; project evaluation; net present value; distribution policy
    JEL: C60 C63 C67 G00 G30 G31 G32 G35 M41 O13
    Date: 2020–11–12
  35. By: Emanuel Kohlscheen; Richhild Moessner; Előd Takáts
    Abstract: We use a comprehensive database of 121 countries over the 1971-2016 period to study how macroeconomic factors drive carbon (carbon-dioxide) emissions. For this purpose, dynamic panel regressions are estimated. Carbon emissions rise with economic development, manufacturing activity, urbanization and increasingly with economic growth. In electricity generation, the use of coal, and to a lesser degree of oil, is associated with higher carbon emissions, while renewable energy use is already associated with lower national emissions in advanced economies. We also uncover a non-linearity: economic overheating is particularly harmful when coal use is more intensive. The results suggest that mitigating economic cycles might also reduce carbon emissions.
    Keywords: carbon dioxide, climate change, coal, emissions, energy, environment, growth, pollution, urbanisation
    JEL: O40 O44 Q00 Q40 Q50
    Date: 2021–04
  36. By: Xuebing Yao (China University of Petroleum); Xu Tang (China University of Petroleum); Arash Farnoosh (IFPEN - IFP Energies nouvelles - IFPEN - IFP Energies nouvelles, IFP School); Cuiyang Feng (BNU - Beijing Normal University)
    Abstract: Water scarcity problem has become a major constraint in energy development. In this paper, we calculated virtual water flows and virtual water scarcity risk transfers driven by interprovincial energy consumption in China by using multi-regional input-output analysis. The results of virtual water scarcity risk transfers show that major virtual water scarcity risk importers will be the "victims" suffering the consequences of increasing virtual water scarcity risks in national energy system. For major virtual water scarcity risk exporters, they will transfer virtual water scarcity risks to downstream provinces along energy supply chains, threatening the stability of national energy system. The promotion of energy policies and the energy consumption of developed regions make the water-deficient northwest regionsexport a large amount of water resources to the east and south regions.Therefore, it is necessary to fully consider local water scarcity and evaluate the impact on water environment before construction of energy bases. Our findings can be used to provide reference value for policymakers to develop new energy strategies and manage water resources sustainably.
    Keywords: virtual water scarcity risk,water footprint,energy consumption,multi-regional input-output analysis
    Date: 2021–01
  37. By: Fiona Burlig; Louis Preonas; Matt Woerman
    Abstract: Groundwater is a key resource for agricultural production globally. Increasingly rapid aquifer drawdowns—as well as the policies intended to increase their sustainability—increase costs to agricultural producers, with unknown consequences. This paper provides the first large-scale empirical estimates of how farmers respond to changes in groundwater costs in one of the world's most valuable agricultural areas: California. Using rich administrative data and exogenous variation in the price of electricity, a key input into groundwater extraction, we find that farmers are very price responsive: we estimate large price elasticities of demand for electricity (-1.17) and groundwater (-1.12). We demonstrate that crop switching and fallowing are the main channel through which farmers respond to increases in groundwater costs. Using a static discrete choice model, we estimate that a counterfactual $10 per-acre-foot groundwater tax—a level consistent with California's sustainability targets—would lead farmers to reallocate 3.9 percent of cropland, with increases in fallowing and high-value fruit and nut perennials, and decreases in annual crops and low-value perennials.
    JEL: Q15 Q25 Q41
    Date: 2021–04
  38. By: Jan Fagerberg (Center for Technology, Innovation and Culture, University of Oslo)
    Abstract: This paper focuses on the role of demand-oriented innovation policies in supporting the global green shift. Three specific cases, all from Europe, in which change has been very quick indeed, are considered: Wind energy in Denmark, the German Energiewende and electrical cars in Norway. The emphasis is particularly on the nature of the policies that were adopted, how they came about, and their impacts on a national as well as global scale. It is shown that demand-oriented innovation policies played a decisive role in all three cases and contributed to encourage (green) innovation, create new jobs and significantly speed up the transition. Moreover, these policies had very important global repercussions.
    Date: 2021–04
  39. By: Quentin Plantec (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique); Pascal Le Masson; Benoît Weil
    Date: 2021–07
  40. By: Evert Reins
    Abstract: This paper studies how subsidies for solar systems can lead to second-degree moral hazard - the impulse of installers to increase prices and/or reduce labor input when customers receive subsidies. Employing an instrumental variable strategy using plausibly exogenous variation in the size of subsidy levels to address concerns about self-selection of installers into specific subsidy levels, I quantify the impact of subsidy levels on total costs and electricity output of solar systems in California. The results are consistent with hypothesized drivers of second-degree moral hazard. First, larger subsidy levels are associated with a cost increase when customers receive unconditional upfront subsidies as compared to output-based subsidies. Second, stricter verification rules reduce costs. Third, the association of lager subsidy levels and increased costs is particularly pronounced when third-parties own the solar system and thus receive the subsidy. Finally, costs are larger for government customers and lower for non-profit customers.
    Keywords: Solar systems; Credence goods; Subsidies; Asymmetric information; Second-degree moral hazard.
    JEL: H23 H32 H76 D82 Q42 C26
    Date: 2021–04–20
  41. By: Alhassan A. Karakara (University of Cape Coast, Ghana); Evans S. Osabuohien (CEPDeR, Covenant University, Ota, Nigeria); Simplice A. Asongu (Yaoundé, Cameroon)
    Abstract: Purpose – This paper analyses the extent to which households are deprived (or otherwise) of clean energy sources in Ghana. Design/methodology/approach – It engages the Ghana Demographic and Health Survey data (GDHS VI). Three different energy deprivation indicators were estimated: cooking fuel deprivation, lighting deprivation and indoor air pollution. The empirical evidence is based on logit regressions that explain whether households are deprived or not. Findings – The results show that energy deprivation or access is contingent on the area of residence. Energy access and deprivation in Ghana show some regional disparities, even though across every region, the majority of households use three fuel types: Liquefied Petroleum Gas (LPG), charcoal and wood cut. Increases in wealth and education lead to reduction in the likelihood of being energy deprived. Thus, efforts should be geared towards policies that will ensure households having access to clean fuels to reduce the attendant deprivations and corresponding effects of using dangerous or dirty fuels. Originality/value – This study complements the extant literature by analysing the extent to which households are deprived (or otherwise) of clean energy sources in Ghana.
    Keywords: Energy deprivation, Ghana, Households, Sustainable development
    JEL: O13 P28 Q42
    Date: 2021–01
  42. By: Candace Miller; Kristine Bos; Poonam Ravindranath; Paolo Abarcar; Arif Mamun; Matthew Spitzer; Jeremy Page; Laura Meyer; Joshua Claxton; Jonathon Cook; Sara Bryk
    Abstract: We synthesized interim findings for activities that have been underway for several years and for households and businesses that have been connected to electricity for years. We also analyzed baseline findings for a study of households and businesses that have not yet connected to the grid.
    Keywords: energy, electricity, grid electricity, reform, capacity building, Liberia, Government of Liberia, Liberia Electricity Corporation, hydropower, utility, regulatory environment, performance evaluation
  43. By: Hansjörg Blöchliger; Sigita Strumskyte
    Abstract: This paper provides an overview on Lithuania’s environment and environmental policy. Environmental performance has improved since the mid-2000s. Greenhouse gas emissions declined and decoupled from growth over the past decade, yet per capita emissions increased. Transport and energy are the main sources of emissions and pollution, followed by agriculture and industry. There was much improvement in waste management practices, with a significant reduction of landfills. Yet Lithuania has the highest mortality rate from exposure to air pollution in the OECD. Energy efficiency is a concern, particularly in the housing sector. Pricing of environmentally damaging activities is low. Lithuania sets no CO2 tax, has one of the lowest excise duties on motor fuel, petrol and diesel in the OECD, and has one of the largest ‘diesel differentials’, the gap in the price of diesel versus gasoline. It also provides among the highest subsidies to fossil fuels. In 2020, the country introduced a purchase tax for passenger vehicles which takes into account emissions. Against this background, the country has scope for increasing fossil fuel taxes and removing subsidies, to reach its ambitious environmental and climate management objectives and the net-zero carbon emission target by 2050.
    Keywords: carbon tax, climate change, energy, environmental policy, greenhouse gas emissions, Lithuania, pollution, transport
    JEL: Q20 Q28 Q58
    Date: 2021–04–26
  44. By: Saptorshee Kanto Chakraborty (Paris School of Economics); Massimiliano Mazzanti (University of Ferrara; SEEDS, Italy)
    Abstract: Theories of the association between environmental degradation and economic growth are not new and are very important under current global conditions to understand and tackle challenges like decarbonisation and the circular economy among others. Countries must balance growth with environmental degradation, and in the extensive literature that deals with this association, applied economists have largely used the environmental Kuznets curve (EKC) setting, with different empirical methodologies in various data settings. However, under a panel data framework, researchers often assume that countries are similar when dealing with unobservable heterogeneity. The papers exploits one of the methodologies to unveil heterogeneity to determine groupings from the data. We consider the countries that account for nearly 80% of global carbon dioxide emissions and apply the EKC setting. Using a Classifier Lasso framework that applies latent group methodologies to address unobservable heterogeneity, we find for two distinct groups substantial heterogeneity in types of energy consumption (renewable and total) with both positive and negative effects observed in the data. The results provide a new perspective on potential impacts illustrated in the EKC literature that might be relevant to policy makers.
    Keywords: EKC, Group Lasso, Latent structure, Unobserved heterogeneity, decarbonisation
    Date: 2021–05
  45. By: Davide Ferrari (Free University of Bozen-Bolzano, Italy); Francesco Ravazzolo (Free University of Bozen-Bolzano, Italy; BI Norwegian Business School, Norway); Joaquin Vespignani (University of Tasmania, Tasmanian School of Business and Economics, Australia)
    Abstract: This paper focuses on forecasting quarterly nominal global energy prices of commodities, such as oil, gas and coal, using the Global VAR dataset proposed by Mohaddes and Raissi (2018). This dataset includes a number of potentially informative quarterly macroeconomic variables for the 33 largest economies, overall accounting for more than 80% of the global GDP. To deal with the information on this large database, we apply dynamic factor models based on a penalized maximum likelihood approach that allows to shrink parameters to zero and to estimate sparse factor loadings. The estimated latent factors show considerable sparsity and heterogeneity in the selected loadings across variables. When the model is extended to predict energy commodity prices up to four periods ahead, results indicate larger predictability relative to the benchmark random walk model for 1-quarter ahead for all energy commodities and up to 4 quarters ahead for gas prices. Our model also provides superior forecasts than machine learning techniques, such as elastic net, LASSO and random forest, applied to the same database.
    Keywords: Energy Prices; Forecasting; Dynamic Factor model; Sparse Estimation; Penalized Maximum Likelihood.
    JEL: C1 C5 C8 E3 Q4
    Date: 2021–04
  46. By: Maxime Schenkery (IFPEN - IFP Energies nouvelles - IFPEN - IFP Energies nouvelles, IFP School); Jacques Millery (IFP School)
    Abstract: Dans notre Point de Vue publié au printemps 2020 (« Certificats : marier reprise économique et transition écologique »), nous nous étions attachés à montrer tout l'intérêt du mécanisme de certificats. Depuis, les travaux sur la forme que devra prendre la 5ème période de CEE ont continué, suscitant bien des débats, et aboutissant à une première série de propositions rendue publique début février 2021. Cette première série de propositions est l'occasion pour nous de continuer notre analyse, en regardant notamment si l'esprit de celle-ci va ou non dans le sens de la logique « couplage reprise / transition » qui nous paraissait intéressante au printemps dernier.
    Date: 2021–03
  47. By: Ari Pramono; Harmen Oppewal
    Abstract: This paper introduces on-the-way choice of retail outlet as a form of convenience shopping. It presents a model of on-the-way choice of retail outlet and applies the model in the context of fuel retailing to explore its implications for segmentation and spatial competition. The model is a latent class random utility choice model. An application to gas station choices observed in a medium-sized Asian city show the model to fit substantially better than existing models. The empirical results indicate consumers may adopt one of two decision strategies. When adopting an immediacy-oriented strategy they behave in accordance with the traditional gravity-based retail models and tend to choose the most spatially convenient outlet. When following a destination-oriented strategy they focus more on maintaining their overall trip efficiency and so will tend to visit outlets located closer to their main destination and are more susceptible to retail agglomeration effects. The paper demonstrates how the model can be used to inform segmentation and local competition analyses that account for variations in these strategies as well as variations in consumer type, origin and time of travel. Simulations of a duopoly setting further demonstrate the implications.
    Date: 2021–04
  48. By: Ivan Faiella (Bank of Italy); Luciano Lavecchia (Bank of Italy)
    Abstract: This paper proposes a novel methodology to estimate the demand and elasticity of electricity, heating, and private transport fuels by aligning the microdata of the Italian Household Budget Survey with several external sources. These estimates are used to evaluate the effects of a set of one-off carbon taxes on energy demand and expenditure. According to our simulations, the increase in energy prices prompted by carbon taxation would decrease energy demand for all uses considered. Our simulations suggest that the effects of carbon taxation are generally regressive: expenditure would increase more for poorer households while their energy demand is compressed. The carbon tax could achieve a significant decrease in GHG emissions and raise revenues, which could be recycled to compensate vulnerable households or reinvested to support the energy transition.
    Keywords: household energy demand, Italy, climate change, carbon tax, energy poverty
    JEL: Q41 Q54 Q58
    Date: 2021–04
  49. By: Georgii Riabov; Aleh Tsyvinski
    Abstract: The paper develops a general methodology for analyzing policies with path-dependency (hysteresis) in stochastic models with forward looking optimizing agents. Our main application is a macro-climate model with a path-dependent climate externality. We derive in closed form the dynamics of the optimal Pigouvian tax, that is, its drift and diffusion coefficients. The dynamics of the present marginal damages is given by the recently developed functional Itô formula. The dynamics of the conditional expectation process of the future marginal damages is given by a new total derivative formula that we prove. The total derivative formula represents the evolution of the conditional expectation process as a sum of the expected dynamics of hysteresis with respect to time, a form of a time derivative, and the expected dynamics of hysteresis with the shocks to the trajectory of the stochastic process, a form of a stochastic derivative. We then generalize the results. First, we propose a general class of hysteresis functionals that permits significant tractability. Second, we characterize in closed form the dynamics of the stochastic hysteresis elasticity that represents the change in the whole optimal policy process with an introduction of small hysteresis effects. Third, we determine the optimal policy process.
    JEL: E0 H23 Q4 Q5 Q54
    Date: 2021–04
  50. By: Rolf Golombek; Mads Greaker; Snorre Kverndokk; Lin Ma
    Abstract: We model the value chain of Carbon Capture, transport and Storage (CCS) by focusing on the decisions taking by actors involved in either capture, transport or storage of CO2. Plants emitting CO2 are located along a Salop circle. If these invest in carbon capture facilities, the captured CO2 is transported to terminals, which again transport the received amount of CO2 to a storage site. We study different market structures, all suffering from market imperfections such as network effects, market power and economics of scale in addition to the environmental externality from emissions. Thus, to ensure socially optimal CCS investments, the government must use more than one policy instrument. A numerical specification of the model finds that the actually observed CCS investments are much lower than what is socially optimal simply because the price of CO2 emissions has been far too low. If the carbon tax is set equal to the social cost of carbon and is sufficiently high to justify CCS investments, but the government does not use other instruments to correct for the other market imperfections, CCS investments differ significantly between the alternative market structures. In particular, investment in terminals may be too high, while investment in capture facilities could still be too low.
    Keywords: carbon capture and storage, indirect network effects, Salop circle, carbon tax, market imperfections, tipping points
    JEL: H23 L13 L51 Q35 Q38
    Date: 2021

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