|
on Energy Economics |
| By: | Karp, Larry; Traeger, Christian |
| Abstract: | We introduce a "smart" cap and trade system that eliminates the welfare costs of asymmetric information ("uncertainty"). This cap responds endogenously to technology or macroeconomic shocks, relying on the market price of certificates to aggregate information. It allows policy makers to modify existing institutions to achieve more efficient emission reductions. The paper also shows that the efficient carbon price is more sensitive to technological innovations than usually assumed. The lasting impact and slow diffusion of these innovations typically make the optimal carbon price a much steeper function of emissions than suggested by the social cost of carbon. |
| Keywords: | Asymmetric information; climate change; Integrated assessment; pollution; quantities; Regulation; taxes; technology diffusion; uncertainty |
| JEL: | D80 H20 Q00 Q50 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15941&r= |
| By: | Thomas Cortade (MRE - Montpellier Recherche en Economie - UM - Université de Montpellier, UM - Université de Montpellier); Jean-Christophe Poudou (MRE - Montpellier Recherche en Economie - UM - Université de Montpellier, UM - Université de Montpellier) |
| Abstract: | In this paper, we analyze how new models of exchanges in the electricity sector may be viable and yield incentives to invest in decentralized domestic production units based on renewable energy sources. We try to identify the factors and the elements in the platform design that influence participation of prosumers in peer-to-peer energy exchanges in local microgrids. Compared to the no-platform configuration, we find that a pure dealing platform exhibits no less incentives to install domestic production units. However, this main result is challenged by considering several relevant features for peer-to-peer energy exchanges. |
| Keywords: | electricity,trading platform,renewables,Peer-to-peer |
| Date: | 2021–04–29 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03212480&r= |
| By: | Grafström, Jonas (The Ratio Institute); Poudineh, Rahmat (Oxford Institute for Energy Studies) |
| Abstract: | The learning curve concept, which relates historically observed reductions in the cost of a technology to the number of units produced or the capacity cumulatively installed, has been widely adopted to analyse the technological progress of renewable resources, such as solar PV and wind power, and to predict their future penetration. Learning curves were originally an empirical tool to evaluate learning-by-doing in manufacturing, and the jump to analysis of country-level technological change in renewable energy is an extension that requires careful consideration. This paper provides a review of the problems associated with learning curves for solar and wind power technologies. Issues such as whether the past cost reductions affect the future, learning curve specification problems, changing price ratios and econometric issues are discussed. Learning curves have a place in research, but there are several pitfalls that researchers should be careful not to overlook. |
| Keywords: | learning curve; learning rate; energy technology; wind power; solar power |
| JEL: | E61 O32 Q20 Q58 |
| Date: | 2021–05–03 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0347&r= |
| By: | Eicke, Anselm; Ruhnau, Oliver; Hirth, Lion |
| Abstract: | Frequency stability requires equalizing supply and demand for electricity at short time scales. Such electricity balancing is often understood as a sequential process in which random shocks, such as weather events, cause imbalances that system operators close by activating balancing reserves. By contrast, we study electricity balancing as a market where the equilibrium price (imbalance price) and quantity (system imbalance) are determined by supply and demand. System operators supply imbalance energy by activating reserves; market parties that, deliberately or not, deviate from schedules create a demand for imbalance energy. The incentives for deliberate strategic deviations emerge from wholesale market prices and the imbalance price. We empirically estimate the demand curve of imbalance energy, which describes how sensitive market parties are to imbalance prices. To overcome the classical endogeneity problem of price and quantity, we deploy instruments derived from a novel theoretical framework. Using data from Germany, we find a decline in the system imbalance by 2.2 MW for each increase in the imbalance price by EUR 1 per MWh. This significant price response is remarkable because the German regulator prohibits strategic deviations. We also estimate cross-market equilibriums between intraday and imbalance markets, finding that a shock to the imbalance price triggers a subsequent adjustment of the intraday price. |
| Keywords: | Electricity Balancing,Intraday electricity market,Imbalance energy |
| JEL: | Q41 L51 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:233852&r= |
| By: | Arega Getaneh Abate; Rossana Riccardi; Carlos Ruiz |
| Abstract: | The European Union Emission Trading Scheme (EU ETS) is a cornerstone of the EU's strategy to fight climate change and an important device for plummeting greenhouse gas (GHG) emissions in an economically efficient manner. The power industry has switched to an auction-based allocation system at the onset of Phase III of the EU ETS to bring economic efficiency by negating windfall profits that have been resulted from grandfathered allocation of allowances in the previous phases. In this work, we analyze and simulate the interaction of oligopolistic generators in an electricity market with a game-theoretical framework where the electricity and the emissions markets interact in a two-stage electricity market. For analytical simplicity, we assume a single futures market where the electricity is committed at the futures price, and the emissions allowance is contracted in advance, prior to a spot market where the energy and allowances delivery takes place. Moreover, a coherent risk measure is applied (Conditional Value at Risk) to model both risk averse and risk neutral generators and a two-stage stochastic optimization setting is introduced to deal with the uncertainty of renewable capacity, demand, generation, and emission costs. The performance of the proposed equilibrium model and its main properties are examined through realistic numerical simulations. Our results show that renewable generators are surging and substituting conventional generators without compromising social welfare. Hence, both renewable deployment and emission allowance auctioning are effectively reducing GHG emissions and promoting low-carbon economic path. |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2104.15062&r= |
| By: | Traeger, Christian |
| Abstract: | The paper discusses optimal carbon taxation in an analytic quantitative integrated assessment model (IAM). The model links IAM components and parametric assumptions directly to their policy impacts. The paper discusses the distinct tax impact of carbon versus temperature dynamics and uses the see-through model to illustrate various aspects of IAM calibrations including the differentiation between consumption and investments goods. Novel to analytic IAMs are the explicit temperature dynamics, a general economy, energy sectors including capital, various degrees of substitutability across energy sources, an approximation of capital persistence, and objective functions that include CES preferences and population weighting. ACE opens the door to tractable forward-looking stochastic modeling and dynamic strategic interactions in complex IAMs, explored in accompanying work. |
| Keywords: | capital persistence; carbon cycle; carbon tax; climate change; climate sensitivity; Integrated assessment; population weighting; Social cost of carbon; technological progress; Temperature |
| JEL: | D61 D80 E13 H23 H43 Q54 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15968&r= |
| By: | McLean, Sheldon; Charles, Don; Rajkumar, Antonio |
| Abstract: | This study explores the oil and gas value chain by first examining the oil and gas taxation framework and assessing the mechanics of the industry’s natural creation of opportunities for transfer pricing. The results of the analysis are then used to identify the most appropriate regime with which to address transfer pricing and provide sound policy recommendations for its implementation. Consequently, the study posits that inherent pricing risk can be mitigated by developing an appropriate fiscal and legislative framework complemented by the designation of a competent revenue authority to ensure that multinationals set fair hydrocarbon prices. Further research possibilities however remain, particularly by expanding the focus of the analysis to include Latin American economies and employing a game theory framework. |
| Keywords: | INDUSTRIA PETROLERA, INDUSTRIA DEL GAS, PRECIOS DE TRANSFERENCIA, MERCADOS, TRIBUTACION, INGRESOS, RIESGO, POLITICA FISCAL, DESARROLLO ECONOMICO, PETROLEUM INDUSTRY, GAS INDUSTRY, TRANSFER PRICING, MARKETS, TAXATION, INCOME, RISK, FISCAL POLICY, ECONOMIC DEVELOPMENT |
| Date: | 2021–04–28 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col033:46813&r= |
| By: | Elise Grieg (CER–ETH – Center of Economic Research at ETH Zurich, Switzerland) |
| Abstract: | To shed light on the political inertia around environmental legislation, I study the response of US senators to public opinion while controlling for special interest pressure. I combine data on public opinion (PO) on climate change---estimated by multilevel regression with poststratification---with campaign contributions from the extractive industries to indicate special interest (SI) influence, and use senator fixed effects, instrumental variables and the timing of senate elections for identification. PO has a strong impact on environmental legislation. The effects are different for the two parties: Republicans react to PO in election cycles, whereas Democrats are responsive through their whole term. The responsiveness of elected officials to environmental opinion is surprising: while Americans often favour envi- ronmental regulation in general, they tend to consider it as of low importance. I discuss possible explanations. |
| Keywords: | Public opinion, campaign finance, political economy, climate change |
| JEL: | D72 Q54 Q58 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:21-349&r= |
| By: | Michael Finus (University of Graz, Austria); Francesco Furini (University of Hamburg, Germany and Università Ca’ Foscari Venezia, Italy); Anna Viktoria Rohrer (University of Graz, Austria) |
| Abstract: | We analyze the paradox of cooperation, as established by Barrett (1994), and later reiterated by many others, in a more general framework. That is, we show that stable coalitions are either small or if they are large, the potential gains from cooperation are small. First, we argue that the extension to a mitigation-adaptation game is a generalization of Barrett’s pure mitigation game. Second, we consider for this extension not only the Nash-Cournot scenario, as in Bayramoglu et al. (2018), but also the Stackelberg scenario. Third, we show generally that if mitigation levels in different countries are strategic substitutes, stable coalitions are larger in the Stackelberg than in the Nash-Cournot scenario. Fourth, this is reversed if mitigation levels are strategic complements, which is possible if the strategic interaction between mitigation and adaptation is sufficiently strong. Fifth, for all possible combination of assumptions, we demonstrate that the paradox of cooperation is robust, except if mitigation and adaptation were strategic complements, which we argue is an assumption not supported by empirical evidence. |
| Keywords: | Climate change; mitigation-adaptation game; international environmental agreements; paradox of cooperation; Nash-Cournot versus Stackelberg scenario. |
| JEL: | C72 F12 F18 H23 Q58 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:grz:wpaper:2021-04&r= |
| By: | Yue-Jun (School of Business, Hunan University, Changsha, Hunan 410082, China); Ting Liang (School of Business, Hunan University, Changsha, Hunan 410082, ChinaAuthor-Name: Weijie Zhai); Zongwu Cai (Department of Economics, The University of Kansas, Lawrence, KS 66045, USA) |
| Abstract: | This paper investigates whether technological innovation can bring some economic and environmental benefits to energy firms. By analyzing data for energy firms in China from 2009 to 2017, this paper finds that technological innovation is not always beneficial to the multi-interests of energy firms. First, technological innovation does not necessarily fully promote the benefit-based performance of energy firms in China. Actually, technological innovation increases the excess returns but inhibits the operational efficiency of energy firms, and has no a significant impact on the firm value of energy firms. Moreover, technological innovation exacerbates the crash risks of energy firms, which is not conductive to the stability of energy financial market. Second, technological innovation may significantly reduce carbon emissions intensity and play an important role in improving the environmental performance of energy firms in China. Finally, a sharp rise in energy prices may inhibit technological innovation activities, and thus influencing the performance of energy firms. |
| Keywords: | Technological innovation; Energy firms; Firm performance; Truncated regression model; Treatment effect model |
| JEL: | Q55 M14 O13 L25 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:kan:wpaper:202112&r= |
| By: | Asongu, Simplice; Odhiambo, Nicholas |
| Abstract: | The study investigates linkages between financial development, income inequality and renewable energy consumption from 39 countries in Sub-Saharan Africa. The empirical evidence is based on data for the period 2004-2014, Generalized Method of Moments (GMM) and Quantile Regressions (QR). The GMM results show that financial development unconditionally promotes renewable energy consumption while income inequality counteracts the underlying positive effect. The QR results reveal that the GMM findings only withstand empirical validity in bottom quantiles of the renewable energy consumption distribution. In order to increase room for policy implications for the promotion of renewable energy consumption, critical masses of income inequality that should not be exceeded are computed for bottom quantiles of the renewable energy consumption distribution while income inequality thresholds that should be exceeded are computed for top quantiles of the renewable energy consumption distribution. The study reconciles two strands of the literature. Theoretical, practical and policy implications are discussed. |
| Keywords: | Renewable energy; Inequality; Finance; Sub-Saharan Africa; Sustainable development |
| JEL: | H10 O11 O55 Q20 Q30 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107510&r= |
| By: | Asongu, Simplice; Odhiambo, Nicholas |
| Abstract: | The study investigates conclusions from the scholarly literature that for low and middle-income countries, higher income inequality is linked with lower carbon dioxide (CO2) emissions. Using a sample of 39 sub-Saharan countries consisting of lower- and middle-income countries, this study investigates how increasing inequality affects renewable energy consumption. Three income inequality indicators are used, namely: the Gini coefficient, the Palma ratio and Atkinson index. The empirical evidence is based on quadratic Tobit regressions. The investigated assumption is only partially valid because a net positive impact is apparent only in one of the three income inequality variables used in the study. Hence, it is difficult to establish whether the inequality or equality hypothesis underpinning the nexus between income inequality and renewable energy consumption hold for Sub-Saharan Africa. However, based on the significant results in terms of the threshold, the equality hypothesis is valid when the Atkinson index is below a threshold of 0.6180 while the inequality hypothesis becomes valid when the Atkinson index exceeds the threshold of 0.6180. Hence, as the main policy implication, for the equitable redistribution of income to be promoted and, therefore, for policies that favor income inequality for renewable energy consumption not to be encouraged, policy makers should keep the Atkinson index below a threshold of 0.6180. An implication for Europe and/or high income countries is provided, notably, that the equality hypothesis on the nexus between income inequality and CO2 emissions may not withstand empirical scrutiny but contingent on: (i) the measurements of income inequality and (ii) inequality thresholds when a specific income inequality measurement is retained. |
| Keywords: | Renewable energy; Inequality; Sub-Saharan Africa; Sustainable development |
| JEL: | H10 O11 O55 Q20 Q30 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107539&r= |
| By: | Yingfei Mu; Edward A. Rubin; Eric Zou |
| Abstract: | Regulators often rely on self-reported data to determine compliance. Tolerance for missingness in self-monitoring data may create incentives for local agents to strategically decide when (not) to monitor regulated activities. This paper builds a framework to detect whether local governments skip air pollution monitoring when they expect air quality to deteriorate. We infer this expectation from air quality alerts – public advisories based on local governments’ own pollution forecasts – and test whether monitors’ sampling rates fall when these alerts occur. We first use this method to test an individual pollution monitor in Jersey City, NJ, suspected of a deliberate shutdown during the 2013 “Bridgegate” traffic jam. Consistent with strategic shutdowns, this monitor’s sampling rate drops by 33% on days that Jersey City issues pollution alerts. Building on large-scale inference tools, we then apply the method to test over 1,300 monitors across the U.S., finding at least 14 metro areas with clusters of monitors showing similar strategic behavior. We discuss imputation methods and policy responses that may help deter future strategic monitoring. |
| JEL: | C12 H77 Q53 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28735&r= |
| By: | Abrell, Jan; Kosch, Mirjam; Rausch, Sebastian |
| Abstract: | While carbon taxes are generally seen as a rational policy response to climate change, knowledge about their performance from an expost perspective is still limited. This paper analyzes the emissions and cost impacts of the UK CPS, a carbon tax levied on all fossil-fired power plants. To overcome the problem of a missing control group, we propose a policy evaluation approach which leverages economic theory and machine learning for counterfactual prediction. Our results indicate that in the period 2013-2016 the CPS lowered emissions by 6.2 percent at an average cost of €18 per ton. We find substantial temporal heterogeneity in tax-induced impacts which stems from variation in relative fuel prices. An important implication for climate policy is that in the short run a higher carbon tax does not necessarily lead to higher emissions reductions or higher costs. |
| JEL: | C54 Q48 Q52 Q58 L94 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:21039&r= |
| By: | Ioannis Tikoudis (OECD); Luis Martinez (International Transport Forum); Katherine Farrow (OECD); Clara García Bouyssou (University of Copenhagen); Olga Petrik (International Transport Forum); Walid Oueslati (OECD) |
| Abstract: | Policy action to avoid the impending societal costs of climate change is particularly warranted in transport sector, which is responsible for 30% of greenhouse gas emissions in OECD countries. To design appropriate interventions in this sector, policy makers should account for the recent emergence of shared mobility services in urban areas and their potential advantages in terms of emissions mitigation. This study estimates the impact that the widespread uptake of shared mobility services could have on the carbon footprint of urban transport. To this end, it simulates the share of each transport mode and aggregate emissions from passenger transport in 247 cities across 29 OECD countries between 2015 and 2050. The analysis indicates that they have the potential to eliminate, on average, 6.3% of urban passenger transport emissions by the end of this period. |
| Keywords: | CO2 emissions, mode competition, ridesharing, shared mobility, urban transport |
| JEL: | R41 Q54 |
| Date: | 2021–05–04 |
| URL: | http://d.repec.org/n?u=RePEc:oec:envaaa:175-en&r= |
| By: | Xin Shi; Alberto J. Lamadrid L.; Luis F. Zuluaga |
| Abstract: | In a commodity market, revenue adequate prices refer to compensations that ensure that a market participant has a non-negative profit. In this article, we study the problem of deriving revenue adequate prices for an electricity market-clearing model with uncertainties resulting from the use of variable renewable energy sources (VRES). To handle the uncertain nature of the problem, we use a chance-constrained optimization (CCO) approach, which has recently become very popular choice when constructing dispatch electricity models with penetration of VRES (or other sources of uncertainty). Then, we show how prices that satisfy revenue adequacy in expectation for the market administrator, and cost recovery in expectation for all conventional and VRES generators, can be obtained from the optimal dual variables associated with the deterministic equivalent of the CCO market-clearing model. These results constitute a novel contribution to the research of research on revenue adequate, equilibrium, and other types of pricing schemes that have been derived in the literature when the market uncertainties are modeled using stochastic or robust optimization approaches. Unlike in the stochastic approach, the CCO market-clearing model studied here produces uncertainty uniform real-time prices that do not depend on the real-time realization of the VRES generation outcomes. To illustrate our results, we consider a case study electricity market, and contrast the market prices obtained using a revenue adequate stochastic approach and the proposed revenue adequate CCO approach. |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2105.01233&r= |
| By: | Gollier, Christian |
| Abstract: | Any global temperature target must be translated into an intertemporal carbon budget and its associated cost-efficient carbon price schedule. Under the Hotelling's rule, the growth rate of this price should be equal to the interest rate. It is therefore a puzzle that cost-efficiency IAM models yield carbon prices that increase at an average real growth rate around 7% per year. This carbon pricing puzzle suggests that their abatement trajectories are not intertemporally optimized, probably because of the political unacceptability of a high initial carbon price. Using an intertemporal asset pricing approach, I examine the impact of the uncertainties surrounding economic growth and abatement technologies on the dynamics of efficient carbon prices, interest rates and risk premia. I show that marginal abatement costs and aggregate consumption are positively correlated along the optimal abatement path, implying a positive carbon risk premium and an efficient growth rate of expected carbon prices larger than the interest rate. From this numerical exercise, I recommend a growth rate of expected carbon price around 3.75% per year (plus inflation). I also show that the rigid carbon budget approach to cost-efficiency carbon pricing implies a large uncertainty surrounding the future carbon prices that support this constraint. In this model, green investors are compensated for this risk by a large risk premium embedded in the growth rate of expected carbon prices, not by a collar on carbon prices as often recommended. |
| Keywords: | Carbon budget; climate beta; green finance; risk-adjusted Hotelling's rule |
| JEL: | D81 G12 Q54 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15919&r= |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:exs:wpaper:21/023&r= |
| By: | Wendland, Finn |
| Abstract: | Bei der Umsetzung der europäischen Klimaziele in den Sektoren Verkehr und Wärme kam der EU-Energiesteuerrichtlinie (ETD) bislang eine vergleichsweise geringe Bedeutung zu. Eine CO2-basierte Nachschärfung der Energiebesteuerungsregeln im Rahmen des Fit-for-55-Pakets könnte der seit 2003 unveränderten ETD zur intendierten Lenkungsfunktion verhelfen. |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwkkur:262021&r= |
| By: | Cruz, Jose-Luis; Rossi-Hansberg, Esteban |
| Abstract: | Global warming is a worldwide and protracted phenomenon with heterogeneous local economic effects. In order to evaluate the aggregate and local economic consequences of higher temperatures, we propose a dynamic economic assessment model of the world economy with high spatial resolution. Our model features a number of mechanisms through which individuals can adapt to global warming, including costly trade and migration, and local technological innovations and natality rates. We quantify the model at a 1-degree by 1-degree resolution and estimate damage functions that determine the impact of temperature changes on a region's fundamental productivity and amenities depending on local temperatures. Our baseline results show welfare losses as large as 15% in parts of Africa and Latin America but also high heterogeneity across locations, with northern regions in Siberia, Canada, and Alaska experiencing gains. Our results indicate large uncertainty about average welfare effects and point to migration and, to a lesser extent, innovation as important adaptation mechanisms. We use the model to assess the impact of carbon taxes, abatement technologies, and clean energy subsidies. Carbon taxes delay consumption of fossil fuels and help flatten the temperature curve but are much more effective when an abatement technology is forthcoming. |
| JEL: | F63 F69 Q51 Q54 Q56 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15803&r= |
| By: | Ravetti, Chiara (Politecnico di Torino, Department of Management); Cambini, Carlo (Politecnico di Torino, Department of Management, Italy and Copenhagen School of Energy Infrastructure, Copenhagen Business School, Denmark) |
| Abstract: | This paper analyses the the role of energy consumption in countries with heterogeneous development paths. Energy is a fundamental input in human activities and there is a broad literature attesting the link between economic growth and energy use, even though the relationship is far from linear. We examine how the trajectory of energy consumption and development varies depending on the definition of development adopted, comparing classic GDP, adjusted net national income, life expectancy and the human development index in different regions of the world. Applying a pooled mean-group estimator in a dynamic auto-regressive distributed lag model for 127 countries over the period 1970-2016, we find that energy plays a different role in fuelling short and long-run development, depending on the area of the world, and it is crucial to distinguish different measures of development to capture effects that can even move in opposite directions. |
| Keywords: | Economic development; Energy consumption; Dynamic panel |
| JEL: | C23 O11 Q43 |
| Date: | 2021–04–13 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cbsnow:2021_010&r= |
| By: | Hémous, David; olsen, morten |
| Abstract: | It is increasingly evident that the direction of technological responds to economic incentives. We review the literature on directed technical change in the context of environmental economics and labor economics, and show that these fields have much in common both theoretically and empirically. We emphasize the importance of a balanced growth path. We show that the lack of such a path is closely related to the slow development of green technologies in environmental economics and growing inequality in labor economics. We discuss whether the direction of innovation is efficient. |
| Keywords: | automation; climate change; DTC; Endogenous Growth; Income inequality |
| JEL: | E25 J24 O31 O33 O41 O44 Q55 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15730&r= |
| By: | Fleiter, Tobias; Lotz, Meta Thurid; Arens, Marlene; Schlomann, Barbara |
| Abstract: | The policy mix for industry decarbonization in Germany currently undergoes substantial changes. While in the past, it focused strongly on measures supporting and regulating energy efficiency, while in recent years instruments were added that aim at deep decarbonization of industrial production processes and at the long-term transformation of the industry sector. This report presents a summary of the policy instruments aimed at decarbonizing the basic material industry sector in Germany considering currently implemented and planned policies. We provide detailed fact sheets with the current policy design. There is a particular focus on policies supporting innovation and the market entry of new emerging technologies in the following fields, which are regarded central for industry decarbonisation:* hydrogen use, * electrification of industrial heat production, * carbon capture and storage, * bio-based materials, * recycling of materials. Furthermore, we present a summary of the policy mix and discuss its effectiveness to induce the needed technological change towards CO2-neutrality in heavy industry. Current gaps in the policy mix are identified and recommendations to reform the policy mix are provided. |
| Keywords: | industry transformation,decarbonisation,policy mix |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fisisi:s012021&r= |
| By: | Ezeaku, Hillary; Asongu, Simplice; Nnanna, Joseph |
| Abstract: | This study examines the effects of oil supply and global demand shocks on the volatility of commodity prices in the metal and agricultural commodity markets using the SVAR model. The empirical evidence is based on real time daily closing international commodity prices covering the period 2 December 2019 to 1 October 2020. The findings are presented in cumulative impulse responses and variance decompositions. The former is utilized to examine the accumulated influence of structural shocks on the volatility of agricultural and metal commodities whereas the latter reflect the share of variation in the volatility of each commodity arising from each structural shock. Various patterns are provided on how metal and agricultural commodity prices have been influenced by the COVID-19 pandemic. Policy implications are discussed. |
| Keywords: | Covid-9; Commodity Prices |
| JEL: | H12 I12 O10 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107544&r= |
| By: | Asongu, Simplice; Odhiambo, Nicholas |
| Abstract: | The study examines nexuses between carbon dioxide (CO2) emissions, renewable energy consumption and inequality in 39 Sub-Saharan African countries for the period 2004-2014. The empirical evidence is based on Quantile regressions. First, in the 25th quantile of the inequality distributions, as long as CO2 emissions metric tons per capita are kept below 4.700 (4.100), the Gini coefficient (Atkinson index) will not increase. These are avoidable CO2 emissions thresholds. Second, renewable energy consumption should be complemented with other policies to: (i) reduce the Gini coefficient when renewable energy consumption is at 50.00% of total final energy consumption and (ii) mitigate the Atkinson index when renewable energy consumption is at 62.500 % of total final energy consumption in the bottom quantiles of the Atkinson index distribution and at 50.00% of total final energy consumption in the 75th quantile of the Atkinson index distribution. These are renewable energy consumption thresholds for complementary policies. The novelty of this study in the light of extant literature is fundamentally premised on providing policy makers with avoidable thresholds of CO2 emissions as well as corresponding thresholds of renewable energy consumption for complementary policies, in the nexus between the green economy and inequality. |
| Keywords: | Renewable energy; Inequality; Finance; Sub-Saharan Africa; Sustainable development |
| JEL: | H10 O11 O55 Q20 Q30 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107542&r= |
| By: | Waheed, Abdul; Abbas, Shujaat |
| Abstract: | This study analyses the determinants and sustainability of external debt of selected Islamic countries. The study uses panel data of ten oil & gas exporting countries and nine oil & gas importing countries from 2004 to 2016. For oil & gas exporting Islamic countries, economic growth, central government revenue, FDI, and population have a negative effect on external debt, while central government expenditure, trade openness, inflation, and current account balance have a positive effect on external debt. For oil & gas importing Islamic countries, economic growth, central government revenue, current account balance, domestic investment, and labour force have a negative effect on external debt; whereas, FDI and foreign exchange reserve have a positive effect on external debt. The result of sustainability analysis shows that for many oil & gas importing Islamic countries, the actual debt is more than their expected debt based on their macroeconomic performance. For oil & gas exporting Islamic countries, the situation is not as alarming and their external debt position is still better, except few countries. |
| Keywords: | External debt, Debt sustainability, Panel data, Oil & gas exporters, Oil & gas importers |
| JEL: | F1 F3 O4 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107486&r= |
| By: | Mohammad Isleimeyyeh; Amine Ben Amar (RBS College); Stéphane Goutte (VNU - Vietnam National University [Hanoï]) |
| Abstract: | In this paper we investigate cross-commodity futures markets connectedness over different nearest-to-maturities. We thus implement time and time-frequency estimations for two constructed baskets of commodities, classified based on common delivery months. Using daily data spanning the period 1995-2020, we provide a set of stylized facts on the extent to which commodity markets are integrated or segmented. More specifically, our results show that the total connectedness is broadly insensitive to maturity. However, after 2008 financial crisis, the connectedness among commodity futures prices increases when the maturity increases. Furthermore, the overall connectedness amplifies during crises periods compared to tranquil periods. Moreover, certain pairwise markets are comparatively highly linked such as crude oil and heating oil, wheat and corn, corn and soybean, and soybean and soybean oil. The results also demonstrate that crude oil and heating oil are net transmitters all the time and across maturities, while natural gas, gold, and wheat are net receivers all the time and across maturities. More interestingly, the frequency decomposition reveals that most of periods of high total connectedness are driven mostly by high frequency components, which may indicate that commodity markets process information rapidly, except for the COVID-19 crisis period where total connectedness has been driven by lower frequency components. |
| Keywords: | Cross-commodity integration,financialization,energy,agricultural,precious metals,futures,nearest-to-maturities,connectedness,COVID-19 |
| Date: | 2021–04–29 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-03211699&r= |
| By: | Jun Wong; Jonathan Santoso; Marjorie Went; Daniel Sanchez |
| Abstract: | Bioenergy with Carbon Capture and Sequestration (BECCS) is critical for stringent climate change mitigation, but is commercially and technologically immature and resource-intensive. In California, state and federal fuel and climate policies can drive first-markets for BECCS. We develop a spatially explicit optimization model to assess niche markets for renewable natural gas (RNG) production with carbon capture and sequestration (CCS) from waste biomass in California. Existing biomass residues produce biogas and RNG and enable low-cost CCS through the upgrading process and CO$_2$ truck transport. Under current state and federal policy incentives, we could capture and sequester 2.9 million MT CO$_2$/year (0.7% of California's 2018 CO$_2$ emissions) and produce 93 PJ RNG/year (4% of California's 2018 natural gas demand) with a profit maximizing objective. Existing federal and state policies produce profits of \$11/GJ. Distributed RNG production with CCS potentially catalyzes markets and technologies for CO$_2$ capture, transport, and storage in California. |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2105.01644&r= |
| By: | Frederik vom Scheidt; Jingyi Qu; Philipp Staudt; Dharik S. Mallapragada; Christof Weinhardt |
| Abstract: | Hydrogen can contribute substantially to the reduction of carbon emissions in industry and transportation. However, the production of hydrogen through electrolysis creates interdependencies between hydrogen supply chains and electricity systems. Therefore, as governments worldwide are planning considerable financial subsidies and new regulation to promote hydrogen infrastructure investments in the next years, energy policy research is needed to guide such policies with holistic analyses. In this study, we link a electrolytic hydrogen supply chain model with an electricity system dispatch model. We use this methodology for a cross-sectoral case study of Germany in 2030. We find that hydrogen infrastructure investments and their effects on the electricity system are strongly influenced by electricity prices. Given current uniform zonal prices, hydrogen production increases congestion costs in the electricity grid by 11%. In contrast, passing spatially resolved electricity price signals leads to electrolyzers being placed at low-cost grid nodes and further away from consumption centers. This causes lower end-use costs for hydrogen. Moreover, congestion management costs decrease substantially, by 24% compared to the benchmark case without hydrogen. These savings could be transferred into according subsidies for hydrogen production. Thus, our study demonstrates the benefits of differentiating subsidies for hydrogen production based on spatial criteria. |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2105.00130&r= |
| By: | Themann, Michael; Koch, Nikolas |
| Abstract: | This paper assesses the potential impact of the European Union Emissions Trading System (EU ETS) on firm productivity. We estimate a stylized version of the neo-Schumpeterian model, which incorporates innovation and productivity catch-up as two potential sources of firm's productivity growth, while at the same time accounting for persistent productivity dispersion within industries. This dynamic model allows us to differentiate the potential effects of the EU ETS on total factor productivity (TFP) depending on the level of firms' technological advancement. The identification approach is based on a difference-in-difference approach exploiting the incomplete participation requirements of the EU ETS and the rich panel structure of firm-level data for eight EU countries from 2002 to 2012. We find evidence that the policy effects on TFP are highly heterogeneous and depend on the distance to the technological frontier, measured as the highest TFP in each year-industry. Productivity effects are positive for firms that are close to the frontier, but they turn negative for firms operating far behind the frontier. |
| Keywords: | Environmental regulation,EU ETS,productivity,competitiveness |
| JEL: | D22 Q54 Q58 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:904&r= |
| By: | Ridhima Gupta; Martino Pelli |
| Abstract: | This study investigates the causal link between electrification and the adoption of modern (and cleaner) cooking fuels, more specifically Liquefied Petroleum Gas (LPG). In order to correct for the potential endogeneity in the placement of electrical infrastructure, we exploit an instrumental variable approach. Our instrument interacts state-level supply shifts in hydroelectric power availability with the initial level of electrification of each district. The results are consistent with a choice set expansion under a fixed budget constraint. We find that electrification leads to an increase in the probability of adoption of (free) biomass fuels and a decrease in the probability of adoption of (costly) modern cooking fuels. These results are statistically significant only for the poorest households in our sample, while they become statistically insignificant when we move to richer households. The same is true for the share of expenditure in a specific fuel. These results seem to indicate that electrification, by creating an additional strain on households' finances, pushes them back on the energy ladder. |
| Keywords: | Rural Electrification,Cooking Fuel,Energy Ladder,Fuel Stacking, |
| JEL: | O12 O13 Q56 |
| Date: | 2021–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2021s-19&r= |
| By: | Alem, Yonas |
| Abstract: | Deforestation and burning of forest products to meet cooking needs massively contribute to global warming. In order to reduce the biomass fuel consumption of households in developing countries, various improved cookstove (ICS) interventions were implemented by governments, NGOs, and other stakeholders in the past decades. This paper synthesizes the impact evaluation literature on the adoption and impact of ICS, and their role in improving household welfare, while reducing the pressure on forest resources and mitigating emission of CO2. The paper points out five important knowledge gaps that future research may address. First, more research is needed on the effectiveness of different mechanisms that address liquidity constraints, such as stove-for-work programs, which some research has already shown are effective in relaxing households' liquidity constraints to adopt ICS. Second, in order to improve reliability of estimates of the impact of ICS, studies should be guided by proper impact evaluation protocols, such as determining sample size using statistical power analysis. Third, more research is needed on the effects of ICS beyond fuel and time saving, such as time allocation and wellbeing of women. Fourth, urban households are under-represented in stove studies, but more studies on urban households are needed, because they consume substantial amounts of biomass fuel, most importantly charcoal. Finally, and most importantly, all existing stove studies exclusively focus on households. Micro, small and medium-scale enterprises in African consume nearly half of the biomass fuel consumed in the continent. Experimental work on firm energy use behavior and transition to cleaner sources is urgently needed. Otherwise, reduction in biomass fuel use by households may be compensated by increased biomass use by firms. |
| Keywords: | Biomass fuel,improved cookstoves,RCTs,Causal Impact |
| JEL: | C21 C93 D13 H23 O13 O33 Q23 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:907&r= |
| By: | Kulkarni, Shruti |
| Abstract: | The objective of the present paper is to review the current state of climate change technology transfer. This research proposes a method for analyzing climate change technology transfer using patent analysis and topic modeling. A collection of climate change patent data from patent databases would be used as input to group patents in several relevant topics for climate change mitigation using the topic exploration model in this research. The research questions we want to address are: how have patenting activities changed over time in climate change mitigation related technology (CCMT) patents? And who are the technological leaders? The investigation of these questions can offer the technological landscape in climate change-related technologies at the international level. We propose a hybrid Latent Dirichlet Allocation (LDA) approach for topic modelling and identification of relationships between terms and topics related to CCMT, enabling better visualizations of underlying intellectual property dynamics. Further, a predictive model for CCTT is proposed using techniques such as social network analysis (SNA) and, regression analysis. The competitor analysis is also proposed to identify countries with a similar patent landscape. The projected results are expected to facilitate the transfer process associated with existing and emerging climate change technologies and improve technology cooperation between governments. |
| Date: | 2020–04–25 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:zyb3j&r= |
| By: | Jacks, David S.; Stürmer, Martin |
| Abstract: | We provide evidence on the dynamic effects of fuel price shocks, shipping demand shocks, and shipping supply shocks on real dry bulk freight rates in the long run. We first analyze a new dataset on dry bulk freight rates for the period from 1850 to 2020, finding that they followed a downward but undulating path with a cumulative decline of 79%. Next, we turn to understanding the drivers of booms and busts in the dry bulk shipping industry, finding that shipping demand shocks strongly dominate all others as drivers of real dry bulk freight rates in the long run. Furthermore, while shipping demand shocks have increased in importance over time, shipping supply shocks in particular have become less relevant. |
| Keywords: | Dry bulk; maritime freight rates; structural VAR |
| JEL: | E30 N70 R40 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15956&r= |
| By: | Diana B\"ottger; Philipp H\"artel |
| Abstract: | Climate and energy policy targets of the European Commission aim to make Europe the first climate-neutral continent by 2050. For low-carbon and net-neutral energy systems primarily based on variable renewable power generation, issues related to the market integration, cannibalisation of revenues, and cost recovery of wind and solar photovoltaics have become major concerns. The traditional discussion of the merit-order effect expects wholesale power prices in a system with 100 % renewable energy sources to alternate between very high and very low values. Unlike previous work, we present a structured and technology-specific analysis of the cross-sectoral demand bidding effect for the price formation in low-carbon power markets. Starting from a stylised market arrangement and by successively augmenting it with all relevant technologies, we construct and quantify the cross-sectoral demand bidding effects in future European power markets with the cross-sectoral market modelling framework SCOPE SD. As the main contribution, we explain and substantiate the market clearing effects of new market participants in detail. Hereby, we put a special focus on hybrid heat supply systems consisting of combined heat and power plant, fuel boiler, thermal storage and electrical back up and derive the opportunity costs of these systems. Furthermore, we show the effects of cross-border integration for a large-scale European net-neutral energy scenario. Finally, the detailed information on market clearing effects allows us to evaluate the resulting revenues of all major technology categories on future electricity markets. |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2105.01127&r= |
| By: | de Haas, Ralph; Martin, Ralf; Muûls, Mirabelle; Schweiger, Helena |
| Abstract: | We use data on 11,233 firms across 22 emerging markets to analyse how credit constraints and low-quality firm management inhibit corporate investment in green technologies. For identification, we exploit quasi-exogenous variation in local credit conditions and in exposure to weather shocks. Our results suggest that both financial frictions and managerial constraints slow down firm investment in more energy efficient and less polluting technologies. Complementary analysis of data from the European Pollutant Release and Transfer Register (E-PRTR) corroborates some of this evidence by revealing that in areas where banks deleveraged more after the global financial crisis, industrial facilities reduced their carbon emissions by less. On aggregate this kept local emissions 15% above the level they would have been in the absence of financial frictions. |
| Keywords: | CO2 emissions; energy efficiency; Financial Frictions; Management Practices |
| JEL: | D22 G32 L20 L23 Q52 Q53 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15886&r= |
| By: | Uduji, Joseph; Okolo-Obasi, Elda; Asongu, Simplice |
| Abstract: | This paper contributes to the literature on the role of Corporate Social Responsibility (CSR) in oil extraction communities of developing countries. It specifically examines the impact of Global Memorandum of Understanding (GMoU) interventions of multinational oil companies (MOCs) on preventing a resurgence of violence in the Ogoniland of Nigeria. One thousand, two hundred respondent households were sampled across the six kingdoms of Ogoniland. Results from the use of a combined propensity score matching (PSM) and logit model show that GMoUs of MOCs generate significant reductions on key drivers of insurgence in Ogoniland. This suggests that taking on more Cluster Development Boards (CDBs) should form the basis for CSR practice in Ogoniland with the objective of equipping young people with entrepreneurship skills, creating employment, promoting environmental clean-up, and checking the return of violent conflicts. This in turn provides the enabling environment for businesses to thrive in the Nigeria’s oil producing region. |
| Keywords: | Oil extraction, Resurgence of violence, Corporate social responsibility, Propensity matching score, Logit model, Nigeria’s Ogoniland |
| JEL: | C32 O1 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107514&r= |