nep-ene New Economics Papers
on Energy Economics
Issue of 2021‒05‒17
fifty papers chosen by
Roger Fouquet
London School of Economics

  1. Emerging Technology Zero Emission Vehicle Household Travel and Refueling Behavior By Tal, Gil; Karanam, Vaishnavi Chaitanya; Favetti, Matthew P.; Sutton, Katrina May; Ogunmayin, Jade Motayo; Raghavan, Seshadri Srinivasa; Nitta, Christopher; Chakraborty, Debapriya; Davis, Adam; Garas, Dahlia
  2. Decentralized renewable energy broke Vietnam’s power planning logic By Minh Ha-Duong
  3. The roles of inter-fuel substitution and inter-market contagion in driving energy prices: evidences from China’s coal market By Li, Jianglong; Xie, Chunping; Long, Houyin
  4. Deeply decarbonizing residential and urban central districts through photovoltaics plus electric vehicle applications By Takuro Kobashi; Younghun Choi; Yujiro Hirano; Yoshiki Yamagata; Kelvin Say
  5. Implications of the COVID-19 Crisis for the Energy Sector and Climate Change in ASEAN By Economic Research Institute for ASEAN and East Asia (ERIA)
  6. Energy, exergy, economic, exergoenvironmental, and environmental analyses of a multigeneration system to produce electricity, cooling, potable water, hydrogen and sodium-hypochlorite By M. A. Ehyaei; Simin Baloochzadeh; A. Ahmadi; Stéphane Abanades
  7. Carbon Leakage in a European Power System with Inhomogeneous Carbon Prices By Markus Schlott; Omar El Sayed; Mariia Bilousova; Fabian Hofmann; Alexander Kies; Horst St\"ocker
  8. The direct rebound effect for two income groups: The case of Paraguay By Martín Bordón Lesme; Jaume Freire-González; Emilio Padilla Rosa
  9. Pollution permits and financing costs By Antoniou, Fabio; Delis, Manthos; Ongena, Steven; Tsoumas, Chris
  10. A Mayor’s Perspective on Tackling Air Pollution By Shihe Fu; V. Brian Viard
  11. The Energy Transition: An Industrial Economics Perspective By Fabra, Natalia
  12. Developing Markets for Clean Heavy-Duty Trucks in Short-Haul Applications By Giuliano, Genevieve; Dessouky, Maged; Dexter, Sue; Fang, Jiawen; Hu, Shichun; Steimetz, Seiji; O'Brien, Thomas; Miller, Marshall; Fulton, Lewis
  13. L'économie du changement climatique By Jacques Fontanel
  14. Partially Automated Vehicles Are Increasing Vehicle Miles Traveled By Hardman, Scott; Chakraborty, Debapriya; Kohn, Eben
  15. Climate policy and transition risk in the housing market By Ferentinos, Konstantinos; Gibberd, Alex; Guin, Benjamin
  16. On representation of energy storage in electricity planning models By James H Merrick; John E. T. Bistline; Geoffrey J. Blanford
  17. Do Agrivoltaics Improve Public Support for Solar Photovoltaic Development? Survey Says: Yes! By Pascaris1, Alexis S.; Schelly, Chelsea; Rouleau, Mark; Pearce, Joshua M.
  18. A perspective on Electric Vehicle Adoption from an Indian Context By Saparya Suresh
  19. Estimates of the social cost of carbon have not changed over time By Richard S. J. Tol
  20. The Monetary and Non-Monetary Factors Influencing Travel Choices in an Automated, Shared, and Electric Vehicle Future By Fulton, Lewis
  21. Distributional Effects of Environmental Trade Measures By Lutz Sager
  22. Measuring the Impact of Electricity Market Reform in a Chinese Context By Pollitt, M.
  23. The History of Pollution ‘Externalities’ in Economic Thought By Spash, Clive L.
  24. Environmental Policy Stringency and Foreign Direct Investment: New Insights from a Gravity Model Approach By Julia Bahlmann; Paul J.J. Welfens
  25. Resource rents and inclusive human development in developing countries By Tii N. Nchofoung; Elvis Dze Achuo; Simplice A. Asongu
  26. The Long-Run Spillover Effects of Pollution: How Exposure to Lead Affects Everyone in the Classroom By Ludovica Gazze; Claudia Persico; Sandra Spirovska
  27. The Big Three and Corporate Carbon Emissions Around the World By Azar, José; Duro, Miguel; Kadach, Igor; Ormazabal, Gaizka
  28. Energy efficiency and economy-wide rebound effects: A review of the evidence and its implications By Paul Brockway; Steve Sorrell; Gregor Semieniuk; Matthew Kuperus Heun; Victor Court
  29. Normal Tempered Stable Processes and the Pricing of Energy Derivatives By Piergiacomo Sabino
  30. Price Setting and Volatility: Evidence from Oil Price Volatility Shocks By Matthew Klepacz
  31. A Quantitative Investigation into the Impact of Partially Automated Vehicles on Vehicle Miles Travelled in California By Hardman, Scott PhD; Chakraborty, Debapriya PhD; Kohn, Eben
  32. Leadership and Climate Policy By Torben K. Mideksa
  33. Winterization of Texan power system infrastructure is profitable but risky By Katharina Gruber; Tobias Gauster; Peter Regner; Gregor Laaha; Johannes Schmidt
  34. Up in the Air: Air Pollution and Crime – Evidence from India By Singh, Tejendra Pratap; Visaria, Sujata
  35. Price floors and externality correction By Griffith, Rachel; O'Connell, Martin; Smith, Kate
  36. Refuting recent claims of an improved carbon intensity of U.S. corn ethanol By Spawn-Lee, Seth A.; Lark, Tyler J.; Gibbs, Holly; Houghton, Richard A.; Kucharik, Christopher J; Malins, Chris; Pelton, Rylie; Robertson, G. Philip
  37. Climate change and household welfare in Sub-Saharan Africa: empirical evidence from Swaziland By Sam, Abdoul G.; Abidoye, Babatunde; Mashaba, Sihle
  38. Sovereign rating methodologies, ESG and climate change risk: an overview By Denitsa Angelova; Francesco Bosello; Andrea Bigano; Silvio Giove
  39. Local Evidence and Diversity in Minipublics By Bardhi, Arjada; Bobkova, Nina
  40. Economic analysis of tidal stream turbine arrays: a review By Zoe Goss; Daniel Coles; Matthew Piggott
  41. Consideraciones acerca de la diversificación del transporte pesado en Argentina. Una mirada desde la Planificación Energética By Sebastián Scheimberg
  42. Domestic heating behaviour and room temperatures: empirical evidence from Scottish homes By Pullinger, Martin; Berliner, Niklas; Goddard, Nigel; Shipworth, David
  43. Blurred boundaries: a flexible approach for segmentation applied to the car market By Grigolon, Laura
  44. Retailer-consumers model in electricity market under demand response By Arega Getaneh Abate; Rosana Riccardi; Carlos Ruiz
  45. Informed Enforcement: Lessons from Pollution Monitoring in China By Axbard, Sebastian; Deng, Zichen
  46. Air Pollution and Adult Cognition: Evidence from Brain Training By Andrea La Nauze; Edson R. Severnini
  47. How to Allocate New External Finance to African Countries? The vulnerability challenge. A note prepared in view of the Paris Summit on Financing African Economies. By Patrick Guillaumont; Sylviane Guillaumont Jeanneney; Laurent Wagner
  48. Natural resources, child mortality and governance quality in African countries By Sosson Tadadjeu; Henri Njangang; Simplice A. Asongu; Brice Kamguia
  49. Sustainable Mobility Concepts: Optimisation of Flight Movements in Europe By Alexander Nollau; Friedrich Thieszen
  50. Optimierung der Flugbewegungszahlen in Europa By Alexander Nollau; Friedrich Thieszen

  1. By: Tal, Gil; Karanam, Vaishnavi Chaitanya; Favetti, Matthew P.; Sutton, Katrina May; Ogunmayin, Jade Motayo; Raghavan, Seshadri Srinivasa; Nitta, Christopher; Chakraborty, Debapriya; Davis, Adam; Garas, Dahlia
    Abstract: Results from this report highlight how alternative fuel vehicles are used based on data collected between 2015 and 2020. Alternative fuel vehicles include plug-in electric vehicles (PEVs), vehicles that are either battery electric vehicles (BEVs) or plug-in hybrid electric vehicles (PHEVs), and fuel cell vehicles (FCVs). This category of vehicle technologies is included in the California Air Resources Board’s Zero Emission Vehicle regulations and is referred to as ZEV in this report. We explore the environmental impacts of driving, charging behavior and infrastructure. In households with ZEVs, the data from surveys, loggers, and interviews indicate that those vehicles are being used extensively. This report, which combined the data collected in two consecutive studies between 2015-2020, includes first and second generation PEVs popular in California between 2011-2018. The BEVs include the first-generation, shortrange Nissan Leaf and the long range BEVs such as the Chevrolet Bolt and Tesla Model S. The PHEVs include short range sedans such as the Toyota Prius Plug-in and longer-range vehicles such as the Toyota Prius Prime, Chevrolet Volt and Chrysler Pacifica. The FCVs include the most popular fuel cell vehicle, the Toyota Mirai.
    Keywords: Engineering
    Date: 2021–04–19
  2. By: Minh Ha-Duong (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Early 2021, Vietnam's Ministry of Industry and Trade released for public discussion the draft Power Development Plan VIII describing how the country will produce its electricity for the next ten years. Focused on developing gas-fired power, the draft reuses a renewable energy development strategy elaborated six years ago. That strategy was ambitious then but is now outdated by an ongoing solar and wind boom. Obsolete before publication, the draft fails to plan the ongoing energy transition which is all about PV, wind, storage, transport electrification, and increasing climate policy goals. To remain relevant in the energy transition era, quinquennial planning has to become more agile.
    Keywords: Planning,Energy Transition,Vietnam
    Date: 2021–03
  3. By: Li, Jianglong; Xie, Chunping; Long, Houyin
    Abstract: Coal has been dominating energy supply and consumption in China, with the country becoming the largest energy supplier and consumer worldwide. Due to inter-fuel substitution of crude oil and inter-market contagion of international coal market, China's coal price might be interrelated with crude oil price and international coal price. However, the precise roles of these two effects in determining China's coal price are unknown. This paper contributes to previous literature by investigating this issue. We find that co-movements between China's coal price and crude oil price largely hinge on the shares of oil and coal in China’s energy mix, while its co-movements with international coal price depend on scales of coal trade. Inter-fuel substitution dominated the interaction of China's coal market with other energy types, but the importance of inter-market contagion has been increasing. We also find that China might have become an originator for driving the returns of crude oil and international coal, in particular after 2008. Furthermore, China's coal market is still a net volatility recipient for shocks from both crude oil market and international coal market. Given the increased integration of global energy markets, we anticipate this paper to provide a better understanding on the dynamic changes in China's coal prices.
    Keywords: China's coal price; Inter-fuel substitution; Inter-market contagion; Crude oil market; International coal market
    JEL: J1
    Date: 2019–10–14
  4. By: Takuro Kobashi; Younghun Choi; Yujiro Hirano; Yoshiki Yamagata; Kelvin Say
    Abstract: With the costs of renewable energy technologies declining, new forms of urban energy systems are emerging that can be established in a cost-effective way. The SolarEV City concept has been proposed that uses rooftop Photovoltaics (PV) to its maximum extent, combined with Electric Vehicle (EV) with bi-directional charging for energy storage. Urban environments consist of various areas, such as residential and commercial districts, with different energy consumption patterns, building structures, and car parks. The cost effectiveness and decarbonization potentials of PV + EV and PV (+ battery) systems vary across these different urban environments and change over time as cost structures gradually shift. To evaluate these characteristics, we performed techno-economic analyses of PV, battery, and EV technologies for a residential area in Shinchi, Fukushima and the central commercial district of Kyoto, Japan between 2020 and 2040. We found that PV + EV and PV only systems in 2020 are already cost competitive relative to existing energy systems (grid electricity and gasoline car). In particular, the PV + EV system rapidly increases its economic advantage over time, particularly in the residential district which has larger PV capacity and EV battery storage relative to the size of energy demand. Electricity exchanges between neighbors (e.g., peer-to-peer or microgrid) further enhanced the economic value (net present value) and decarbonization potential of PV + EV systems up to 23 percent and 7 percent in 2030, respectively. These outcomes have important strategic implications for urban decarbonization over the coming decades.
    Date: 2021–05
  5. By: Economic Research Institute for ASEAN and East Asia (ERIA)
    Abstract: Key Messages; (i) The spread of the coronavirus disease (COVID-19) and the resulting reduction in demand for products and services will likely cut total annual carbon dioxide (CO2) emissions, but this will be temporary. While public health and economic rescue packages dominate the headlines, climate action is in danger of suffering a setback.(ii) Low oil prices could make clean energy sources, such as renewables, less competitive and disincentivise the transition to clean energy. (iii) Ongoing behavioural changes, such as working from home, could alter energy consumption patterns after the pandemic and facilitate a low-carbon future. (iv) Energy prices should be made affordable during the faltering economic recovery, as they affect industrial competitiveness.(v) The Association of Southeast Asian Nations (ASEAN) should seize new investment opportunities with stimulus packages for enhancing regional energy security, resilience, and climate change objectives (e.g. expanding the electricity network and increasing oil stockpiling).
    Date: 2020–04–22
  6. By: M. A. Ehyaei (Islamic Azad University); Simin Baloochzadeh (University of Sunderland); A. Ahmadi (IUST - Iran University of Science and Technology [Tehran]); Stéphane Abanades (PROMES - Procédés, Matériaux et Energie Solaire - UPVD - Université de Perpignan Via Domitia - CNRS - Centre National de la Recherche Scientifique)
    Abstract: One of the necessities of human beings in this century is the potable water supply. This supply has more environmental benefits if the potable water is supplied by renewable energy resources. In this paper, a combination of combined cooling and power system (Goswami cycle), with the reverse osmosis and sodium hypochlorite plant powered by geothermal energy resources is proposed. The products of this system are electrical and cooling energy, potable water, hydrogen and salt. To investigate all of the system aspects, energy, exergy, economic, exergoenvironmental, and environmental analyses are performed. In environmental analysis, the social costs of air pollution are considered. It means that for the same amount of system electrical power produced by non-renewable energy resource power generation systems, the produced air pollution gases and their costs considering the social cost of air pollution are quantified. In this regard, four scenarios are defined. Results show this multi-generation system produces 1.751 GJ/year electrical energy, 1.04 GJ/year cooling energy, 18106.8 m 3 /year potable water, 7.396 Ton/year hydrogen, and 3.838 Ton/year salt throughout a year. The system energy and exergy efficiencies are equal to 12.25%, and 19.6%. The payback period time of this system is equal to 2.7 years.
    Keywords: Goswami Cycle,Reverse Osmosis,Salt,Exergy,Economic,Exergoenvironmental
    Date: 2021
  7. By: Markus Schlott; Omar El Sayed; Mariia Bilousova; Fabian Hofmann; Alexander Kies; Horst St\"ocker
    Abstract: Global warming is one of the main threats to the future of humanity and extensive emissions of greenhouse gases are found to be the main cause of global temperature rise as well as climate change. During the last decades international attention has focused on this issue, as well as on searching for viable solutions to mitigate global warming. In this context, the pricing of greenhouse gas emissions turned out to be the most prominent mechanism: First, to lower the emissions, and second, to capture their external costs. By now, various carbon dioxide taxes have been adopted by several countries in Europe and around the world; moreover, the list of these countries is growing. However, there is no standardized approach and the price for carbon varies significantly from one country to another. Regionally diversified carbon prices in turn lead to carbon leakage, which will offset the climate protection goals. In this paper, a simplified European power system with flexible carbon prices regarding the Gross Domestic Product (GDP) is investigated. A distribution parameter that quantifies carbon leakage is defined and varied together with the base carbon price, where the combination of both parameters describes the spatially resolved price distribution, i.e. the effective carbon pricing among the European regions. It is shown that inhomogeneous carbon prices will indeed lead to significant carbon leakage across the continent, and that coal-fired electricity generation will remain a cheap and therefore major source of power in Eastern and South-Eastern Europe - representing a potential risk for the long term decarbonization targets within the European Union.
    Date: 2021–05
  8. By: Martín Bordón Lesme (Department of Applied Economics, Univ. Autonoma de Barcelona, 08193 Bellaterra, Spain); Jaume Freire-González (ENT Foundation, Josep Llanza, 1-7, 2 3, 08800 Vilanova i la Geltrú, Barcelona); Emilio Padilla Rosa (Department of Applied Economics, Univ. Autonoma de Barcelona, 08193 Bellaterra, Spain)
    Abstract: We estimate the direct rebound effect (DRE) for all energy services requiring electricity for their provision in Paraguayan households. Using recent panel data from 2001 to 2017, we estimate the magnitude of the DRE at the province and municipality levels. Because we estimate the DRE through the own-price elasticity of electricity demand, we not only provide the first empirical evidence of the DRE for Paraguay, a developing country, but also update the study of Paraguay’s residential electricity demand. Our findings suggest a positive DRE emerges after an improvement in energy efficiency, but the magnitude of the DRE does not completely reduce the resulting energy savings. We find a lower DRE in low-income households, which may be explained by two factors: electricity is not the main source of energy for most low-income households, and most clandestine electricity connections are from low-income households. Paraguay is one of the countries with the highest generation of electricity per capita through hydroelectric plants. However, this electricity supply does not match electricity consumption, especially in low-income households, because of distribution issues in relation to energy sources
    Keywords: Direct Rebound Effect, Electricity Consumption, Energy Services, Low-Income Households, Panel Data.
    Date: 2021–04
  9. By: Antoniou, Fabio; Delis, Manthos; Ongena, Steven; Tsoumas, Chris
    Abstract: Effective environmental policy should consider how the financiers of polluting firms behave. In a theoretical model describing the periods before and after policy implementation, we show that loan spreads for firms participating in cap-and-trade programs are a function of the costs of compliance and the specific features of the permits markets. With higher permits storage and lower permit prices, firm financing costs fall. Our empirical analysis exploits the dichotomy created by phase III of the EU Emission Trading System, designed to increase and pass the cost of CO2 emissions to the polluters. In contrast with possible program intentions but in line with our theoretical predictions, loan spreads fall by 25% on average starting in 2013. We empirically identify permits storage before program implementation and its associated effect as key drivers of the fall in loan spreads for affected firms, and we show that this dynamic partly undermines the expected reduction in CO2 emissions.
    Keywords: Bond spreads; CO2 emissions; EU Emission Trading System; Loan spreads; Pollution permits
    JEL: G12 G21 Q5
    Date: 2020–12
  10. By: Shihe Fu (Xiamen University); V. Brian Viard (Cheung Kong Graduate School of Business)
    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: 2021–04–28
  11. By: Fabra, Natalia
    Abstract: Addressing climate change requires full decarbonization of our economies. Whether this objective is achieved at least cost for society hinges on good policy design. In turn, this calls for a thorough understanding of firms' and consumers' incentives in the presence of asymmetric information, the determinants of strategic interaction, and the impact of market design and market structure on the intensity of competition. Industrial Economics thus has much to contribute towards a successful Energy Transition, while benefiting from the exciting research opportunities it brings. In this paper, I survey some of the recent developments in this area. My focus is on the power sector, and in particular, on the regulatory and market design challenges triggered by the expansion of intermittent renewables with almost zero marginal costs. I conclude with some questions that merit further research.
    Keywords: auctions; Carbon Emissions; Competition; Dynamic pricing; Energy; invecstment; market design; market power; Storage
    JEL: L22 L94
    Date: 2021–01
  12. By: Giuliano, Genevieve; Dessouky, Maged; Dexter, Sue; Fang, Jiawen; Hu, Shichun; Steimetz, Seiji; O'Brien, Thomas; Miller, Marshall; Fulton, Lewis
    Abstract: California is pursuing multiple policies to spur the transition to a cleaner heavy-duty vehicle fleet. Achieving these targets will require massive change in the heavy-duty short-haul industry, and many unanswered questions remain. How do battery-electric heavy-duty trucks compare to diesel in everyday short-haul operations? How much would it cost to transition to a zero-emission truck fleet, and who would pay? To begin to answer these questions, researchers at the National Center for Sustainable Transportation conducted a comprehensive analysis of the potential for zero-emission or near-zero-emission heavy-duty trucks to be used in short-haul drayage services. The researchers considered operational, economic, and environmental impacts through simulation modeling, interviews, case studies, stated preference surveys, and cost-effectiveness analyses. View the NCST Project Webpage
    Keywords: Business, Engineering, Law, Air quality management, Alternate fuels, Alternatives analysis, Benefit cost analysis, Case studies, Forecasting, Freight traffic, Heavy duty trucks, Market share, Recommendations, Short haul, Simulation, Surveys, Zero emission vehicles
    Date: 2021–05–01
  13. By: Jacques Fontanel (CESICE - Centre d'études sur la sécurité internationale et les coopérations européennes - IEPG - Sciences Po Grenoble - Institut d'études politiques de Grenoble - UPMF - Université Pierre Mendès France - Grenoble 2)
    Abstract: Climate change poses a problem for the economic system that fostered the polluting industrial revolutions of coal and oil. Today, the digital economy revolution offers significant hope for reducing pollution and promoting decarbonisation. However, the economic interest struggles of the powerful lobbies of the polluting sectors seem to reduce the potential for transformation of an economic system driven by the search for short-term profit. The major powers want to preserve their economic gains and are undertaking this revolution at a pace that suits them, which is not without conflict, given the urgency of action in the face of the harmful transformations undergone by eco-systems. Furthermore, the GAFAMs, the powerful providers of digital services and instruments, together with their Chinese competitors, have a considerable economic and strategic force that could undermine freedoms and human and citizens' rights. Finally, for the production of digital tools, rare earths are likely to pose new problems, those relating to the pollution involved in their production and their relative scarcity compared to the stocks known today.
    Abstract: Le changement climatique pose un problème au système économique qui a favorisé la mise en place des révolutions industrielles polluantes du charbon et du pétrole. Aujourd'hui, la révolution de l'économie numérique offre des espoirs non négligeables pour réduire les pollutions et favoriser la décarbonisation. Cependant, les luttes d'intérêt économiques des puissants lobbys des secteurs polluants semblent réduire le potentiel de transformation d'un système économique mû par la recherche du profit à court terme. Les grandes puissances veulent conserver leurs acquis économiques et elles engagent cette révolution au rythme qui leur convient, ce qui ne va pas sans conflit, au regard de l'urgence de l'action face aux transformations néfastes subis par les écosystèmes. En outre, les GAFAM, les puissants fournisseurs de services et instruments numériques, disposent, avec leurs concurrents chinois, d'une force économique et stratégique considérable susceptible de porter atteinte aux libertés, et aux droits de l'homme et des citoyens. Enfin, pour la production des instruments du numérique, les terres rares risquent de poser de nouveaux problèmes, ceux relatifs à la pollution qu'engage leur production et leur rareté relative au regard des stocks aujourd'hui connus.
    Keywords: digital economy,climate change,GAFAM,Rare Earths,économie numérique,changement climatique,Terres rares
    Date: 2021–03–16
  14. By: Hardman, Scott; Chakraborty, Debapriya; Kohn, Eben
    Abstract: Research is beginning to show that vehicle automation will encourage more driving because it substantially reduces driver workload, making driving more relaxing and less stressful. This will have environmental sustainability implications, given that vehicle electrification alone will not be sufficient to meet state and federal greenhouse gas reduction targets without reductions in vehicle miles traveled (VMT). Research on the effects of vehicle automation has been somewhat speculative because fully automated vehicles are not yet commercially available. But many automakers are already incorporating automated features such as adaptive cruise control and lane keeping assist into their vehicles. These features assist in driving tasks and reduce the “cost” of driving in much the same way fully automated vehicles promise to do. Researchers at UC Davis surveyed owners of partially automated electric vehicles in California to understand the impact of partial automation on VMT. The survey asked respondents about their use of partial automation systems including BMW Driving Assistant, Ford Co-pilot360, Honda Sensing, Nissan ProPilot Assist, Tesla Autopilot, and Toyota Safety Sense. The results of this study show that partial automation has the potential to cause large increases in VMT.
    Keywords: Engineering
    Date: 2021–05–13
  15. By: Ferentinos, Konstantinos (Lancaster University); Gibberd, Alex (Lancaster University); Guin, Benjamin (Bank of England)
    Abstract: Public policies aimed at mitigating climate change can come with the transition risk of sudden adjustments of asset prices. We study the consequences of a policy intervention addressing greenhouse gas emissions in the housing market. Leveraging a unique data set of the population of all house transactions in England and Wales, we document novel evidence of transition risk. Prices of carbon-intensive properties affected by this policy decreased by about £5,000 to £9,000 relative to unaffected ones. We interpret this result as evidence in favour of semi-strong market efficiency in the housing market. We infer moderate implications for financial stability and for the wealth distribution among homeowners.
    Keywords: Climate policy; transition risk; house prices; financial stability; wealth inequality
    JEL: C54 Q54 Q58
    Date: 2021–04–30
  16. By: James H Merrick; John E. T. Bistline; Geoffrey J. Blanford
    Abstract: This paper considers the representation of energy storage in electricity sector capacity planning models. The incorporation of storage in long-term systems models of this type is increasingly relevant as the cost of storage technologies, particularly batteries, and of complementary variable renewable technologies, decline. To value storage technologies appropriately, a representation of linkages between time periods is required, breaking classical temporal aggregation strategies that greatly improve computation time. This paper appraises approaches to address this problem, highlighting a common underlying structure and challenges of aggregation at relevant geographical scales, and investigates improvements on the literature state of the art. We also demonstrate a novel decomposition scheme to avoid temporal aggregation for applications where longer runtimes are permissible. These examples frame aspects of the problem ripe for contributions from the operations research community.
    Date: 2021–05
  17. By: Pascaris1, Alexis S.; Schelly, Chelsea; Rouleau, Mark; Pearce, Joshua M. (Michigan Technological University)
    Abstract: Agrivoltaic systems allow for the simultaneous production of solar-generated electricity and agriculture. As the climate change related impacts of conventional energy and food production intensify, finding strategies to increase the deployment of solar photovoltaic systems, preserve agricultural land, and minimize competing land uses is urgent. Given the proven technical, economic, and environmental advantages provided by agrivoltaic systems, increased proliferation is anticipated, which necessitates accounting for the nuances of community resistance to solar development on farmland. Minimizing siting conflict and addressing agricultural communities’ concerns will be key in promoting public support for agrivoltaics, as localized acceptance of solar is a critical determinant of project success. This survey study assessed if public support for solar development increases when energy and agricultural production are combined in an agrivoltaic system. Results show that 81.8% of respondents would be more likely to support solar development in their community if it combined the production of both energy and agriculture. This increase in support for solar given the agrivoltaic approach highlights a development strategy that can improve local social acceptance and the deployment rate of solar photovoltaics. Survey respondents prefer agrivoltaic projects that a) are designed to provide economic opportunities for farmers and the local community b) are located on private property or existing agricultural land c) do not threaten local interests and d) ensure fair distribution of economic benefits. Proactively identifying what the public perceives as opportunities and concerns related to agrivoltaic development can help improve the design, business model, and siting of systems in the U.S.
    Date: 2021–05–05
  18. By: Saparya Suresh (Indian Institute of Management Kozhikode)
    Abstract: India has aimed for a 30% electric vehicle adoption by 2030. As a part of the electric vehicle adaptation, the government is moving towards coming up with a policy framework for electric vehicles and related sectors like raw material sourcing, battery manufacturing, charging stations, etc. This paper is intended to draw a comparative analysis between the ICE vehicles and Battery Electric Vehicles on operational aspects as well as its environmental implications. The paper stands out in highlighting certain important factors which are needed to be considered while devising a policy framework towards electric vehicle adoption. Based on the conclusion, few policy suggestions are made for a better sustainable policy framework for the effective adaptation of electric vehicles for the future in an Indian context.
    Keywords: Electric Vehicles, Environmental Impact, Policy Framework, Lithium Batteries
    Date: 2021–03
  19. By: Richard S. J. Tol
    Abstract: Some claim that as knowledge about climate change accumulates, the social cost of carbon increases. A meta-analysis of published estimates shows that this is not the case. Correcting for inflation and emission year and controlling for the discount rate, kernel density decomposition reveals a stationary distribution. Actual carbon prices are almost everywhere below the estimated social cost of carbon.
    Date: 2021–05
  20. By: Fulton, Lewis
    Abstract: The transportation system is undergoing three revolutions: vehicle automation, electrification, and shared mobility. While these are still nascent trends, studies suggest that they could become ubiquitous in the coming decades. How these revolutionary changes transpire will have significant implications for transportation sustainability. A key factor will be whether autonomous vehicles are deployed as shared cars that serve many travelers such as in ridesourcing or ridehailing fleets, or as privately owned vehicles that could dramatically increase vehicle miles traveled and associated environmental impacts. To anticipate how these revolutions will affect future transportation, and to develop policy to shape that future, it is important to understand the various factors that influence individuals’ travel choices. These choices include whether to travel alone or with others, and whether to use a private vehicle or a shared one. Some of these factors are monetary, such as the cost of fuel, insurance, and a driver, while others are non-monetary, such as the travel time, comfort, and reliability of each transportation option. The significance of these non-monetary factors is poorly understood and often ignored. Researchers at the University of California, Davis developed a framework for considering the monetary and non-monetary costs of future travel choices and used existing research to develop interim values for several non-monetary travel choice factors. This policy brief summarizes the findings from that research and provides policy implications. View the NCST Project Webpage
    Keywords: Social and Behavioral Sciences, Cost estimating, Mobility, Mode choice, Ridesourcing, Surveys, Travel behavior, Travel costs, Value of time
    Date: 2021–05–01
  21. By: Lutz Sager (McCourt School of Public Policy, Georgetown University)
    Abstract: I investigate the distributional effects of environmental trade measures. Distributional effects are assigned to two channels: ‘Use-side’ effects describe which consumers bear the burden of changing prices, while ‘source-side’ effects describe shifts in income between sectors, factors of production and different groups of workers. I present simple statistics to characterize the distributional tendencies of climate policies in each of these channels. I then apply these statistics to assess the distributional effects of two types of policy instruments: Border Carbon Adjustments and Green Industrial Policy. I conclude with a more detailed case study investigating the distributional effects of introducing Border Carbon Adjustments to complement an EU-wide carbon price. The analysis highlights the importance of modeling the effects of environmental trade policy at different scales, capturing shifts between countries, as well as shifts between sectors and income groups within them. Classification-Q56, Q58, F18
    Keywords: Climate Policy, International Trade, Redistributive Effects, Border Carbon Adjustment, Industrial Policy
    Date: 2021–05–10
  22. By: Pollitt, M.
    Abstract: This paper draws on international experience to examine how the ongoing power sector reform (PSR) in China since 2015 should be measured and assessed. We proceed by reviewing some relevant international reform experience and then applying this to the Chinese context. Thus we focus on some of the extensive previous literature which has documented reforms in cross-country and in single country studies. We pay particular attention to the European Union (EU) single electricity market, which is the largest integrated electricity market in the world. We also look at a social cost benefit analyses of UK electricity market reforms and how these might applied in a given Chinese province. We go on to examine the actual price impact evidence from two leading provinces – Guangdong and Zhejiang – on the overall price effect and on exactly how those price effects have been achieved. We then offer some insights from the extensive regulatory reporting by leading regulators on market performance that is relevant to PSR in China based on excellent annual reporting from the UK, Australia and the US.
    Keywords: Power sector reform, social cost benefit analysis, state of the market
    JEL: L94
    Date: 2021–04–27
  23. By: Spash, Clive L.
    Abstract: Today, environmental economics is the response of the neoclassical economic school to the ecological crisis, but at one time its leading contributors regarded it as a revolutionary development that would change the conduct and content of economics as a discipline. Understanding and addressing environmental pollution was core to that potential paradigm shift. In tracing the history of conceptualising pollution as an externality and market failure this paper covers the development of ideas by Marshall, Pigou, Pareto, Coase, Stigler, Samuelson, Ciciacy-Wantrup and Kapp. Pollution externality theory is shown to have incorporated an elitist ethics and liberal market ideology. As a market failure pollution was deemed a minor correctible error of the price system. Monetary valuation of social and environmental harm became the means of justifying optimal levels of pollution. Neoliberal theories of spreading property rights further watered down potential interventionist aspects. Bio-physical realism, in the work of Kneese, Ayres and d’Arge, and social realism in Kapp’s theory of cost shifting were lost once environmental economics adopted a deductivist mathematical formalism. Kapp’s alternative theory is based on a classic institutionalists economic understanding of cost shifting and power relations. It advocates a public policy response in the form of objective social minima achieved via regulation and planning. This theory has until now been successfully supressed to prevent a potential revolutionary paradigm shift in economic price theory.
    Keywords: externalities; market failure, cost shifting; price theory; pollution; Pigou; Coase; Kapp; paradigm shift; environmental economics, neoclassical economics; institutional economics, neoliberal
    Date: 2021
  24. By: Julia Bahlmann (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW)); Paul J.J. Welfens (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW))
    Abstract: There is a long debate about potential pollution haven effects existing in the global North and South in the context of rising environmental stringency. This contribution takes a fresh look at intra-OECD foreign direct investment and employs a modern FDI gravity modelling approach to shed more light on these issues. There is clear evidence in favor of the pollution haven hypothesis - countries with weaker environmental policy and regulation are able to attract relatively high FDI inflows so that new challenges for environmental policy and international cooperation in environmental policy have to be considered. As regards environmental policy, more political cooperation between the OECD countries seems to be required in order to prevent or mitigate "quasi-carbon leakage" effects from undermining the effectiveness of environmental and climate policy. The evidence obtained from this analysis of OECD countries suggests the benefit of extending this research in future to other country groups, to include countries in Asia or Latin America and Africa.
    Keywords: FDI, Pollution Haven Countries, OECD, Gravity Modelling, Environmental Policy
    JEL: F21 Q43 Q50 Q58 C23
    Date: 2021–04
  25. By: Tii N. Nchofoung (University of Dschang, Cameroon;); Elvis Dze Achuo (University of Dschang, Cameroon;); Simplice A. Asongu (Yaoundé, Cameroon)
    Abstract: This study aims to empirically verify the effects of natural resource rents on inclusive human development in developing countries. The results from the IV Tobit regression show that natural resource rents have a positive direct effect on inclusive human development in developing countries and that this relationship varies by regional groupings, income levels, level of development and export structure. Looking at the transmission mechanisms, when the interactive variables of governance and environmental quality is introduced, the modulating channel through governance exerts a robust negative synergy effect in the sample of developing countries and positive synergy effects for Africa and low-income countries. When the interactive variable of CO2 emissions is introduced for Africa, a negative net effect of natural resource rents on inclusive human development is obtained. This was up to a policy threshold of 25.4412 of CO2 emissions when the negative effect is nullified. For Asia and the Latin America and Caribbean, a positive net effect is obtained. This is up to a CO2 emissions threshold of 29.038 and 3.6752 respectively, when the positive effect is nullified. Besides, the high income and the upper-middle income countries produce a negative net effect of resource rents on inclusive human development through CO2 modulation, with up to positive CO2 emission thresholds of 37.9365 and 23.6257 respectively. Policy implications are highlighted. In summary, contingent on engaged specificities, where conditional effects are negative, negative thresholds for complementary policies have been provided and in scenarios where conditional impacts are positive, actionable positive thresholds have been provided.
    Keywords: Resource Rents, Inclusive Human Development, Institutional Quality, Environmental Quality
    JEL: P48 O11 C23
    Date: 2021–05
  26. By: Ludovica Gazze; Claudia Persico; Sandra Spirovska
    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.
    JEL: I14 I24 Q52
    Date: 2021–05
  27. By: Azar, José; Duro, Miguel; Kadach, Igor; Ormazabal, Gaizka
    Abstract: This paper examines the role of the "Big Three" (i.e., BlackRock, Vanguard, and State Street Global Advisors) on the reduction of corporate carbon emissions around the world. Using novel data on engagements of the Big Three with individual firms, we find evidence that the Big Three focus their engagement effort on large firms with high CO2 emissions in which these investors hold a significant stake. Consistent with this engagement influence being effective, we observe a strong and robust negative association between Big Three ownership and subsequent carbon emissions among MSCI index constituents, a pattern that becomes stronger in the later years of the sample period as the three institutions publicly commit to tackle ESG issues.
    Keywords: Big Three; Carbon Emissions; climate change; ESG; Institutional Ownership; Shareholder activism
    JEL: M41
    Date: 2020–12
  28. By: Paul Brockway (SEE - School of Earth and Environment [Leeds] - University of Leeds); Steve Sorrell (SPRU - Science and Technology Policy Research - University of Sussex); Gregor Semieniuk (UMass Amherst - University of Massachusetts [Amherst] - UMASS - University of Massachusetts System, SOAS, University of London); Matthew Kuperus Heun (Calvin University); Victor Court (IFP School, IFPEN - IFP Energies nouvelles - IFPEN - IFP Energies nouvelles, Institut Louis Bachelier)
    Abstract: The majority of global energy scenarios anticipate a structural break in the relationship between energy consumption and gross domestic product (GDP), with several scenarios projecting absolute decoupling, where energy use falls while GDP continues to grow. However, there are few precedents for absolute decoupling, and current global trends are in the opposite direction. This paper explores one possible explanation for the historical close relationship between energy consumption and GDP, namely that the economy-wide rebound effects from improved energy efficiency are larger than is commonly assumed. We review the evidence on the size of economy-wide rebound effects and explore whether and how such effects are taken into account within the models used to produce global energy scenarios. We find the evidence base to be growing in size and quality, but remarkably diverse in terms of the methodologies employed, assumptions used, and rebound mechanisms included. Despite this diversity, the results are broadly consistent and suggest that economy-wide rebound effects may erode more than half of the expected energy savings from improved energy efficiency. We also find that many of the mechanisms driving rebound effects are overlooked by integrated assessment and global energy models. We therefore conclude that global energy scenarios may underestimate the future rate of growth of global energy demand.
    Keywords: Energy efficiency,Economy-wide rebound effects,Integrated assessment models,Energy-GDP decoupling,Energy rebound
    Date: 2021–05
  29. By: Piergiacomo Sabino
    Abstract: In this study we consider the pricing of energy derivatives when the evolution of spot prices is modeled with a normal tempered stable driven Ornstein-Uhlenbeck process. Such processes are the generalization of normal inverse Gaussian processes that are widely used in energy finance applications. We first specify their statistical properties calculating their characteristic function in closed form. This result is instrumental for the derivation of non-arbitrage conditions such that the spot dynamics is consistent with the forward curve without relying on numerical approximations or on numerical integration. Moreover, we conceive an efficient algorithm for the exact generation of the trajectories which gives the possibility to implement Monte Carlo simulations without approximations or bias. We illustrate the applicability of the theoretical findings and the simulation algorithms in the context of the pricing of different contracts, namely, strips of daily call options, Asian options with European style and swing options. Finally, we present an extension to future markets.
    Date: 2021–05
  30. By: Matthew Klepacz
    Abstract: How do changes in aggregate volatility alter the impulse response of output to monetary policy? To analyze this question, I study whether individual prices in Producer Price Index micro data are more likely to change and to move in the same direction when aggregate volatility is high, which would increase aggregate price exibility and reduce the effectiveness of monetary policy. Taking advantage of plausibly exogenous oil price volatility shocks and heterogeneity in oil usage across industries, I find that price changes are more dispersed and less frequent, implying that prices are less likely to move in the same direction when aggregate volatility is high. This contrasts with findings in the literature about idiosyncratic volatility. I use a state-dependent pricing model to interpret my findings. Random menu costs are necessary for the model to match the positive empirical relationship between oil price volatility and price change dispersion. This is the case because random menu costs reduce the extent to which firms with prices far from their optimum all act in a coordinated fashion when volatility increases. The model implies that increases in aggregate volatility do not substantially reduce the ability of monetary policy to stimulate output.
    Keywords: Volatility; Ss model; Menu cost; Monetary policy; Oil
    JEL: E30 E31 E50
    Date: 2021–04–30
  31. By: Hardman, Scott PhD; Chakraborty, Debapriya PhD; Kohn, Eben
    Abstract: This project investigated changes in travel behavior by owners of partially automated electric vehicles. Partial automation can control vehicle speed and steering using sensors that monitor the external environment. The researchers used review results from survey responses including 940 users of partial automation, of which 628 who have Tesla Autopilot and 312 with systems from other automakers. Autopilot users report using automation more than users of other partial automation systems. Autopilot has the largest impact on travel, notably 36% of Autopilot users reporting more longdistance travel. Respondents who are younger, have a lower household income, use automation in a greater variety of traffic, roads, and weather conditions, and those who have pro-technology attitudes and outdoor lifestyles are more likely to report doing more long-distance travel. The project used propensity score matching to investigate whether automation leads to any increase in respondents’ annual vehicle miles travelled. For simplicity, the researchers focused only on the impact of Tesla Autopilot and found that automation results in an average of 4,884 more miles being driven per year.
    Keywords: Engineering, Electric vehicles, intelligent vehicles, level 2 driving automation, travel behavior, travel models, vehicle miles of travel, surveys
    Date: 2021–05–01
  32. By: Torben K. Mideksa
    Abstract: This paper examines leadership in relation to supplying a global public good. Both the Kyoto Protocol and the Paris Agreement encourage the developed countries to take a lead in reducing emissions. Does a country benefit from taking a lead? When does leadership improve global welfare? The answer depends on how transparent the leader’s abatement technology is for the followers. When there is no transparency and the leader has to abate to signal the abatement cost, leadership reduces global welfare unless the crowding-out effect is weak. If there is transparency and the follower can benefit from technology spillover effects, leadership reduces global welfare unless the spillover effect is sufficiently large. I find that transparency reduces global welfare unless the spillover effect is sufficiently large and the difference in abatement cost is small. This theory can rationalize the European Union’s stance on climate policy while also explaining the perceived failure of the Kyoto Protocol.
    Keywords: global public goods, international relations, leadership
    JEL: C72 D81 F50 H21 Q38 Q58
    Date: 2021
  33. By: Katharina Gruber; Tobias Gauster; Peter Regner; Gregor Laaha; Johannes Schmidt
    Abstract: We deliver the first analysis of the 2021 cold spell in Texas which combines temperature dependent load estimates with temperature dependent estimates of power plant outages to understand the frequency of loss of load events, using a 71 year long time series of climate data. The expected revenue from full winterization is 11.74bn$ over a 30 years investment period. We find that large-scale winterization, in particular of gas infrastructure and gas power plants, would be profitable, as related costs for winterization are substantially lower. At the same moment, the associated investment risks are high due to the low-frequency of events - the 2021 event was the largest and we observe only 8 other similar ones for the simulated 71 years. As risks to investors are considerable, regulatory measures may be necessary to enforce winterization.
    Date: 2021–04
  34. By: Singh, Tejendra Pratap; Visaria, Sujata
    Abstract: Recent work from developed parts of the world has documented a positive association between air pollution and criminal activity. We use high-frequency complaints and air pollution data to estimate air pollution’s causal effects on crime in a developing country. In order to establish causality, we exploit plausibly exogenous local variation in wind direction in an instrumental variable setup. We find that a lower number of complaints are received on the days of high air pollution levels. This effect is more pronounced for property crimes than for violent crimes. Our results are robust to a host of robustness checks and falsification checks. Exploring the potential mechanisms, we find that the decline in criminal activity might result from increased costs of indulging in criminal activity.
    Date: 2021–05–09
  35. By: Griffith, Rachel; O'Connell, Martin; Smith, Kate
    Abstract: We study the introduction of a price floor for alcohol that is aimed at correcting for negative consumption externalities. Policy effectiveness depends on whether the measure achieves large reductions in the most socially costly consumption. We exploit a natural experiment to show the policy raised prices of cheap products favored by heavy consumers, and achieved large demand reductions among this group. We use pre-reform data to estimate a model of consumer demand that is able to match these patterns, and use this to compare the welfare performance of a price floor with the counterfactual introduction of an ethanol tax. We show that if the marginal external cost of drinking is at least moderately higher for heavy drinkers, then a price floor is better targeted at the most socially costly consumption and therefore achieves larger welfare gains than an ethanol tax. Although the price floor leads to a larger fraction of the consumer burden falling on those with low incomes compared with the tax reform, it leads to a consumer burden that is smaller for all income groups.
    Keywords: Alcohol; corrective taxes; externality; price floors
    JEL: D12 D62 H21 H23
    Date: 2020–11
  36. By: Spawn-Lee, Seth A.; Lark, Tyler J.; Gibbs, Holly; Houghton, Richard A.; Kucharik, Christopher J; Malins, Chris; Pelton, Rylie; Robertson, G. Philip
    Abstract: Scully et al [1] in their recent contribution review and revise past life cycle assessments (LCAs) of corn-grain ethanol’s carbon (C) intensity to suggest that a current ‘central best estimate’ is considerably less than all prior estimates. Their conclusion emerges from selection and recombination of sector-specific greenhouse gas emission predictions from disparate studies in a way that disproportionately favors small values and optimistic assumptions without rigorous justification nor empirical support. Their revisions most profoundly reduce predicted land use change (LUC) emissions, for which they propose a central estimate that is roughly half the smallest comparable value they review (Figure 1). Their LUC estimate represents the midpoint of (i) values retained after filtering the predictions of past studies based on a set of unfounded criteria; and (ii) a new estimate they generate for domestic (i.e. U.S.) LUC emissions. The filter the authors apply endorses a singular means of LUC assessment which they assert as the ‘best practice’ despite a recent unacknowledged review [2] that shows this method almost certainly underestimates LUC. Moreover, their domestic C intensity estimate surprisingly suggests that cropland expansion newly sequesters soil C, counter to ecological theory and empirical evidence. These issues, among others, prove to grossly underestimate the C intensity of corn-grain ethanol and mischaracterize the state of our science at the risk of affecting perverse policy outcomes.
    Date: 2021–05–07
  37. By: Sam, Abdoul G.; Abidoye, Babatunde; Mashaba, Sihle
    Abstract: The fifth assessment report of the Intergovernmental Panel on Climate Change and several studies suggest that climate change is expected to increase food insecurity and poverty in many parts of the world. In this paper, we adopt a microeconometric approach to empirically estimate the impact of climate change-induced hikes in cereal prices on household welfare in Swaziland (also Kingdom of Eswatini). We do so first by econometrically estimating expenditure and price elasticities of five food groups consumed by households in Swaziland using the Almost Ideal Demand System (AIDS), based on data from the 2009/2010 Swaziland Household Income and Expenditure Survey. Second, we use the estimated expenditure and compensated elasticities from the AIDS model, food shares from the household survey, and food price projections developed by the International Food Policy Research Institute (IFPRI) to estimate the proportionate increase in income required to maintain the level of household utility that would have prevailed absent an increase in food prices. Our results show increases in cereal prices due to climate change are expected to double extreme poverty in urban areas and increase poverty in rural areas of the country to staggering levels - between 71 and 75%, compared to 63% before the price changes. Income transfers of between 17.5 and 25.4% of pre-change expenditures are needed to avoid the welfare losses.
    Keywords: climate change; welfare; extreme poverty; demand system; Swaziland
    JEL: Q54 Q56 O13 O15 C34 D12
    Date: 2021–04–01
  38. By: Denitsa Angelova (Department of Economics, University Of Venice Cà Foscari; Euro-Mediterranean Center on Climate Change (CMCC)); Francesco Bosello (Department of Economics, University Of Venice Cà Foscari; Euro-Mediterranean Center on Climate Change (CMCC)); Andrea Bigano (Euro-Mediterranean Center on Climate Change (CMCC); RFF-CMCC European Institute on Economics and the Environment (EIEE)); Silvio Giove (Department of Economics, University Of Venice Cà Foscari)
    Abstract: We review the sovereign credit rating methodologies of three credit rating agencies (Moody’s, S&P and Fitch) and analyze how they currently accommodate climate change risk and ESG considerations. We elaborate on the differences between the three rating methodologies and critically evaluate their suitability and limitations. We propose lines of improvement with respect to the indicator selection, normalization, aggregation and weighting procedures as well as the use of the sovereign rating indicator in connection with climate change scenarios.
    Keywords: Climate risk, sovereign risk, sovereign credit, rating agency
    JEL: G24 H63 Q54
    Date: 2021
  39. By: Bardhi, Arjada; Bobkova, Nina
    Abstract: We study optimal minipublic design with endogenous evidence. A policymaker selects a group of citizens-a minipublic-for advice on the desirability of a policy. Citizens can discover local evidence but might be deterred by uncertainty about the policymaker's adoption standard. We show that such uncertainty can be detrimental to evidence discovery even with costless evidence, civic-minded citizens, and ex ante aligned players. Evidence discovery is hardest to sustain under moderate uncertainty. The optimal minipublic has low diversity: it overrepresents citizens around the median citizen and underrepresents those at the margins. Our findings bear implications for the French Citizens' Convention on Climate.
    Keywords: demographic diversity; evidence discovery; informational diversity; minipublic; Political uncertainty
    JEL: D71 D72 D83
    Date: 2021–01
  40. By: Zoe Goss; Daniel Coles; Matthew Piggott
    Abstract: This tidal stream energy industry has to date been comprised of small demonstrator projects made up of one to a four turbines. However, there are currently plans to expand to commercially sized projects with tens of turbines or more. As the industry moves to large-scale arrays for the first time, there has been a push to develop tools to optimise the array design and help bring down the costs. This review investigates different methods of modelling the economic performance of tidal-stream arrays, for use within these optimisation tools. The different cost reduction pathways are discussed from costs falling as the global installed capacity increases, due to greater experience, improved power curves through larger-diameter higher-rated turbines, to economic efficiencies that can be found by moving to large-scale arrays. A literature review is conducted to establish the most appropriate input values for use in economic models. This includes finding a best case, worst case and typical values for costs and other related parameters. The information collated in this review can provide a useful steering for the many optimisation tools that have been developed, especially when cost information is commercially sensitive and a realistic parameter range is difficult to obtain.
    Date: 2021–05
  41. By: Sebastián Scheimberg
    Abstract: El objetivo del presente estudio es analizar la viabilidad y conveniencia económica de promover un Programa de sustitución de combustibles líquidos en el sector de transporte pesado, tanto desde el punto de vista de un inversor privado como desde una perspectiva social. Con ese fin se define un conjunto de precios eficientes de distintos energéticos, a partir de un modelo simple de planificación energética que vincula los precios de mercado con los costos mínimos de producción local. Este modelo, a su vez, toma en cuenta la meta de reducción de emisiones globales de GEI. Luego se define el conjunto de impuestos eficientes, considerando los niveles de emisión de CO2 de cada recurso. Ello conduce a la identificación de los precios sombra de la energía y su ordenamiento en función de los costos económicos. La definición del conjunto de precios sombra resulta un insumo para identificar y ordenar las opciones de fuentes energéticas como reemplazo del gasoil en el transporte de carga y pasajeros. Para eso se realiza un cálculo de Valor Presente Descontado que toma en cuenta los valores de mercado de los distintos vehículos, en función del combustible que utilizan, y sus costos operativos (definidos en el ejercicio de planificación) para identificar las opciones más convenientes desde un punto de vista social.
    JEL: D4
    Date: 2020–11
  42. By: Pullinger, Martin; Berliner, Niklas; Goddard, Nigel; Shipworth, David
    Abstract: In this paper, we describe patterns of residential heating based on data from 255 homes in Edinburgh, Scotland, UK, spanning August 2016 to June 2018. We describe: (i) the room temperatures achieved, (ii) the diurnal durations of heating use, and (iii) common diurnal patterns of heating behaviour. We investigate how these factors vary between weekdays and weekends, over the course of the year, by external temperature, and by room type. We compare these empirical findings with the simplifying assumptions about heating patterns found in the UK's Standard Assessment Procedure (SAP), a widely-used building energy performance model. There are areas of concurrence and others of substantial difference with these model assumptions. Indoor achieved temperatures are substantially lower than SAP assumptions. The duration and timings of heating use varies substantially between homes and along lines of season and outdoor temperature, whereas the SAP model assumes no such variation. Little variation is found along the lines of weekday vs. weekend, whereas the SAP model assumes differences, or between living space and other rooms, consistent with the SAP. The results are relevant for those interested in how SAP assumptions regarding household heating behaviours and achieved indoor temperatures concur with empirical data.
    Date: 2021–05–10
  43. By: Grigolon, Laura
    Abstract: Prominent features of differentiated product markets are segmentation and product proliferation blurring the boundaries between segments. I develop a tractable demand model, the Ordered Nested Logit, which allows for asymmetric substitution between segments. I apply the model to the automobile market where segments are ordered from small to luxury. I find that consumers, when substituting outside their vehicle segment, are more likely to switch to a neighboring segment. Accounting for such asymmetric substitution matters when evaluating the impact of new product introduction or the effect of subsidies on fuel-efficient cars.
    JEL: D11 D12 L62 M3
    Date: 2021–01
  44. By: Arega Getaneh Abate; Rosana Riccardi; Carlos Ruiz
    Abstract: Demand response (DR) programs have gained much attention during the last three decades to optimize the decisions of the electricity market participants considering the demand-side management (DSM). It can potentially enhance system reliability and manages price volatility by modifying the amount or time of electricity consumption. This paper proposes a novel game-theoretical model accounting for the relationship between retailers (leaders) and consumers (followers) in a dynamic price environment where both players optimize their respective economic goals under uncertainty. The model is solved under two frameworks. First by considering retailer's market power and second by accounting for an equilibrium setting based on a Cournot game. These are formulated in terms of a mathematical program with equilibrium constraints (MPEC) and with a mixed-integer linear program (MILP), respectively. In particular, the retailers' market power model is first formulated as a bi-level optimization problem, and the MPEC is subsequently derived by replacing the consumers' problem (lower level) with its Karush-Kuhn-Tucker (KKT) optimality conditions. In contrast, the Cournot equilibrium model is solved as a MILP by concatenating the retailer's and consumers' KKT optimality conditions. The solution sets, the practical approaches for solutions, the required techniques to test and compare the performance of the model are undertaken with realistic data. Numerical simulations confirm the applicability and effectiveness of the proposed model to explore the interactions of markets power and DR programs. The results confirm that consumers are better off in an equilibrium framework while the retailer increases its expected profit when the market power is considered. However, we show how these results are highly affected by the levels of of consumers' flexibility.
    Date: 2021–05
  45. By: Axbard, Sebastian; Deng, Zichen
    Abstract: Government regulations are often imperfectly enforced by public officials. In this study, we investigate if real-time monitoring of policy outcomes can improve enforcement of existing regulations by exploring the introduction of air pollution monitors in China. Exploiting assignment criteria established by the central government and new geo-referenced data on local enforcement activities, we show that monitoring: 1) increases enforcement against local firms, 2) improves the targeting of enforcement, and 3) reduces aggregate pollution. These effects are driven by officials facing performance incentives and are stronger when there is limited scope for data manipulation, suggesting that real-time monitoring improves top-down accountability.
    Keywords: accountability; China; pollution; Regulatory Enforcement
    JEL: O13 Q53 Q58
    Date: 2020–12
  46. By: Andrea La Nauze; Edson R. Severnini
    Abstract: We exploit novel data from brain-training games to examine the impacts of air pollution on a comprehensive set of cognitive skills of adults. We find that exposure to particulate matter (PM2.5) impairs adult cognitive function, and that these effects are largest for those in prime working age. These results confirm a hypothesized mechanism for the impacts of air pollution on productivity. We also find that the cognitive effects are largest for new tasks and for those with low ability, suggesting that air pollution increases inequality in workforce productivity.
    JEL: I14 I24 J24 Q53
    Date: 2021–05
  47. By: Patrick Guillaumont (FERDI - Fondation pour les Etudes et Recherches sur le Développement International); Sylviane Guillaumont Jeanneney (FERDI - Fondation pour les Etudes et Recherches sur le Développement International); Laurent Wagner (FERDI - Fondation pour les Etudes et Recherches sur le Développement International)
    Abstract: S'il devient possible de mobiliser des financements extérieurs importants à destination des pays africains, il faut simultanément s'interroger sur la façon dont ces flux seront répartis entre les différents pays. Les questions auxquelles le Sommet doit faire face sont à la fois celle des besoins de financement relatifs de l'Afrique et celle des besoins respectifs des différents pays africains. En effet, ces pays n'ont pas tous les mêmes besoins, ni la même capacité d'absorption.
    Date: 2021
  48. By: Sosson Tadadjeu (University of Dschang , Cameroon); Henri Njangang (University of Dschang , Cameroon); Simplice A. Asongu (Yaoundé, Cameroon); Brice Kamguia (University of Dschang , Cameroon)
    Abstract: This paper contributes to the literature by investigating the effect of natural resources on under-five mortality in a sample of 50 African countries over the period 1996 to 2018. We also examine the extent to which governance shapes the relationship between natural resources and under-five mortality. Our results show that natural resources have increased under-five mortality. Resource rents also have detrimental effects on child mortality by age, gender, and the three major causes of infant mortality from infectious diseases. However, an extended analysis of different types of natural resources suggests that point resources (such as oil, natural gas and mineral rents) increase under-five mortality, in contrast to the diffuse resources (such as forest rent). We also find that governance mitigates the positive effect of natural resources on child mortality. Corresponding governance policy thresholds that should be attained in order to reverse the positive effects of natural resources on child mortality are provided. We thus suggest an increase in the funds allocated to the health sector from resource rents and encourage efforts to improve governance standards in sampled countries.
    Keywords: Natural resources; Child mortality; Governance; Africa
    JEL: J13 O55 Q33 Q34 Q38
    Date: 2021–05
  49. By: Alexander Nollau; Friedrich Thieszen (Aviation Working Group, TU Chemnitz)
    Abstract: Many current problems in air traffic are related to the number of aircraft movements. Over-crowding in the airspace, difficult coordination at airports, high emissions of noise and pollu-tants as well as complexity of airlines are side effects of too many aircraft movements.This study examines the extent to which the number of flight movements in Europe can be reduced without change in transport performance. For this purpose, the number of flight move-ment for a European network of the 140 most frequently flown serviced routes will be opti-mised. The reference date is November 17th, 2017.It shows that with the same passenger transport performance, the number of flight movements can be reduced to 1/3 of the current level (from 2.040 flights per day to 738 flights per day). In some cases, the quality of the connections can even be improved because all flights in the optimised network are coordinated.This proves that the current air traffic structure has considerable weak points. There are too many redundant aircraft movements. Our proposed reform measures can contribute to the needed reduction in the number of aircraft movements without reducing passenger transport services and travel quality.
    Date: 2021–05
  50. By: Alexander Nollau; Friedrich Thieszen (Arbeitskreis Luftverkehr, TU Chemnitz)
    Abstract: Viele aktuelle Probleme im Luftverkehr haengen mit der Zahl der Flugbewegungen zusammen. Ueberfuellungen im Luftraum, erschwerte Koordination an Flughaefen, hohe Emissionen von Laerm und Schadstoffen sowie grosze Komplexitaet der Airlines sind Begleiterscheinungen zu vieler Flugbewegungen. Die vorliegende Studie untersucht, auf welchen Umfang sich die Zahl der Flugbewegungen in Europa bei unveraenderter Transportleistung reduzieren laesst. Dazu wird eine Optimierung der Flugbewegungszahlen fuer ein europaeisches Flugnetz der 140 meistbeflogenen Strecken vor-genommen. Stichtag ist der 17. November 2017. Es zeigt sich, dass bei gleicher Passagiertransportleistung die Zahl der Flugbewegungen auf 1/3 des gegenwaertigen Niveaus reduziert werden kann (von 2.040 Fluegen pro Tag auf 738 Fluege pro Tag). Dabei kann die Verbindungsguete teilweise sogar verbessert werden, weil alle Fluege des Netzes aufeinander abgestimmt sind. Das bedeutet: Die gegenwaertige Luftverkehrsstruktur besitzt erhebliche Reserven. Es gibt zu viele Flugbewegungen, die redundant sind. Es werden im Beitrag Reformmasznahmen vorgeschlagen, die zu einer Verringerung der Zahl der Flugbewegungen (ohne die Passagiertransportleistungen und Reiseguete zu verringern) beitragen koennen.
    Date: 2021–05

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