nep-ene New Economics Papers
on Energy Economics
Issue of 2021‒06‒28
fifty-two papers chosen by
Roger Fouquet
London School of Economics

  1. Applying endogenous learning models in energy system optimization By Jabir Ali Ouassou; Julian Straus; Marte Fodstad; Gunhild Reigstad; Ove Wolfgang
  2. The Electricity- and CO2-Saving Potentials Offered by Regulation of European Video-Streaming Services By Madlener, Reinhard; Sheykkha, Siamak; Briglauer, Wolfgang
  3. An Integration and Operation Framework of Geothermal Heat Pumps in Distribution Networks By Lei Liang; Xuan Zhang; Hongbin Sun
  4. Evaluation of Alternative Power-to-Chemical Pathways for Renewable Energy Exports By Rasool, Muhammad; Khalilpour, Kaveh; Rafiee, Ahmad; Karimi, Ifthekar; Madlener, Reinhard
  5. How Cost-Effective Are Electric Vehicle Subsidies in Reducing Tailpipe-CO2 Emissions? By Tamara Sheldon; Rubal Dua; Omar Al Harbi
  6. The Macro Effects of Climate Policy Uncertainty By Stephie Fried; Kevin Novan; William B. Peterman
  7. 'Bad' Oil, 'Worse' Oil and Carbon Misallocation By Renaud Coulomb; Fanny Henriet; Léo Reitzmann
  8. COMMIT TO A CREDIBLE PATH OF RISING CO2 PRICES By Olijslager, Stan; van der Ploeg, Frederick; van Wijnbergen, Sweder
  9. A Quantitative Model of the Oil Tanker Market in the Arabian Gulf By Kilian, Lutz; Nomikos, Nikos; Zhou, Xiaoqing
  10. Can European businesses achieve productivity gains from investments in energy efficiency? By Kalantzis, Fotios; Niczyporuk, Hanna
  11. When Do Environmental Externalities Have Electoral Consequences? Evidence from Fracking By Judson Boomhower
  12. Cap-and-trade and produce at least cost? Investigating firm behaviour in the EU ETS By Zarkovic, Maja
  13. Household energy poverty and children’s health By Mohan, Gretta
  14. Towards a Green New Deal: Scenarios for the US Transition to Renewable Energy and Green Infrastructure By Khan, Haider
  15. Linking sustainable energy consumption and adaptation policies against floods By Tovar Reaños, Miguel
  16. Pathways towards a net-zero carbon emissions cement: a modelling-based approach integrating demand and supply By Kimon Keramidas; Silvana Mima; Adrien Bidaud
  17. Economic Analysis of Gas Pipeline Trade Cooperation: A GCC Case Study By Bertrand Rioux; Rami Shabaneh; Steve Griffiths
  18. Unobserved technological heterogeneity among German electricity distribution network operators - a latent class analysis By Just, Lisa
  19. What Matters for Private Investment Financing in Renewable Energy Globally and in Asia? By Azhgaliyeva, Dina; Beirne, John; Mishra, Ranjeeta
  20. Do People Respond to the Climate Impact of their Behavior? The Effect of Carbon Footprint Information on Grocery Purchases By Toke R. Fosgaard; Alice Pizzo; Sally Sadoff
  21. Economic growth and Co2 emissions: Evidence from heterogeneous panel of African countries using bootstrap Granger causality By Espoir, Delphin Kamanda; Sunge, Regret; Bannor, Frank
  22. Effective Climate Policy Needs Non-combustion Uses for Hydrocarbons By Konrad, Kai A.; Lommerud, Kjell Erik
  23. Probabilistic Forecasting of Imbalance Prices in the Belgian Context By Jonathan Dumas; Ioannis Boukas; Miguel Manuel de Villena; S\'ebastien Mathieu; Bertrand Corn\'elusse
  24. No country is an island: international cooperation and climate change By Ferrari, Massimo; Pagliari, Maria Sole
  25. Can adjustment costs in research derail the transition to green growth? By Laura Nowzohour
  26. National Transmission System Operators in an International Electricity Market By Horn, Henrik; Tangerås, Thomas
  27. Future Paths of Electric Vehicle Adoption in the United States: Predictable Determinants, Obstacles and Opportunities By James E. Archsmith; Erich Muehlegger; David S. Rapson
  28. Relational Voluntary Environmental Agreements when Emissions Are Unverifiable By Berardino Cesi; Alessio D'Amato
  29. Internal and external effects of pricing short-term gas transmission capacity via multipliers By Çam , Eren; Lencz, Dominic
  30. Regional development trajectories of renewable energy: Evidence from French regions By F. Roussafi
  31. Financial Development, Human Capital Development and Climate Change in East and Southern Africa By Olatunji A. Shobande; Simplice A. Asongu
  32. Recycling Carbon Tax Revenue to Maximize Welfare By Stephie Fried; Kevin Novan; William B. Peterman
  33. Does Tax Policy Work When Consumers Have Imperfect Price Information? Theory and Evidence By Felix Montag; Alina Sagimuldina; Monika Schnitzer
  35. Long-Run Consequences of Population Decline in an Economy with Exhaustible Natural Resources By Kazuo Mino; Hiroaki Sasaki
  36. An Evolutionary Analysis of Transformative Change in LDCs: the cases of Kenya and Rwanda By Jan Fagerberg; Erika Kraemer-Mbula; Edward Lorenz
  37. Differentiated goods in a dynamic Cournot duopoly with emission charges on outputs By Ahmad Naimzada; Marina Pireddu
  38. Infrastructure development as a prerequisite for structural change in Africa By Yselle F. Malah Kuete; Simplice A. Asongu
  39. Linear and non-linear effects of infrastructures on inclusive human development in Africa By Tii N. Nchofoung; Simplice A. Asongu; Arsène A. Njamen Kengdo; Elvis D. Achuo
  40. Designing effective and acceptable road pricing schemes: evidence from the Geneva congestion charge By Baranzini, Andrea; Carattini, Stefano; Tesauro, Linda
  41. The Social Power of Spillover Effects: Educating Against Environmental Externalities By Andri Brenner
  42. Greenhouse gases mitigation: Global externalities and short termism By Giovanni Di Bartolomeo; Behnaz Minooei Fard; Willi Semmler
  43. Green and Simple: Effective eco-labelling for busy consumers By Ní Choisdealbha, Áine; Lunn, Pete
  44. Metodología para la estimación del precio social del carbono en Chile y los países de América Latina y el Caribe By Cartes Mena, Fernando
  45. Physicsmetrics, another approach to model physics systems. Application on solar panel behaviour. Advantages and complementarities with the physic’s approach. By Leila, Ouzeri
  46. Neuroticism Mediates the Relationship Between Industrial History and Modern-Day Regional Obesity Levels By Daly, Michael; Obschonka, Martin; Stuetzer, Michael; Sutin, Angelina; Shaw-Taylor, Leigh; Satchell, Max; Robinson, Eric
  47. Sostenibilidad del aporte de los sectores extractivos al crecimiento económico en el mediano y largo plazo By Joab D. Valdivia C.; Angélica C. Calle S.; Juan C. Carlo S.; Rolando E. Paz R.
  48. Consumption-Based Asset Pricing When Consumers Make Mistakes By Christopher Anderson
  49. Évaluation économétrique de l’impact des Instituts de Recherche Technologique (IRT) et des Instituts pour la Transition Énergétique (ITE) By Patrick Eparvier; Aurélien Fichet de Clairfontaine; Alain N'Ghauran; Aurélien Seawert; Corinne Autant-Bernard; Ruben Fotso; Antoine Schoen; Patricia Laurens
  50. The market price of greenness A factor pricing approach for Green Bonds By Beatrice Bertelli; Gianna Boero; Costanza Torricelli
  51. Danger, Respect, and Indifference: Bike-Sharing Choices in Shanghai and Tokyo using Latent Choice Models By Yoo, Sunbin; Hong, Sungwan; Park, Yeongkyung; Okuyama, Akihiro; Zhang, Zhaozhe; Yoshida, Yoshikuni; Managi, Shunsuke
  52. Climate Risk and the Fed: Preparing for an Uncertain Certainty By Mary C. Daly

  1. By: Jabir Ali Ouassou; Julian Straus; Marte Fodstad; Gunhild Reigstad; Ove Wolfgang
    Abstract: Conventional energy production based on fossil fuels causes emissions which contribute to global warming. Accurate energy system models are required for a cost-optimal transition to a zero-emission energy system, an endeavor that requires an accurate modeling of cost reductions due to technological learning effects. In this review, we summarize common methodologies for modeling technological learning and associated cost reductions. The focus is on learning effects in hydrogen production technologies due to their importance in a low-carbon energy system, as well as the application of endogenous learning in energy system models. Finally, we present an overview of the learning rates of relevant low-carbon technologies required to model future energy systems.
    Date: 2021–06
  2. By: Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)); Sheykkha, Siamak (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)); Briglauer, Wolfgang (Vienna University of Economics and Business)
    Abstract: Massive increases in Internet data traffic over the last years have led to rapidly rising electricity demand and CO2 emissions, giving rise to environmental externalities and network congestion costs. One particular concern is the rise in data traffic generated by video-streaming services. We analyze the electricity-saving potential related to video streaming in Europe from 2020 to 2030. To this end, three trend scenarios (Business-as-usual, Gray, and Green) are considered and modeled bottom-up, taking specific energy consumption (and trends) of data transmission networks, end-use devices, and data centers into account. Using these scenarios, we examine in more detail the approximate energy-saving impact that regulatory interventions and technical standards can have on the electricity consumption of end-users, network operators, and data centers. The model results reveal that regulatory intervention can have a significant impact on energy consumption and CO2 emissions. As technical regulation carries the risk of stymieing innovation and dynamic efficiency, we propose economic regulation in terms of a mandatory transit fee as a long-term solution.
    Keywords: Video streaming; Scenario analysis; Electricity-saving potential; Energy efficiency improvement; User behavior; Market failure; Internet traffic regulation
    JEL: D62 L82 L96 O33 O52 P48 Q47 Q48
    Date: 2021–05
  3. By: Lei Liang; Xuan Zhang; Hongbin Sun
    Abstract: The application of the energy-efficient thermal and energy management mechanism in Geothermal Heat Pumps (GHPs) is indispensable to reduce the overall energy consumption and carbon emission across the building sector. Besides, in the Virtual Power Plant (VPP) system, the demand response of clustered GHP systems can improve the operating flexibility of the power grid. This paper presents an integration and operation framework of GHPs in the distribution network, applying a layered communication and optimization method to coordinate multiple clustered GHPs in a community. In the proposed hierarchical operation scheme, the operator of regional GHPs collects the thermal zone information and the disturbance prediction of buildings in a short time granularity, predicts the energy demand, and transmits the information to an aggregator. Using a novel linearized optimal power flow model, the aggregator coordinates and aggregates load resources of GHP systems in the distribution network. In this way, GHP systems with thermal and energy management mechanisms can be applied to achieve the demand response in the VPP and offer more energy flexibility to the community.
    Date: 2021–06
  4. By: Rasool, Muhammad (University of Technology Sydney, Australia); Khalilpour, Kaveh (University of Technology Sydney, Australia); Rafiee, Ahmad (Dana Cluster Pty Ltd., Sydney, Australia); Karimi, Ifthekar (National University of Singapore); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))
    Abstract: Over the last five decades, there have been a few phases of interest in the so-called hydrogen economy, stemming from the need for either energy security enhancement or climate change mitigation. None of these phases has been successful in a major market development mainly due to the lack of cost competitiveness and partially due to technology readiness challenges. Nevertheless, a new phase has begun very recently, which despite holding original objectives has a new motivation to be fully green, based on renewable energy. This new movement has already initiated bipartisan cooperation of some energy importing countries and those with abundant renewable energy resources and supporting infrastructure. For example, the abundance of renewable resources and a stable economy of Australia can attract investments in building these green value chains with countries such as Singapore, South Korea, Japan, and those even further distant like in Europe. One key challenge in this context is the diversity of pathways for the (national and international) export of non-electricity renewable energy. This poses another challenge, i.e., the need for an agnostic tool for comparing various supply chain pathways fairly while considering various techno-economic factors such as renewable energy sources, hydrogen production and conversion technologies, transport, and destination markets, along with all associated uncertainties. This paper addresses the above challenge by introducing a probabilistic decision analysis cycle methodology for evaluating various renewable energy supply chain pathways based on the hydrogen vector. The decision support tool is generic and can accommodate any kind of renewable chemical and fuel supply chain option. As a case study, we have investigated eight supply chain options composed of two electrolysers (alkaline and membrane) and four carrier options (compressed hydrogen, liquefied hydrogen, methanol, and ammonia) for export from Australian ports to three destinations in Singapore, Japan, and Germany. The results clearly show the complexity of decision making induced by multiple factors.
    Keywords: Hydrogen economy; renewable hydrogen vector; renewable energy utilisation; renewable energy supply chain; decision analysis cycle; expected levelised cost of hydrogen (ELCOH)
    JEL: Q40
    Date: 2021–05
  5. By: Tamara Sheldon; Rubal Dua; Omar Al Harbi (King Abdullah Petroleum Studies and Research Center)
    Abstract: The transportation sector accounts for 24% of global greenhouse gas (GHG) emissions (IEA 2020). Road transport is the most utilized mode because of its convenience (Van Essen 2008). However, it is also the most emissions intensive mode, accounting for 75% of global transport GHG emissions, with roughly 44% coming from road passenger vehicles alone (IEA 2020).
    Keywords: Fleet Fuel Economy, Freight transport activity,
    Date: 2021–06–08
  6. By: Stephie Fried; Kevin Novan; William B. Peterman
    Abstract: Uncertainty surrounding if and when the U.S. government will implement a federal climate policy introduces risk into the decision to invest in capital used in conjunction with fossil fuels. To quantify the macroeconomic impacts of this climate policy risk, we develop a dynamic, general equilibrium model that incorporates beliefs about future climate policy. We find that climate policy risk reduces carbon emissions by causing the capital stock to shrink and become relatively cleaner. Our results reveal, however, that a carbon tax could achieve the same reduction in emissions at less than half the cost.
    Keywords: Climate Policy; Policy Uncertainty
    JEL: H30 Q58 H23
    Date: 2021–03–19
  7. By: Renaud Coulomb (University of Melbourne); Fanny Henriet (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Léo Reitzmann (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: Not all barrels of oil are created equal: their extraction varies in both private cost and carbon intensity. Using a rich micro-dataset on World oil fields and estimates of their carbon intensities and private extraction costs, this paper quantifies the additional emissions and costs from having extracted the 'wrong' deposits. We do so by comparing historic deposit-level supplies to counterfactuals that factor in pollution costs, while keeping annual global consumption unchanged. Between 1992 and 2018, carbon misallocation amounted to at least 10.02 GtCO 2 with an environmental cost evaluated at US$ 2 trillion (US$ 2018). This translates into a significant supply-side ecological debt for major producers of dirty oil. Looking towards the future, we estimate the gains from making deposit-level extraction socially-optimal, and document the very unequal distribution of the subsequent stranded oil reserves across countries.
    Keywords: climate change,oil,carbon mitigation,misallocation,stranded assets
    Date: 2021–06
  8. By: Olijslager, Stan; van der Ploeg, Frederick; van Wijnbergen, Sweder
    Abstract: CO2 pricing is essential for an efficient transition to the green economy. Despite Daniel, Litterman and Wagner (2019)' claim that CO2 prices should decline, CO2 prices should rise over time. First, damages from global warming are proportional to economic activity and this makes CO2 prices grow at the same rate as the economy. Second, even if uncertainty about the damage ratio is gradually resolved over time, this only slows down the price rise. Third, if CCS is allowed for, the optimal CO2 price will rise before it declines but this decline does not occur until more than two centuries ahead. Fourth, damages are likely to be a very convex function of temperature which with rising temperature implies that CO2 prices must grow faster than the economy. Fifth, internalizing the social benefits of learning by doing or a shift towards technical progress in renewable energy production requires a subsidy for renewable energy, not a temporary spike in CO2 prices. Having high CO2 prices upfront is an artefact of failing to separate out renewable energy subsidies from the carbon price. Finally, efficient intertemporal allocation of policy efforts implies that a temperature cap or cap on cumulative emissions requires that CO2 prices must rise at a rate equal to the risk-adjusted interest rate, typically higher than the economic growth rate. Summing up, CO2 prices must rise at a rate at least equal to the economic growth rate and at most to the risk-adjusted interest rate. They should not decline.
    Keywords: CO2 prices; Damages; risk
    JEL: H23 Q51 Q54
    Date: 2020–05
  9. By: Kilian, Lutz; Nomikos, Nikos; Zhou, Xiaoqing
    Abstract: Using a novel dataset, we develop a structural model of the Very Large Crude Carrier (VLCC) market between the Arabian Gulf and the Far East. We study how fluctuations in oil tanker rates, oil exports, shipowner profits, and bunker fuel prices are determined by shocks to the supply and demand for oil tankers, to the utilization of tankers, and to bunker fuel costs. Our analysis shows that time charter rates respond only slightly to fuel cost shocks. In response to higher fuel costs, voyage profits decline, as cost shocks are only partially passed on to round-trip voyage rates. Oil exports from the Arabian Gulf also decline, reflecting lower demand for VLCCs. Positive utilization shocks are associated with higher profits, a slight increase in time charter rates and slightly lower fuel prices and oil export volumes. Tanker supply and tanker demand shocks have persistent effects on time charter rates, round-trip voyage rates, the volume of oil exports, fuel prices, and profits with the expected sign.
    Keywords: bunker fuel; crude oil; exports; Pass-Through; profits; shipping; tanker; time charter; VLCC; voyage
    JEL: Q43 R41
    Date: 2020–05
  10. By: Kalantzis, Fotios; Niczyporuk, Hanna
    Abstract: Energy efficiency investments are essential for transitioning to a carbon-neutral economy. Nevertheless, despite being financially viable, many energy efficiency investment opportunities do not materialise. The existing literature attributes this situation to financial and non-financial factors. Research suggests that many firms focus only on direct energy savings and neglect non-energy benefits that include increased labour productivity. Up to date, due to lack of high-quality data, few studies attempted to quantify the effects of the energy efficiency investments on firm-level outcomes other than the reductions in energy consumption. This paper overcomes this barrier by using novel data from a firm-level survey conducted by the European Investment Bank that covers more than 15,000 firms in 27 European Union member states and the UK during 2018-2019. It studies the relationship between the energy efficiency investment and the labour productivity of the European firms, utilising instrumental variables methodology to account for potential endogeneity. The results show a positive and causal relationship between energy efficiency investment and labour productivity. The findings of the paper suggest that firms can benefit much more from the energy efficiency investment than what is often assumed, and highlight a need for government policies that would increase firms' awareness of the non-energy benefits.
    Keywords: Energy Efficiency,Climate Investment,Productivity
    Date: 2021
  11. By: Judson Boomhower
    Abstract: The electoral salience of some issues may diminish when one politician has authority over many policy areas. This study measures the role of environmental regulation in concurrent elections for governors and specialized energy regulators in two U.S. states. I first show that while both offices can influence environmental and energy policies, quantitative analysis of campaign news coverage reveals clear differences in the importance of these issues in the two races. Next, I use geologic variation in earthquakes caused by oil and gas production to measure the electoral consequences of a costly environmental externality. There are measurable effects only in the energy regulator race. These results are consistent with theories of issue bundling. Finally, the unbundling effects that I measure appear to be themselves limited by voter attentiveness and partisanship.
    JEL: D72 H11 Q35 Q58
    Date: 2021–05
  12. By: Zarkovic, Maja (University of Basel)
    Abstract: A persistent concern in the literature on climate policy is that the emissions abatement, which is achieved via environmental regulation, has potentially adverse affects on firms' economic performance. I investigate this issue in the context of the European Union Emissions Trading Scheme (EU ETS) and the German manufacturing sector. My investigation uses confidential data from an administrative firm-level production census. As a measure of the economic performance, I estimate cost efficiencies and their determinants for narrowly defined industries with a stochastic cost frontier (SCF) analysis. In order to directly compare cost efficiencies across treatment groups, I use a stochastic meta frontier (SMF) analysis. I provide additional evidence of the causal impact of the EU ETS on various types of firms` costs with a difference-in-differences (DD) framework. My results indicate that the EU ETS regulation has resulted in a small but significant increase in costs across the German manufacturing sector. This increase is driven mostly by an increase in energy and capital costs. I demonstrate that the potential to increase cost efficiency exists for most industries in the German manufacturing sector. The analysis of the drivers of cost efficiency confirms that in most industries, exporting firms are more cost efficient than their counterparts. In contrast, the results show that innovating firms and firms that are regulated by the EU ETS are less cost efficient than unregulated firms.
    Keywords: Stochastic Frontier Analysis, Meta Frontier Analysis, EU ETS, Manufacturing Sector
    JEL: D22 D24 N64 Q52
    Date: 2020–09–30
  13. By: Mohan, Gretta
    Date: 2020
  14. By: Khan, Haider
    Abstract: ABSTRACT With the election of Biden as the next US President and Harris as his Vice President, hopes regarding mitigating global climate change through renewable energy transitions have received a new impetus. Using data from the 2019 input-output table, a set of multipliers are computed for the US. Three different scenarios for transition to renewable energy are computed and analyzed using two different methodologies. It turns out that even modest changes in the direction of renewable energy transitions will help both mitigation of global warming and create new decent jobs in many sectors. Under the first methodology, the study found that with a 0.5% of GDP investment (107.15 billion), uniformly distributed across all sectors of the economy, a total of 388,089 jobs will be created in the renewable energy sector, the number doubles and quadruples to of 776,178 and 1,552,355 accordingly for 1% and 2% of GDP investments. Even under the second methodology, which only focuses on job-growth in the energy-intensive sectors, 1,406,466 would be created in the low assessment, 2,812,933 in the medium, and 5,625,866 jobs will be generated in the high assessment scenarios. Similar trends are seen output growth as well. Thus, there can be a double dividend from a set of renewable energy production and investment policies.
    Keywords: Keywords: Renewable energy, GDP, Biden, Harris
    JEL: A1 E0
    Date: 2020–11–02
  15. By: Tovar Reaños, Miguel
    Date: 2020
  16. By: Kimon Keramidas (Joint Research center - European Commission); Silvana Mima (GAEL - Laboratoire d'Economie Appliquée de Grenoble - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes); Adrien Bidaud (Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes)
    Keywords: Decarbonation reaction,Transition,Cement
    Date: 2021–06–07
  17. By: Bertrand Rioux; Rami Shabaneh; Steve Griffiths (King Abdullah Petroleum Studies and Research Center)
    Abstract: Natural gas development across the member states of the Gulf Cooperation Council (GCC) — including Saudi Arabia, the United Arab Emirates (UAE), Qatar, Kuwait, Oman and Bahrain —has become a priority for achieving long-term energy security and for supporting economic diversification initiatives (Shabaneh et al. 2020).
    Keywords: Natural Gas, Infrastructure, GCC Countries
    Date: 2021–03–23
  18. By: Just, Lisa (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI))
    Abstract: Accounting for network operators’ heterogeneity is of crucial importance for regulators. In contrast to observed heterogeneity, the consideration of unobserved differences is far more challenging. Most estimation models try to account for unobserved factors that impact the network operators’ costs and performance but neglect the possibility of heterogeneous technologies. Assuming a common technology represented by a joint cost function across network operators implies, e.g., identical marginal costs and economies of scale for all network operators. As it is questionable that this assumption holds in practice, efficiency estimates may be biased as technological heterogeneity is misunderstood as inefficiency. To overcome this misspecification, a latent class model is applied to a comprehensive database of German electricity distribution network operators between the years 2011 and 2017, explicitly accounting for technological differences across network operators. The results indicate that German distribution network operators can be unambiguously classified into three statistically different classes that share a common cost function. The findings show significant differences in the size, capacity of distributed generation from renewable energy sources and identify distributed generation capacity as an important driver of the network operators’ technology.
    Keywords: Electricity distribution; latent class models; regulation; stochastic frontier analysis; unobserved heterogeneity
    JEL: D24 L51 L94
    Date: 2021–06–21
  19. By: Azhgaliyeva, Dina (Asian Development Bank Institute); Beirne, John (Asian Development Bank Institute); Mishra, Ranjeeta (Asian Development Bank Institute)
    Abstract: We examine the drivers of private investment in renewable energy by source of funding for 13 global economies over the period 2008 to 2018, with a focus on a sub-panel of Asian economies. Using a seemingly unrelated regression model, we provide a first quantitative estimate of the effect of government renewable energy policies on private investments across different sources of financing. Our results indicate that feed-in-tariffs (FITs) have the greatest overall effect in Asia on driving private investment in renewable energy, particularly from asset finance compared with other funding sources. The impact of FITs in Asia is also greater than that of the global sample. The impact of FITs is amplified in the presence of lower regulatory quality, which may be related to ease of market entry. We also find an important role in Asia for government expenditure on research and development in stimulating private investment. The magnitudes of the effects in Asia are broadly in line with the overall global sample. Finally, we find that technology costs, are less elastic on private investment in Asia compared with globally in affecting private investment in renewable energy across all funding sources, which may be related to the prevailing strong cost competitiveness of Asian economies in renewable energy provision.
    Keywords: private investment; public investment; renewable energy; green investment; feed-in tariff
    JEL: O30 O38 Q28 Q42
    Date: 2021–06–20
  20. By: Toke R. Fosgaard (Department of Food and Resource Economics, University of Copenhagen); Alice Pizzo (Department of Food and Resource Economics, University of Copenhagen); Sally Sadoff (Rady School of Management, University of California, San Diego)
    Abstract: Food production is a primary contributor to climate change with greenhouse gas (GHG) emissions varying widely across food groups. In a randomized experiment, we examine the impact of providing individualized information on the GHG emissions of grocery purchases via a smartphone app, compared to providing information on spending. Carbon footprint information decreases GHG emissions from groceries by an estimated 27% in the first month of treatment, with an estimated 45% reduction in emissions from beef, the highest emissions food group. Treatment effects fade in the longer-run along with app engagement. However, we find evidence of persistent effects among those who remain engaged with the app. Our results suggest that individualized carbon footprint information can reduce the climate impact of food consumption but requires sustained engagement.
    Keywords: Field Experiment, Pro-environmental Behavior, Carbon Footprint, Food Consumption, Consumer Behavior
    JEL: C93 D11 D91 Q5
    Date: 2021–06
  21. By: Espoir, Delphin Kamanda; Sunge, Regret; Bannor, Frank
    Abstract: The relationship between economic growth and environmental pollution continues to attract undying research interest. While existing studies focused on examining the relationship from growth to pollution or pollution to growth, research on the causal relationship between the two variables is still lacking. This study examined the causal relationship between growth and Co2 emissions across 47 African countries using annual panel data from 1995-2016. Unlike other studies in Africa, the uniqueness of this paper is that we employed the methodology developed by Emirmahmutoğlu and Kose (2011), which considers cross-sectional dependence and slope heterogeneity. The empirical results of the study are as follows: (1) the analysis underpinned a bidirectional causal relationship between growth and Co2 emissions in three countries (Burkina Faso, Mauritania, and the Congo Republic), (2) a unidirectional relationship running from growth to Co2 emissions in seven countries (Niger, Sierra Leone, Angola, Mauritius, Mozambique, Uganda, and Kenya), and (3) a unidirectional relationship running from Co2 emissions to growth in nine countries (Lesotho, Namibia, Tanzania, Egypt, Libya, Chad, Ethiopia, Gabon, and Central African Republic (CAR). The results also suggested the neutrality hypothesis for the rest of the countries that were not part of these three groups. Henceforth, we provided policy implications based on the four groups’ results.
    Keywords: Economic development,Environmental pollution,Cross sectional dependence,Heterogeneity,Granger Causality,Africa
    JEL: Q53 Q54 Q56
    Date: 2021
  22. By: Konrad, Kai A. (Max Planck Institute for Tax Law and Public Finance); Lommerud, Kjell Erik (University of Bergen)
    Abstract: A central issue that is discussed in climate policy is the fear of owners of stocks of fossil hydrocarbon deposits that high CO2 taxes and bans on the combustion use of hydrocarbons will turn their stocks into stranded assets. They might react by extracting and selling their reserves today: a rush to burn results. We show how the stranded-asset problem could be avoided or strongly moderated. We analyze a simple intertemporal equilibrium with a given stock of fossil hydrocarbons. In this framework the following properties hold: For a climate-neutral solution to the rush-to-burn problem it is important to maintain existing and generate new markets for climate-neutral products from fossil hydrocarbons in the future, where we give examples for such products. Subsidies for such products (or for their innovation) reduce the rush-to-burn problem. In contrast, the creation of substitutes for fossil hydrocarbon-based climate-neutral products, or subsidies for such products reduce the market for products made from fossil hydrocarbons. This can aggravate the stranded-assets problem and thus can have a climate-damaging effect.
    Keywords: green paradox, rush to burn, catalytic pyrolysis, hydro-carbons, plastics
    JEL: Q54 Q35
    Date: 2021–06
  23. By: Jonathan Dumas; Ioannis Boukas; Miguel Manuel de Villena; S\'ebastien Mathieu; Bertrand Corn\'elusse
    Abstract: Forecasting imbalance prices is essential for strategic participation in the short-term energy markets. A novel two-step probabilistic approach is proposed, with a particular focus on the Belgian case. The first step consists of computing the net regulation volume state transition probabilities. It is modeled as a matrix computed using historical data. This matrix is then used to infer the imbalance prices since the net regulation volume can be related to the level of reserves activated and the corresponding marginal prices for each activation level are published by the Belgian Transmission System Operator one day before electricity delivery. This approach is compared to a deterministic model, a multi-layer perceptron, and a widely used probabilistic technique, Gaussian Processes.
    Date: 2021–06
  24. By: Ferrari, Massimo; Pagliari, Maria Sole
    Abstract: In this paper we explore the cross-country implications of climate-related mitigation policies. Specifically, we set up a two-country, two-sector (brown vs green) DSGE model with negative production externalities stemming from carbon-dioxide emissions. We estimate the model using US and euro area data and we characterize welfare-enhancing equilibria under alternative containment policies. Three main policy implications emerge: i) fiscal policy should focus on reducing emissions by levying taxes on polluting production activities; ii) monetary policy should look through environmental objectives while standing ready to support the economy when the costs of the environmental transition materialize; iii) international cooperation is crucial to obtain a Pareto improvement under the proposed policies. We finally find that the objective of reducing emissions by 50%, which is compatible with the Paris agreement's goal of limiting global warming to below 2 degrees Celsius with respect to pre-industrial levels, would not be attainable in absence of international cooperation even with the support of monetary policy. JEL Classification: F42, E50, E60, F30
    Keywords: climate modelling, DSGE model, open-economy macroeconomics, optimal policies
    Date: 2021–06
  25. By: Laura Nowzohour
    Abstract: Adjustment costs are a central bottleneck of the real-world economic transition essential for achieving the sizeable reduction of greenhouse gas (GHG) emissions set out by policy makers. Could these costs derail the transition process to green growth, and if so, how should policy makers take this into account? I study this issue using the model of directed technical change in Acemoglu, Aghion, Bursztyn, and Hemous (2012), AABH, augmented by a friction on the choice of scientists developing better technologies. My results show that such frictions, even minor, materially affect the outcome. In particular, the risk of reaching an environmental disaster is higher than in the baseline AABH model. Fortunately, policy can address the problem. Specifically, a higher carbon tax ensures a disaster-free transition. In this case, the re-allocation of research activity to the clean sector happens over a longer but more realistic time horizon, namely around 15 instead of 5 years. An important policy implication is that optimal policies do not act over a substantially longer time horizon but must be more aggressive today in order to be effective. In turn, this implies that what may appear as a policy failure in the short-run — a slow transition albeit aggressive policy — actuallyreflects the efficient policy response to existing frictions in the economy. Furthermore, the risk of getting environmental policy wrong is highly asymmetric and "robust policy" implies erring on the side of stringency.Keywords: green growth, endogenous growth, directed technical change, induced innovation, environmental policy, adjustment costs.
    Date: 2021–06–17
  26. By: Horn, Henrik (Research Institute of Industrial Economics (IFN)); Tangerås, Thomas (Research Institute of Industrial Economics (IFN))
    Abstract: This paper develops a framework for analyzing the incentives of national transmission system operators (TSOs) to supply cross-border interconnection capacity in an international electricity market. Our results show that equilibrium transmission capacity is downward distorted, even in situations where full capacity utilization is inefficient. We derive a method for quantifying these distortions and propose a market design that uniquely implements efficient dispatch of electricity. In this design, the distribution of trade adjustment payments causes TSOs to internalize the full e¤ect of network congestion. The design would improve, for instance, on the current European market design.
    Keywords: International electricity market; Market design; Market power; Network congestion
    JEL: F12 F15 L43 L94 Q27 Q41
    Date: 2021–06–21
  27. By: James E. Archsmith; Erich Muehlegger; David S. Rapson
    Abstract: This paper identifies and quantifies major determinants of future electric vehicle (EV) demand in order to inform widely-held aspirations for market growth. Our model compares three channels that will affect EV market share in the United States from 2020-2035: intrinsic (no-subsidy) EV demand growth, net-of-subsidy EV cost declines (e.g. batteries), and government subsidies. Geographic variation in preferences for sedans and light trucks highlights the importance of viable EV alternatives to conventional light trucks; belief in climate change is highly correlated with EV adoption patterns; and the first $500 billion in cumulative nationwide EV subsidies is associated a 7-10 percent increase in EV market share in 2035, an effect that diminishes as subsidies increase. The rate of intrinsic demand growth dwarfs the impact of demand-side subsidies and battery cost declines, highlighting the importance of non-monetary factors (e.g. charging infrastructure, product quality and/or cultural acceptance) on EV demand.
    JEL: H23 Q47 Q48 Q5 R4
    Date: 2021–06
  28. By: Berardino Cesi (University of Rome Tor Vergata, Rome, Italy); Alessio D'Amato (University of Rome †Tor Vergata†, Italy)
    Abstract: Environmental regulation and pollution control may clash against the presence of unverifiable tasks, like source specific emissions. To tackle this issue we reshape a voluntary agreement instrument, already available in the received literature, in a dynamic perspective by means of a relational contracting approach. Setting up a Relational Voluntary Environmental Agreement (REA) helps the regulator to solve the unverifiability issue, and may provide polluting firms with the incentives to stick to environmental requirements. In an N firms symmetric context we show that even if emissions are not contractible across firms, so that enforcement cannot be delegated to a third party, if firms themselves are sufficiently patient, a self-enforcing equilibrium, under which the environmental objective is voluntarily met, exists. Finally, the policy analysis reveals that our REA may be welfare-improving with respect to a Voluntary Environmental Agreement on contractible emissions. This occurs when the enforcement cost savings under a relational agreement are larger than the additional social costs related to free riding.
    Keywords: Relational Contracts, Environmental Policy, UnveriÂ…ability, Voluntary Environmental Agreement
    JEL: D62 H23 Q58
    Date: 2021–06
  29. By: Çam , Eren (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)); Lencz, Dominic (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI))
    Abstract: In the European Union’s (EU) gas transmission system the relative prices of short-term transmission capacities are specified via factors called multipliers. Previous literature indicates that, depending on the region, there exist optimal multiplier levels that can allow transport tariffs to be reduced and consumer surplus to be maximised. However, since multiplier levels in a region can cause externalities in other regions, it is not clear if individually optimal multipliers in regions would also lead to a joint optimum. In order to provide insight into optimal multiplier levels in different regions in the EU we use a numerical optimisation model to simulate the European gas dispatch. We analyse the effects of multipliers in regional clusters; identify and differentiate between internal and external effects. We show that those effects and the individually optimal multiplier levels vary among regions depending on factors such as demand structure and storage availability. Our analysis confirms that individually adjusting multipliers in a region can cause external effects in other regions, depending largely on the location along the gas transport chain. With 92 million EUR per year, the potential EU consumer surplus gains with individually optimal multipliers is found to be 9% lower than the maximum achievable EU consumer surplus gains via multipliers. Hence, we show that because of the external effects of multipliers, individually optimal multipliers do not result in the EU optimum.
    Keywords: Gas transmission networks; entry-exit tariffs; multipliers; numerical optimisation model
    JEL: L51 L95 Q41
    Date: 2021–06–21
  30. By: F. Roussafi (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR1 - Université de Rennes 1 - UNIV-RENNES - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This article aims to study the regional development of renewable energies (RE) in France over the period 1990–2015. As a first step, Principal Component Analysis was used on the collected data, which led to a classification of RE's development into four sub-periods. The first two sub-periods (1990–1994) and (1995–2003) are characterized by a strong dependence on hydro, thermal, and fossil energies. The third sub-period (2004–2011) shows the development of new RE sources. In the last sub-period (2012–2015), RE's use in transport and heating sectors has grown significantly. In a second step, we carried out a Hierarchical Ascendant Classification (HAC) on each sub-period to highlight the similarities and differences between regions in terms of diversification of the energy mix. The results show that 16 regions followed a similar path over the 1990–2015 period because of an initial favorable condition for sharing RE consumptions. Other regions (Auvergne, Aquitaine, Burgundy, Franche-Comté, Poitou Charentes, and Lorraine) experienced more contrasting trajectories in their RE development. © 2021 The Author
    Keywords: Data analysis methods,Regional disparities,Renewable energy consumption
    Date: 2021
  31. By: Olatunji A. Shobande (Business School, University of Aberdeen, UK); Simplice A. Asongu (Yaoundé, Cameroon)
    Abstract: Africa is currently experiencing both financial and human development challenges. While several continents have advocated for financial development in order to acquire environmentally friendly machinery that produces less emissions and ensures long-term sustainability, Africa is still lagging behind the rest of the world. Similarly, Africa's human development has remained stagnant, posing a serious threat to climate change if not addressed. Building on the underpinnings of the Environmental Kuznets Curve (EKC) hypothesis on the nexus between economic growth and environmental pollution, this study contributes to empirical research seeking to promote environmental sustainability as follows. First, it investigates the link between financial development, human capital development and climate change in East and Southern Africa. Second, six advanced panel techniquesare used, and they include: (1) cross-sectional dependency (CD) tests; (2) combined panel unit root tests; (3) combined panel cointegration tests; (4) panel VAR/VEC Granger causality tests and (5) combined variance decomposition analysis based on Cholesky and Generalised weights. Our finding shows that financial and human capital developments are important in reducing CO2 emissions and promoting environmental sustainability in East and Southern Africa.
    Keywords: Financial Development; Human Capital; East and Southern Africa; Climate Change
    JEL: G21 I21 I25 O55 Q54
    Date: 2021–01
  32. By: Stephie Fried; Kevin Novan; William B. Peterman
    Abstract: This paper explores how to recycle carbon tax revenue back to households to maximize welfare. Using a general equilibrium lifecycle model calibrated to reflect the heterogeneity in the U.S. economy, we find the optimal policy uses two thirds of carbon-tax revenue to reduce the distortionary tax on capital income while the remaining one third is used to increase the progressivity of the labor-income tax. The optimal policy attains higher welfare and more equality than the lump-sum rebate approach preferred by policymakers as well as the approach originally prescribed by economists -- which called exclusively for reductions in distortionary taxes.
    Keywords: Carbon tax; Overlapping generations; Revenue recycling
    JEL: E62 H21 H23
    Date: 2021–04–02
  33. By: Felix Montag; Alina Sagimuldina; Monika Schnitzer
    Abstract: We investigate how the pass-through rate of commodity taxes depends on competition in a setting where consumers have imperfect information about prices. We use a theoretical search model that has two key predictions: First, the larger the number of price sensitive consumers, the higher the pass-through rate. Second, there is a hump-shaped relationship between the average pass-through experienced by consumers and the number of sellers. We test our theoretical predictions by studying pass-through in the context of a tax decrease and increase in the German retail fuel market. We estimate pass-through of these tax changes to diesel and gasoline prices using a unique dataset containing the universe of price changes at fuel stations in Germany and France and a synthetic difference-in-differences strategy. Our empirical results are in line with our theoretical predictions. Finally, we show that our theoretical framework can encompass and reconcile a large number of empirical observations in previous studies.
    Keywords: pass-through, carbon tax, VAT, consumer search, competition
    Date: 2021
  34. By: Arya Sasongko; Ali Sakti
    Abstract: Green Sukuk continues to grow, but it still has problems in pricing. It has an unexplainable pricing difference between Green and Non-Green financing instruments. The research selects to takea fundamental asset pricing methodology that analyzes environmental risk. Sukuk and other financings might finance environmentally-harmful projects which support waste generation and accumulation. We noticed that unique environmental risks impose Sukuk holders, i.e., systemic and reputation risks. Finally, the model confirmed that these risks cause the price difference.
    Keywords: Islamic finance, Climate risk, Climate finance, Environmental systemic risk premium, Environmental Reputation Risk Premium
    JEL: F64 G12 Q51 Q54 L14
    Date: 2020
  35. By: Kazuo Mino (Institute of Economic Research, Kyoto University); Hiroaki Sasaki (Graduate School of Economics, Kyoto University)
    Abstract: This study explores how population decline affects the long-run performance of an economy in which exhaustible natural resources are indispensable in the process production. Using a one-sector neoclassical growth model with external increasing returns, we inspect the conditions under which the per capita income and consumption persistently expand in the long-run equilibrium. We fi nd that it is population decline, rather than exhaustible resources, that might terminate persistent growth in per capita income and consumption.
    Keywords: exhaustible natural resources, population decline, long-run growth, external increasing returns
    JEL: O13 O44 Q32 Q43
    Date: 2021–06
  36. By: Jan Fagerberg (INTRANSIT, Centre for Technology, Innovation and Culture (TIK), University of Oslo); Erika Kraemer-Mbula (DST/NRF/Newton Fund Trilateral Chair in Transformative Innovation, the Fourth Industrial Revolution and Sustainable Development, College of Business and Economics, University of Johannesburg); Edward Lorenz (College of Business and Economics, University of Johannesburg and Aalborg University Business School, Aalborg University)
    Abstract: This paper draws on insights from evolutionary economics to enrich our understanding of the prospects for development in low-income countries. Drawing on analysis Freeman and Perez (1988) of the basis for changes in technological economic paradigms, the paper argues that the current process of digitalization in combination with developments in renewable energy are providing a ‘window of opportunity’ for accelerated economic growth and catch-up in low-income countries. The argument is illustrated with reference to the cases of Kenya and Rwanda both which stand out for their governments’ foresight in pursuing policies designed to promote a transformation based on the opportunities offered by the revolutionary changes in technology from the early to mid-2000s. Transformative change requires innovations in business models, in products and process and in modes of marketing and distribution. Drawing on innovation systems theory, the paper considers to what extent the problems firms face in Kenya and Rwanda in accessing resources in terms of needed knowledge, skills and finance have constrained the development of their innovation capabilities. The paper concludes by assessing the policies governments have enacted in attempting to respond to these constraints.
    Date: 2021–06
  37. By: Ahmad Naimzada; Marina Pireddu
    Abstract: We extend the dynamic Cournot duopoly framework with emission charges on outputs by Mamada and Perrings (2020), which encompassed homogeneous products in its original formulation, to the more general case of differentiated goods, in order to highlight the richness in its static and dynamic outcomes. In the model each firm is taxed proportionally to its own emission only and charge functions are quadratic. Moreover, due to an adjustment capacity constraint, firms partially modify their output level toward the best response. Like it happened in Mamada and Perrings (2020), the only model steady state coincides with the Nash equilibrium. We find that the full efficacy of the environmental policy, which applies to an equilibrium that is globally asymptotically stable anytime it is admissible, is achieved in the case of independent goods, as well as with a low interdependence degree between goods in absolute value, independently of being substitutes or complements. On the other hand, when goods are substitutes and their interdependence degree is high, the considered environmental policy is still able to reduce pollution at the equilibrium, but the latter is stable just when the policy intensity degree is high enough. When instead goods are complements and their interdependence degree is high in absolute value, the considered environmental policy produces detrimental effects on the pollution level and the unique equilibrium is always unstable, when admissible. This highlights that, from a static viewpoint, even in the absence of free riding possibilities, the choice of the mechanism to implement has to be carefully pondered, according to the features of the considered economy.
    Keywords: dynamic Cournot duopoly, differentiated products, emission charges, pollution control, comparative statics, stability analysis.
    JEL: C62 D43 Q51 Q58
    Date: 2021–06
  38. By: Yselle F. Malah Kuete (University of Yaoundé 2, SOA, P.O. Box 1365); Simplice A. Asongu (Yaoundé, Cameroon)
    Abstract: Structural change is seen by development economics theorists as a driver of sustained and sustainable economic growth. African countries that have understood this prioritize structural change policies in their national development programs in order to reduce poverty and promote employment through commodity-based industrialization. How does infrastructure development contribute to this process? The purpose of this paper is to answer this question by examining empirically whether the state of infrastructure development in Africa stimulates structural change, understood as the development of the manufacturing sector. After outlining the state of infrastructure quality in the region, and discussing some theoretical channels through which this relationship might pass, we estimate fixed effects models from 52 African countries over the period 2003-2018. Results which are robust to controlling for institutional dynamics and the natural resource curse hypothesis suggest that structural change in Africa is optimized with the development of infrastructure, particularly energy and information and communication technologies. Among other policy implications arising from these findings, the establishment of partnership projects with other developed countries in terms of superstructure for enhanced industrialization is recommended.
    Keywords: Infrastructure development, structural change, manufacturing sector, Africa
    JEL: N67 N77 C23
    Date: 2021–06
  39. By: Tii N. Nchofoung (University of Dschang , Cameroon); Simplice A. Asongu (Yaoundé, Cameroon); Arsène A. Njamen Kengdo (University of Dschang , Cameroon); Elvis D. Achuo (University of Dschang , Cameroon)
    Abstract: The objectives of this paper are to verify the linear and the non-linear effects of infrastructural development on inclusive human development in Africa. The results of the system GMM estimations show a positive effect of infrastructural development on inclusive development across all the infrastructural development indexes employed, except the ICT infrastructural composite index which presents an insignificant negative effect. Besides, a non-linear effect of infrastructures on inclusive development was established across all the infrastructure indicators except for the ICT indicator. Negative thresholds for complementary policies are established for the African Infrastructure Development Index (AIDI) and the transport index while positive thresholds are apparent for the electricity index and the water and sanitation infrastructure index (WSS). Accordingly, in order to sustain the positive incidence of the AIDI and transport index on human development, complementary policies should be engaged to avoid an overall negative effect on human development when the indexes are respectively, 31.12% and 25.56%. In the same vein, the electricity index and WSSI should exceed critical levels of respectively 49.79% and 41.92%, to engender an overall positive effect on inclusive human development.
    Keywords: Infrastructure; Inclusive development; Africa
    JEL: N67 N77 C23 I00 O55
    Date: 2021–06
  40. By: Baranzini, Andrea; Carattini, Stefano; Tesauro, Linda
    Abstract: While instruments to price congestion exist since the 1970s, less than a dozen cities around the world have a cordon or zone pricing scheme. Geneva, Switzerland, may be soon joining them. This paper builds on a detailed review of the existing schemes to identify a set of plausible design options for the Geneva congestion charge. In turn, it analyzes their acceptability, leveraging a large survey of residents of both Geneva and the surrounding areas of Switzerland and France. Our original approach combines a discrete choice experiment with randomized informational treatments. We consider an extensive set of attributes, such as perimeter, price and price modulation, use of revenues, and exemption levels and beneficiaries. The informational treatments address potential biased beliefs concerning the charge’s expected effects on congestion and pollution. We find that public support depends crucially on the policy design. We identify an important demand for exemptions, which, albeit frequently used in the design of environmental taxation, is underexplored in the analysis of public support. This demand for exemptions is not motivated by efficiency reasons. It comes mostly by local residents, for local residents. Further, people show a marked preference for constant prices, even if efficiency would point to dynamic pricing based on external costs. Hence, we highlight a clear trade-off between efficiency and acceptability. However, we also show, causally, that this gap can in part be closed, with information provision. Analyzing heterogeneity, we show that preferences vary substantially with where people live and how they commute. Even so, we identify several designs that reach majority support.
    Keywords: acceptability; congestion charge; poicy design; public support; road pricing; Centre for Climate Change Economics and Policy; PZ00P1_180006/1
    JEL: D72 H23 Q53 Q58 R41 R48
    Date: 2021–05–31
  41. By: Andri Brenner (University of Potsdam, MCC Berlin)
    Abstract: Economists are worried that the lack of property rights to natural capital goods jeopardizes the sustainability of the economic growth miracle that has existed since industrialization. This article questions their position. A vertical innovation model with a portfolio of technologies for abatement, adaptation, and general (Harrod-neutral) technology reveals that environmental damage spillovers have a comparable effect on research profits as technology spillovers so that the social costs of depleting public natural capital are internalized. As long as there is free access to information and technology, growth is sustainable and the allocation of research efforts among alternative technologies is socially optimal. While there still is a need to address externalities from monopolistic research markets, no environmental policy is necessary. These results suggest that environmental externalities may originate in restricted access to information and technology, demonstrating that (i) information has a similar effect as an environmental tax and (ii) knowledge and technology transfers have an impact comparable to that of subsidies for research in green technology.
    Keywords: endogenous growth, horizontal innovation, sustainability
    JEL: O30 O44 Q55 Q56
    Date: 2021–06
  42. By: Giovanni Di Bartolomeo; Behnaz Minooei Fard; Willi Semmler
    Abstract: Policies designed to limit greenhouse gases (GHGs) imply domestic tradeoffs and international externalities, which lead to both domestic and international conflicts, influencing their feasibility and implementation. Our paper aims at investigating two quantitative aspects within this debate. We intend to quantify the impact of (a) the internalization of international externalities and (b) the damage associated with a short-term view of climate policies. In this respect, we adopt the innovative (in this field) idea of model predictive control to formalize moving-horizon policy strategies and, thus, to build counterfactuals in which policymakers may have different horizons
    Keywords: Global warming, CO2 concentration, Climate policy, Short termism, Non-linear model predictive control
    JEL: C61 P28 Q54 Q58
    Date: 2021–06
  43. By: Ní Choisdealbha, Áine; Lunn, Pete
    Date: 2020
  44. By: Cartes Mena, Fernando
    Abstract: Para cumplir los objetivos del Acuerdo de París, hace falta una transformación a gran escala de la estructura de la actividad económica, y ello exige también un cuidadoso diseño de la política climática. Como señala la Comisión de Alto Nivel sobre los Precios del Carbono, el diseño adecuado del precio del carbono es una parte indispensable de la estrategia para reducir las emisiones de manera eficiente, que puede complementarse con la fijación de precios sombra en las actividades del sector público. En la mayor parte de los sistemas nacionales de inversión pública de América Latina y el Caribe, se hace referencia a este concepto con la denominación de “precio social”. En este estudio se presentan algunas metodologías para la estimación del precio social del carbono, se describe cómo este puede incluirse en los procesos de evaluación de los proyectos de inversión pública, tomando el caso de Chile como ejemplo, y se propone la aplicación de una de las metodologías analizadas en los proyectos de inversión pública de los países de la región, en el marco de los sistemas nacionales de inversión pública.
    Date: 2021–06–14
  45. By: Leila, Ouzeri
    Abstract: The aim of this work is to present two different approaches for modeling a photovoltaic panel (PV) fully illuminated. Generally, the physic’s model (White box) takes into account the physic, electronic and energetic behavior of different compound of the system’s model, as function of the solar irradiance and operating temperature. The statistician model (Black box) using the Design of Experiment method considers a physical system as a black box with various inputs (factors) and outputs (responses). Each approach has specific advantages, they are complementary.
    Date: 2021–06–18
  46. By: Daly, Michael; Obschonka, Martin; Stuetzer, Michael; Sutin, Angelina; Shaw-Taylor, Leigh; Satchell, Max; Robinson, Eric
    Abstract: Objective: The historical factors and contemporary mechanisms underlying geographical inequalities in obesity levels remain uncertain. In this study we examine whether modern regional variation in obesity is partly a result of the impact of large-scale industry on the personality traits of those living in regions once at the center of the Industrial Revolution. Method: Exposure to the effects of the Industrial Revolution was assessed using unique historical data from English/Welsh counties (N=111). Specifically, we examined the relationship between the regional employment share in large-scale coal-based industries in 1813-1820 and contemporary regional obesity levels (2013-2015). The Big Five personality traits and regional unemployment levels were examined as potential mediators of this association. Results: The historical regional employment share in large-scale industries positively predicted the modern-day regional prevalence of obesity. Mediation analysis showed that areas exposed to the decline of large-scale industries experienced elevated neuroticism and unemployment levels that explained almost half of the association between the historical dominance of large-scale industry and modern-day obesity levels. Conclusions: Our results provide initial evidence that raised regional neuroticism levels may play a key role in explaining why exposure to the rapid growth and subsequent decline of large-scale industries forecasts modern-day obesity levels.
    Keywords: Social deprivation; personality; obesity; industrialization
    JEL: I15 L16 N1 N9
    Date: 2019–10–19
  47. By: Joab D. Valdivia C.; Angélica C. Calle S.; Juan C. Carlo S.; Rolando E. Paz R. (Banco Central de Bolivia)
    Abstract: Bolivia siempre fue caracterizada como un país exportador de materias primas; esta particularidad se debe a la producción de gas natural y minerales. En la literatura, estos sectores se definen como extractivos no renovables. La presente investigación empleó un set de modelos para evidenciar la sostenibilidad de estos sectores en el crecimiento económico. En línea con Sachs y Warner (1995) y Ding y Field (2005), los resultados son laudables, es decir, existe un efecto negativo de las variables asociadas a recursos naturales extractivos. En la versión recursiva del modelo de Vectores Autorregresivos, se aprecia una mayor persistencia del efecto negativo de recursos naturales en el comportamiento del PIB desde 2012, año en el cual los términos de intercambio presentaron una desaceleración pronunciada. Finalmente, el sector industrial de Bolivia muestra efectos positivos en el comportamiento del crecimiento económico, siendo 0,10pp en 2010 como el máximo efecto y 0,04pp como el mínimo, a junio de 2019.
    Keywords: Renta minera, renta por gas natural, recursos naturales, control sintético, diferencias en diferencias, Vectores Autoregresivos (VAR) recursivos
    JEL: O13 P28
    Date: 2019–11
  48. By: Christopher Anderson
    Abstract: I analyze the implications of allowing consumers to make mistakes on the risk-return relationships predicted by consumption-based asset pricing models. I allow for consumption mistakes using a model in which a portfolio manager selects investments on a consumer's behalf. The consumer has an arbitrary consumption policy that could reflect a wide range of mistakes. For power utility, expected returns do not generally depend on exposure to single-period consumption shocks, but robustly depend on exposure to both long-run consumption and expected return shocks. I empirically show that separately accounting for both types of shocks helps explain the equity premium and cross section of stock returns.
    Keywords: Asset pricing; Consumer mistakes; Consumption-based asset pricing; Intertemporal CAPM; Long-run risks
    JEL: G50 G51 G23 G12 G40 G11
    Date: 2021–03–19
  49. By: Patrick Eparvier (Technopolis France S.A.R.L. - Technopolis France S.A.R.L); Aurélien Fichet de Clairfontaine; Alain N'Ghauran (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS - Centre National de la Recherche Scientifique - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UL2 - Université Lumière - Lyon 2 - ENS Lyon - École normale supérieure - Lyon); Aurélien Seawert; Corinne Autant-Bernard (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS - Centre National de la Recherche Scientifique - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UL2 - Université Lumière - Lyon 2 - ENS Lyon - École normale supérieure - Lyon); Ruben Fotso (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS - Centre National de la Recherche Scientifique - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UL2 - Université Lumière - Lyon 2 - ENS Lyon - École normale supérieure - Lyon); Antoine Schoen; Patricia Laurens
    Date: 2020
  50. By: Beatrice Bertelli; Gianna Boero; Costanza Torricelli
    Abstract: Fostered by an empirical literature providing disparate evidence on the green premium, we propose a two-factor model to explain returns on green bonds not only as a function of market risk but also of the bond greenness. The second factor can be interpreted as a greenness premium, which can be either positive or negative depending on the product of the price given by the market to greenness and the sensitivity of the specific green bond to the latter. Based on the model proposed and its Fama-Mac Beth estimation on a sample of Euro-denominated bonds over the period 08.10-2014-31.12.2019, we are able to conclude that the market does price greenness, but the price is very small: including Government green bonds is 0.7 bps, and focusing on corporate green bonds only is – 1.3 bps. In all cases the dynamics of the price for greenness has a positive drift as the market reaches a more mature phase, landing to a positive average value (2 bps), which implies greenness being viewed as a small penalty. However, differences emerge when we look at the issuer sector level and at single bonds, thus our model is able to explain the disparate empirical evidence provided by the literature on the greenium. On the whole, results hint to a market where the difference in pricing between conventional and green bonds is, ceteris paribus, shrinking, which is consistent with greenness becoming a new normal. These results are of interest for many economic agents, including market participants and financial intermediaries, whereby the latter are also called by the regulator to manage their portfolio in consideration of climate risk
    Keywords: green bonds, green premium, sustainable finance, factor models, asset pricing
    Date: 2021–06
  51. By: Yoo, Sunbin; Hong, Sungwan; Park, Yeongkyung; Okuyama, Akihiro; Zhang, Zhaozhe; Yoshida, Yoshikuni; Managi, Shunsuke
    Abstract: While various policy instruments have attempted to raise environmental concerns in the past decades, it is unclear if these concerns are revealed in the consumer choices of our daily life. In this study, we investigate whether environmental concerns drive the choices of modes of transport through the bike-sharing example in Tokyo and Shanghai. We conducted a survey questionnaire to define three types of environmental concerns and quantitatively estimated their effects on bike-sharing choices using the latent class model, considering individual heterogeneity. The results show that environmental concerns affect bike-sharing choices differently for different people. While the fear of natural disasters and/or an indifference towards the environment would be dominant factors in commuting, the willingness to preserve a natural environment shows substantial correlations to bike-sharing when respondents return from weekend shopping. These differences indicate that relevant policies should be effectively implemented to interact with such environmental concerns.
    Keywords: Bike-sharing; shared transportation; demand estimation; latent choice model; latent class; environmental concern
    JEL: L62 Q5 Q55 R4
    Date: 2021–06–16
  52. By: Mary C. Daly
    Date: 2021–06–21

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