nep-ene New Economics Papers
on Energy Economics
Issue of 2021‒07‒12
forty-five papers chosen by
Roger Fouquet
London School of Economics

  1. The Impact of Distributed Solar Power Generation on the Demand and the Use of Electricity in Households By Amelung, Torsten
  2. The Circular Carbon Economy Index – Methodological Approach and Conceptual Frameworks By Mari Luomi; Fatih Yilmaz; Thamir Al Shehri; Nicholas Howarth
  3. The impact of carbon prices on renewable energy support By Abrell, Jan; Kosch, Mirjam
  4. Energy conversion and storage: The value of reversible power-to-gas systems By Glenk, Gunther; Reichelstein, Stefan
  5. The Rebound Effect in Air Conditioner Usage: An Empirical Analysis of Japanese Individuals’ Behaviors By Minoru Morita; Kazuyuki Iwata; Toshi H. Arimura
  6. Impacts of the Clean Air Act on the Power Sector from 1938-1994: Anticipation and Adaptation By Clay, Karen; Jha, Akshaya; Lewis, Joshua; Severnini, Edson R.
  7. NGH exploitation with sequestration of carbon dioxide: economic rationale for a sustainable perspective By Roberto Fazioli
  8. Commercialisation contracts- European support for low-carbon technology deployment By Ben McWilliams; Georg Zachmann
  9. Success and Failure of the Voluntary Action Plan: Disaggregated Sector Decomposition Analysis of Energy-related CO2 Emissions in Japan By Guanyu Lu; Makoto Sugino; Toshi H. Arimura; Tetsuya Horie
  10. Emissions Impact of Connected and Automated Vehicle Deployment in California By Circella, Giovanni; Jaller, Miguel; Sun, Ran; Qian, Xiaodong; Alemi, Farzad
  11. Estadísticas del subsector eléctrico de los países del Sistema de la Integración Centroamericana (SICA), 2019 y avances a 2020 By -
  12. Crude Oil Price Changes and Inflation: Evidence for Asia and the Pacific Economies By Jiranyakul, Komain
  13. Technological Progress and Carbon Price Formation: an Analysis of EU-ETS Plants By Marc Baudry; Anouk Faure
  14. Co2 emissions and economic growth: Assessing the heterogeneous effects across climate regimes in Africa By Espoir, Delphin Kamanda; Mudiangombe, Benjamin; Bannor, Frank; Sunge, Regret; Mubenga Tshitaka, Jean-Luc
  15. Governance and renewable energy consumption in sub-Saharan Africa By Asongu, Simplice A; Odhiambo, Nicholas M
  16. Oil prices and agricultural growth in South Africa: A threshold analysis By Aye, Goodness C; Odhiambo, Nicholas M
  17. Technological Progress and Carbon Price Formation: an Analysis of EU-ETS Plants By Anouk Faure; Marc Baudry
  18. Assessment of the exposure of the Portuguese banking system to non-financial corporations sensitive to climate transition risks By Ricardo Marques; Ana Margarida Carvalho
  19. Oil Tail Risks and the Forecastability of the Realized Variance of Oil-Price: Evidence from Over 150 Years of Data By Afees A. Salisu; Christian Pierdzioch; Rangan Gupta
  20. Corporate carbon reduction pledges: An effective tool to mitigate climate change? By Comello, Stephen; Reichelstein, Julia; Reichelstein, Stefan
  21. Subjective satisfaction and objective electricity poverty reduction in Vietnam, 2008-2018. By Minh Ha-Duong; Nguyen Son
  22. Tax versus Regulations: Robustness to Polluter Lobbying Against Near-Zero Emission Targets By Hirose, Kosuke; Ishihara, Akifumi; Matsumura, Toshihiro
  23. Time-Varying Impact of Financial Development on Carbon Emissions in G-7 Countries: Evidence from the Long History By Shahbaz, Muhammad; Destek, Mehmet Akif; Dong, Kangyin; Jiao, Zhilun
  24. Connectedness between energy and nonenergy commodity markets: Evidence from quantile coherency networks By Khalfaoui, Rabeh; Baumöhl, Eduard; Sarwar, Suleman; Výrost, Tomáš
  25. Integration and Risk Transmission in the Market for Crude Oil: A Time-Varying Parameter Frequency Connectedness Approach By Ioannis Chatziantoniou; David Gabauer; Rangan Gupta
  26. The Climate PoLicy ANalysis (C-PLAN) Model, Version 1.0 By Niven Winchester; Dominic White
  27. Beyond RCP8.5: Marginal Mitigation Using Quasi-Representative Concentration Pathways By J. Isaac Miller; William A. Brock
  28. Beyond standard economic approaches: complex networks in climate finance By Francesca Larosa; Nadia Ameli; Jamie Rickman; Sumit Kothari
  29. Distributional Effects of Emission Pricing in a Carbon-Intensive Economy: The Case of Poland By Marek Antosiewicz; J. Rodrigo Fuentes; Piotr Lewandowski; Jan Witajewski-Baltvilks
  30. Hayek and the Texas blackout By Littlechild, S.; Kiesling, L.
  31. tBeam—A Fast Model to Estimate Energy Consumption Due to Pavement Structural Response User Manual By Weissman, Shmuel L.
  32. Green Technology Transitions with an Endogenous Market Structure By Bondarev, Anton; Dato, Prudence; Krysiak, Frank C.
  33. Financial Development, Human Capital Development and Climate Change in East and Southern Africa By Olatunji A. Shobande; Simplice A. Asongu
  34. Unraveling the Black Box of Power Market Models By Valeriya Azarova; Mathias Mier
  35. La RIOCC y la transición hacia una economía baja en emisiones y resiliente al cambio climático en América Latina y el Caribe By Tudela, Fernando
  36. Institutional Investors, Climate Policy Risk, and Directed Innovation By Marie-Theres Schickfus von; Marie-Theres von Schickfus
  37. Quantifying time-varying forecast uncertainty and risk for the real price of oil By Knut Are Aastveit; Jamie Cross; Herman K. Djik
  38. Why sustainable, inclusive, and resilient investment makes for efficacious post-COVID medicine By Zenghelis, Dimitri
  39. Classification of heritage residential building stock and defining sustainable retrofitting scenarios in Khedivial Cairo By Hanan Ibrahim; Ahmed Z. Khan; Shady Attia; Yehya Serag
  40. Dissecting Green Returns By Lubos Pastor; Robert F. Stambaugh; Lucian A. Taylor
  41. The Role of Information in the Rosen-Roback Framework By Xuwen Gao; Ran Song; Christopher Timmins
  42. Energy Poverty and Subjective Well-Being in China: New Evidence from the China Family Panel Studies By Nie, Peng; Li, Qiaoge; Sousa-Poza, Alfonso
  43. The evolving role of networking organizations in advanced sustainability transitions By Sebastian Rohe; Camilla Chlebna
  44. Congestion Reduction via Personalized Incentives By Ghafelebashi, Ali; Razaviyayn, Meisam; Dessouky, Maged
  45. Whose streets? Justice in transport decarbonization and gender By Huwe, Vera

  1. By: Amelung, Torsten
    Abstract: Solar modules are increasingly deployed at the electricity customers’ premises. Once these customers become power generators (“prosumers”), there is a change in the customers’ behavior regarding the consumption of electricity. This paper analyses the behavioral patterns of these prosumers based on field studies that have been undertaken in different countries. As prosumers obtain a higher transparency than consumers, they try to shift their consumption into those hours, when there is higher solar irradiation. Taxation, grid fee structures and affiliate marketing impact on the behavioral patterns as well. This might lead to an increase of electricity consumption and thus reducing the electricity that can be fed in into the grid. Understanding this behavior is crucial for designing policies to increase the solar generation, as decentralized solar generation could play an important role in the future energy mix.
    Keywords: Prosumers,Distributed Energy,Behavior of Housholds
    JEL: D91 M21 O33
    Date: 2021
  2. By: Mari Luomi; Fatih Yilmaz; Thamir Al Shehri; Nicholas Howarth (King Abdullah Petroleum Studies and Research Center)
    Abstract: The circular carbon economy (CCE) approach, developed during Saudi Arabia’s G20 Presidency and endorsed by G20 leaders and energy ministers, can be used as a framework for holistic assessments of all available energy and emission management technologies within the confines of a global carbon budget. KAPSARC’s Circular Carbon Economy Index project, launched in 2021, will develop a composite indicator (index) that measures and tracks country performance and potential on various dimensions of the CCE to support related policy discussions and planning.
    Keywords: Energy Efficiency, Capital Expenditure, CO2 emissions, Econometrics
    Date: 2021–06–28
  3. By: Abrell, Jan; Kosch, Mirjam
    Abstract: This paper examines how optimal renewable energy (RE) support (RES) policies need to be adjusted to account for carbon prices. We show theoretically and empirically that changing carbon prices requires adjusting RE production subsidies due to two different motives: First, RE premiums need to be reduced to reflect the carbon value embedded in the market price. Second, RE premiums and feed-in tariffs need to be adjusted once a fuel switch away from coal towards gas power occurs. This adjustment is necessary to account for changes in the marginal external benefit of RE. For the case of the UK, we estimate the optimal RE subsidies and their adjustments due to a fuel switch. Furthermore, we use numerical simulations to analyze the impact of varying carbon prices on optimal RES. We show that the necessary adjustment due to a fuel switch is empirically rather small, whereas RE premiums must be phased out with increasing carbon prices due to the increasing reflection of the carbon cost in the electricity market price. Finally, a fuel switch increases solar-induced abatement, whereas it wind-induced abatement is rather invariant to a fuel switch. Yet, the differentiation of RE subsidies between wind and solar power is modest.
    Keywords: Renewable promotion,Carbon pricing,Electricity generation
    JEL: Q41 Q42 Q58
    Date: 2021
  4. By: Glenk, Gunther; Reichelstein, Stefan
    Abstract: In the transition to decarbonized energy systems, Power-to-Gas (PtG) processes have the potential to connect the existing markets for electricity and hydrogen. Specifically, reversible PtG systems can convert electricity to hydrogen at times of ample power supply, yet they can also operate in the reverse direction to deliver electricity during times when power is relatively scarce. Here we develop a model for determining when reversible PtG systems are economically viable. We apply the model to the current market environment in both Germany and Texas and find that the reversibility feature of unitized regenerative fuel cells (solid oxide) makes them already cost-competitive at current hydrogen prices, provided the fluctuations in electricity prices are as pronounced as currently observed in Texas. We further project that, due to their inherent flexibility, reversible PtG systems would remain economically viable at substantially lower hydrogen prices in the future, provided recent technological trends continue over the coming decade.
    Keywords: Renewable Energy,Power Markets,Hydrogen,Power-to-Gas,Energy Storage
    JEL: M2 O3 Q4 Q5
    Date: 2021
  5. By: Minoru Morita (Faculty of Regional Policy, Takasaki City University of Economics, 1300 Kaminamie-machi Takasaki-city, Gunnma 3700801, Japan); Kazuyuki Iwata (Faculty of Economics, Matsuyama University, Matsuyama, Ehime, Japan.); Toshi H. Arimura (Faculty of Political Science and Economics & Research Institute for Environmental Economics and Management (RIEEM), Waseda University, 1-6-1 Nishiwaseda, Shinjuku-ku, Tokyo, 169-8050, Japan.)
    Abstract: Many studies have empirically examined to what extent energy efficiency improvement causes rebound effects for various products. Energy efficiency improvement potentially induces behavioral changes resulting in a rebound effect. However, a limited number of studies have addressed what kind of behavioral changes the energy efficiency improvement of appliances can cause. For example, the energy efficiency improvement of air conditioners can induce a change in the room temperature setting. This paper examines whether the energy efficiency improvement of air conditioners impedes energy-saving behaviors. Specifically, using a Japanese household survey, we examined the energy-saving behaviors related to air conditioner usage: 1) setting the room temperature at 28℃ or higher in summer, 2) reducing unnecessary power consumption and 3) cleaning the filters. We found that energy efficiency improvements reduce the probability of the behavior of setting air conditioner temperatures at 28℃ or more by approximately 25–45% during summer, while they have no impacts on the reduction of unnecessary air conditioner usage or filter cleaning. This finding implies that energy efficiency improvements may counteract the energy-saving behaviors of the temperature setting, resulting in a rebound effect. Thus, we clarified a mechanism of the rebound effect in the case of air conditioners.
    Keywords: Energy Saving Behavior, Rebound Effects, Energy Air Conditioner
    JEL: Q41 Q48 Q55
    Date: 2021–06
  6. By: Clay, Karen (Carnegie Mellon University); Jha, Akshaya (Carnegie Mellon University); Lewis, Joshua (University of Montreal); Severnini, Edson R. (Carnegie Mellon University)
    Abstract: The passage of landmark government regulation is often the culmination of evolving social pressure and incremental policy change. During this process, firms may preemptively adjust behavior in anticipation of impending regulation, making it difficult to quantify the overall economic impact of the legislation. This study leverages newly digitized data on the operation of virtually every fossil-fuel power plant in the United States from 1938-1994 to examine the economic impacts of the 1970 Clean Air Act (CAA) on the power sector. This unique long panel provides us an extended pre-regulation benchmark, allowing us to account for both anticipatory behavior by electric utilities in the years leading up to the Act's passage and reallocative effects of the CAA across plant vintages. We find that the CAA led to large and persistent decreases in output and productivity, but only for plants that opened before 1963. The timing aligns with the passage of the original 1963 CAA, which provided the federal government with the authority to "control" air pollution, sending a strong signal to firms of impending federal regulation. We provide historical evidence of anticipatory responses by utilities in the design and siting of plants that opened after 1963. We also find that the aggregate productivity losses of the CAA borne by the power sector were substantially mitigated by the reallocation of output from older less efficient power plants to newer plants.
    Keywords: power plants, electricity generation, total factor productivity, clean air act, air quality regulations, NAAQS
    JEL: K32 N52 Q52
    Date: 2021–06
  7. By: Roberto Fazioli
    Abstract: Policy Makers and Financial Institutions are searching for pragmatic solutions to achieve the objectives that have been set as priorities in the so-called New Green deal. In the face of the great potential deriving from scientific innovation, the issue of the ability to attract investments in an appropriate manner for times, quantities and, also, costs arises. The attraction of investments is crucial. In the case of the NGH expoitation strategy examined here, it is possible to promote this attractiveness if: (1) the prospect of the use of Natural Gas in place of the other fossil sources is widely understood as a coherent solution to the Paris Agreements, i.e. part of the New Green Deal and (2) if it is clarified, in the audience of policy makers, how much solution of the NGH exploitation and the simultaneous sequestration of carbon dioxide in a single process is actually attributable to a primary Sustainable Energy Source. So, the new perspectives for extraction of methane from marine NGH and the simultaneous sequestration of carbon dioxide in a single process could be a very good deal for Private Finance, but policy makers have to consider it as an environmental neutral solution, as a new alternative renewable energy source. NGH exploitation could became part of the New Green Deal, part of financial actrattive strategy stemming from well pragmatically based environmental policies.
    Keywords: environmental policy; NGH exploitation; sequestration of carbon dioxide; environmental neutrality; sustainability; New Green Deal; financial attractiveness; Green Finance; Carbon Pricing; Public and Private Investments; Natural Gas
    Date: 2021–06–29
  8. By: Ben McWilliams; Georg Zachmann
    Abstract: The authors wish to thank Natalia Fabra, Pedro Linares, Jörn Richstein and Oliver Sartor for helpful comments. Many of the technologies that can help the European Union become a net-zero emissions economy by 2050 have been shown to work but are not yet commercially competitive with incumbent fossil-fuel technologies. There is not enough private investment to drive the deployment of new low-carbon alternatives. This is primarily because carbon prices are...
    Date: 2021–07
  9. By: Guanyu Lu (Graduate School of Economics, Waseda University, 1-6-1 Nishiwaseda Shinjuku-ku, Tokyo, 169-8050, Japan.); Makoto Sugino (Faculty of Literature and Social Sciences, Yamagata University, 1-4-12 Kojirakawa-machi Yamagata-shi, Yamagata, 990-8560, Japan); Toshi H. Arimura (Faculty of Political Science and Economics & Research Institute for Environmental Economics and Management (RIEEM), Waseda University, 1-6-1 Nishiwaseda, Shinjuku-ku, Tokyo, 169-8050, Japan.); Tetsuya Horie (Faculty of Political Science and Economics, Waseda University, 1-6-1 Nishiwaseda Shinjuku-ku, Tokyo 169-8050, Japan)
    Abstract: To accomplish the goal of greenhouse gas (GHG) emissions reduction, the Japanese Business Federation (JBF) has implemented the voluntary action plan (VAP), a unique feature of which does not penalize industrial firms or organizations, even if they fail to meet the CO2 emissions or energy consumption reduction goals. This study evaluates the role of VAP in emission reduction by analyzing highly disaggregated data from 1980 to 2015 of approximately 400 sectors using the logarithmic mean Divisia index (LMDI) method. The results indicate that the increase in CO2 emissions among Japanese industries is mainly caused by the increase in indirect CO2 emissions. Moreover, the energy consumption structure has progressively shifted from fossil fuels to electricity. The decomposition analysis highlights two key points. (1) The VAP is ineffective in reducing emissions in sectors with low market concentration. (2) The energy intensity target of the VAP does not lead to a significant reduction in CO2 emissions. Thus, this study concludes that the contribution of the VAP in reducing CO2 emissions is limited. Evidence from our research suggests three directions for future policy design and implications.
    Keywords: Voluntary action plan, Decomposition analysis, Japan
    JEL: Q53 Q40 L16
    Date: 2021–06
  10. By: Circella, Giovanni; Jaller, Miguel; Sun, Ran; Qian, Xiaodong; Alemi, Farzad
    Abstract: This study helps understand how the anticipated emergence of autonomous vehicles will affect various aspects of society and transportation, including travel demand, vehicle miles traveled, energy consumption, and emissions of greenhouse gases and other pollutants. The study begins with a literature review on connected and automated vehicle (CAV) technology for light-duty vehicles, the factors likely to affect CAV adoption, expected impacts of CAVs, and approaches to modeling these impacts. The study then uses a set of modifications in the California Statewide Travel Demand Model (CSTDM) to simulate the following scenarios for the deployment of passenger light-duty CAVs in California by 2050: (0) Baseline (no automation); (1) Private CAV; (2) Private CAV + Pricing; (3) Private CAV + Zero emission vehicles (ZEV); (4) Shared CAV; (5) Shared CAV + Pricing; (6) Shared CAV + ZEV. The modified CSTDM is used to forecast travel demand and mode share for each scenario, and this output is used in combination with the emission factors from the EMission FACtor model (EMFAC) and Vision model to calculate energy consumption and criteria pollutant emissions. The modeling results indicate that the mode shares of public transit and in-state air travel will likely sharply decrease, while total vehicle miles traveled and emissions will likely increase, due to the relative convenience of CAVs. The study also reveals limitations in models like the CSTDM that primarily use sociodemographic factors and job/residence location as inputs for the simulation of activity participation and tour patterns, without accounting for some of the disruptive effects of CAVs. The study results also show that total vehicle miles traveled and vehicle hours traveled could be substantially impacted by a modification in future auto travel costs. This means that the eventual implementation of pricing strategies and congestion pricing policies, together with policies that support the deployment of shared and electric CAVs, could help curb tailpipe pollutant emissions in future scenarios, though they may not be able to completely offset the increases in travel demand and road congestion that might result from CAV deployment. Such policies should be considered to counteract and mitigate some of the undesirable impacts of CAVs on society and on the environment.
    Keywords: Engineering, Social and Behavioral Sciences, Connected and Automated Vehicles, Travel Demand, Vehicle Miles Traveled, Emission Impacts, Mode Share, Future Scenarios, CSTDM
    Date: 2021–06–01
  11. By: -
    Abstract: En este documento se presenta información relevante de la industria eléctrica de los ocho países que conforman el Sistema de la Integración Centroamericana (SICA). Se consideran dos grupos de países: i) los seis que integran el Mercado Eléctrico Regional de América Central se incluyen en la sigla SIEPAC (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua y Panamá), y ii) en la sigla SICA se incluyen los ocho países que conforman el organismo de integración referido (los seis ya mencionados, SIEPAC, más Belice y la República Dominicana). Se presentan cuadros regionales y nacionales con datos estadísticos de la industria eléctrica, la mayor parte actualizados a 2020, los cuales muestran los resultados de los segmentos de producción y distribución de electricidad, en los dos mercados relevantes (mercados mayoristas y mercados regulados) y de las transacciones regionales (para los países del SIEPAC) y binacionales (para las transacciones de electricidad entre México y Belice y Guatemala).
    Date: 2021–07–05
  12. By: Jiranyakul, Komain
    Abstract: This paper examines the influence of crude oil price on inflation in seven Asian and two of the pacific economies. The period of investigation is from 1987M5 to 2019M12. The results of cointegration tests reveal that there is stable positive long-run relationship between consumer price index and crude oil price in these countries. In the short run, there is unidirectional causality running from crude oil price change to inflation in most cases. The findings suggest accommodative monetary policy measures to combat high inflation rate.
    Keywords: Crude oil price, inflation rate, Asia and the Pacific countries
    JEL: Q43
    Date: 2021–06
  13. By: Marc Baudry (EconomiX (Université Paris Nanterre)); Anouk Faure (EconomiX (Université Paris Nanterre) & Chaire Economie du Climat (PSL))
    Abstract: This study investigates the nature of technological progress in six manufacturing industries covered under the EU-ETS, plus the power sector, and its effect on carbon price formation using marginal abatement cost curves. We adopt a technological frontier framework that we calibrate to input and output data at the plant level from 2013 to 2017, with a directional distance function approach. Our results reveal that most of the time, technological progress resulted in inflating baseline emissions, despite decreasing the carbon intensity of production. In our sample industries, technological progress therefore leads to increase abatement efforts, raising the equilibrium price of carbon.
    Keywords: SEQE, Changement Technologique, Production, Analyse Empirique,
    JEL: D24 L6 O33 Q58 Q54
    Date: 2021–06
  14. By: Espoir, Delphin Kamanda; Mudiangombe, Benjamin; Bannor, Frank; Sunge, Regret; Mubenga Tshitaka, Jean-Luc
    Abstract: Climate change has occasioned several Earth long-term events, including extreme temperatures. In recent years, Africa was reported as part of the world's regions that experienced extreme temperatures above pre-industrial levels. Despite lower contribution to Green House Gas (GHG) emissions and global warming, Africa remains among the world regions that suffer the most from climate change. However, the impact of climatic factors of temperature and emissions on economic production in Africa has not been broadly investigated, specifically among climate regimes. In this study, we attempt for the first time to understand the heterogeneous impacts of emissions and temperature on income in Africa using panel and time-series techniques on datasets spanning the years 1995-2016. At the global level in Africa, our empirical results reveal that a 1% increase in average temperature reduces income by 1.08%, whereas a 1% rise in Co2 emissions spurs income by 0.23%. The emissions effect result implies that environmental policies specifically designed to reduce Co2 emissions in Africa as a whole may significantly impact production in the long run. Also, the result suggests that a shift from optimal temperature levels to extreme patterns deter economic growth. Despite these revelations, our extended analysis based on climate regimes indicates heterogeneous effects across countries. Considering the Paris agreement on climate, this study suggests that policymakers should emphasise country-specific policies than global climatic policies for sustained Co2 emissions reduction in Africa.
    Keywords: Heterogeneous effects,Temperature,Climate change,Environmental sustainability,Panel data,time-series data
    JEL: C32 C33 Q54
    Date: 2021
  15. By: Asongu, Simplice A; Odhiambo, Nicholas M
    Abstract: The purpose of this study is to assess the nexus between governance and renewable energy consumption in sub-Saharan Africa. The focus is on 44 countries in Sub-Saharan Africa with data from 1996 to 2016. The empirical evidence is based on Tobit regressions. It is apparent from the findings that political and institutional governance are negatively related to the consumption of renewable energy in the sampled countries. The unexpected findings are clarified and policy implications are discussed in the light of sustainable development goals. This study extends the extant literature by assessing how political governance (consisting of political stability and ?voice & accountability?) and institutional governance (entailing the rule of law and corruption-control) affect the consumption of renewable energy in sub Saharan Africa.
    Keywords: Renewable energy; Governance; Sub-Saharan Africa; Sustainable development
    Date: 2021–05
  16. By: Aye, Goodness C; Odhiambo, Nicholas M
    Abstract: Oil plays a pivotal role in the growth of agriculture as a combustion lubricant for machineries and equipment used in the farming enterprise. Several studies have shown that a relationship exists between oil prices and agricultural growth without clear boundaries beyond which these prices are detrimental to the growth. Therefore, this study is conducted to identify the threshold above which oil prices will adversely affect agricultural growth in South Africa. Real West Texas Intermediate (WTI) and Real Brent crude oil prices in both Dollars and Rands were used as threshold variables in the threshold regression model of agricultural growth. The findings showed that beyond the threshold values of 12.99%, 15.68%, 15.69% and 15.70%, the prices of Real WTI crude oil in Dollars, Real Brent crude oil in Dollars, Real WTI crude oil in Rands and Real Brent crude oil in Rands respectively will have significant negative effects on agricultural growth in South Africa.
    Keywords: Oil prices; agricultural growth; threshold effect
    Date: 2021–06
  17. By: Anouk Faure; Marc Baudry
    Abstract: This study investigates the nature of technological progress in six manufacturing industries covered under the EU-ETS, plus the power sector, and its effect on carbon price formation using marginal abatement cost curves. We adopt a technological frontier framework, which we calibrate to input and output data at the plant level from 2013 to 2017, with a directional distance function approach. Our results reveal that most of the time, technological progress resulted in inflating baseline emissions, despite decreasing the carbon intensity of production. In our sample industries, technological progress therefore leads to increase abatement efforts, raising the equilibrium price of carbon.
    Keywords: Directed technological change, frontier analysis, EU-ETS
    JEL: Q55 O33 D24 L6
    Date: 2021
  18. By: Ricardo Marques; Ana Margarida Carvalho
    Abstract: Climate change is a source of risk to financial stability. This article presents a quantification of the exposure of the Portuguese banking system to non-financial corporations (NFCs) sensitive to the risks arising from the transition to a low-carbon economy. The results suggest that about 60% of banks’ exposures to NFCs are in climate-policy-relevant sectors (CPRS), chiefly in the sectors dedicated to construction, transaction and use of buildings and, to a lesser extent, in sectors associated with the production and use of means of transportation and in energy-intensive industries. This article also presents a methodology for estimating direct greenhouse gas (GHG) emissions, by sector of activity, from resident NFCs with bank financing. The calculation of carbon intensity on the basis of these estimates shows that around 60% of banks’ exposures to NFCs is below the median of this indicator. This result is consistent with the higher concentration of exposures in climate-policy-relevant sectors with lower direct GHG emissions.
    JEL: G21 Q54
    Date: 2021
  19. By: Afees A. Salisu (Centre for Econometric and Allied Research, University of Ibadan, Ibadan, Nigeria); Christian Pierdzioch (Department of Economics, Helmut Schmidt University, Holstenhofweg 85, P.O.B. 700822, 22008 Hamburg, Germany); Rangan Gupta (Department of Economics, University of Pretoria, Private Bag X20, Hatfield, 0028, South Africa)
    Abstract: We examine the predictive value of tail risks of oil returns for the realized variance of oil returns using monthly data for the modern oil industry (1859:10-2020:10). The Conditional Autoregressive Value at Risk (CAViaR) framework is employed to generate the tail risks for both 1% and 5% VaRs across four variants of the CAViaR framework. We find evidence of both in-sample and out-of-sample predictability emanating from both 1% and 5% tail risks. Given the importance of real-time oil-price volatility forecasts, our results have important implications for investors and policymakers.
    Keywords: Oil Tail Risks, Realized Variance of Oil-Price, Forecasting
    JEL: C22 C53 Q02
    Date: 2021–06
  20. By: Comello, Stephen; Reichelstein, Julia; Reichelstein, Stefan
    Abstract: In the intensifying public debate about limiting the harmful effects of climate change, many global corporations have recently articulated so-called 'net-zero' goals for reducing and ultimately eliminating their own greenhouse gas emissions. We first examine the details ofthe carbon reduction goals articulated by seven large firms in different industries. The individual reduction goals are shown to vary substantially in terms of specificity and scope, largely due to variations in the measurement of carbon footprints. Particular sources of variation arise from how 'gross emissions' are determined and from firms' willingness to recognize carbon credits that offset their own emissions.
    Keywords: Carbon Emissions,corporate reporting,net-zero goals,carbon offsets
    JEL: Q28 Q40 M41 M48
    Date: 2021
  21. 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); Nguyen Son (NEU - National Economics University (Ha Noi, Vietnam), ABIES Doctoral School - ABIES Doctoral School)
    Abstract: We estimate the reduction of electricity poverty in Vietnam. The essential argument is that human development is about subjective feeling as much as technology and income. We use a self-reported satisfaction indicator as complementary to objective indicators based on national household surveys from 2008 to 2018. We found that in 2010, the fraction of households with access to electricity was over 96%. However, over 24% declared their electricity use did not meet their needs. Since 2014 the satisfaction rate is around 97%, even if 25% of the households used less than 50 kWh/month. Today there is electricity for all in Vietnam, but electricity bills weigh more and more in the budget of households. Inequalities in electricity use among Vietnamese households decreased during the 2008-2018 period, but are not greater than inequalities in income, contrary to the findings of Son and Yoon (2020). The subjective energy poverty measure allows better international statistics: unlike poverty or needs-based criteria, self-assessed satisfaction of needs compares across income levels and climates. Engineering and econometric objectivist approaches dominate the literature on sustainability monitoring. Out of 232 Sustainable Development Goal Indicators, only two are subjective. Yet our findings show that subjective indicators tell a different part of the story. Grid building is only a mean, the end is a meaningfull provision of power to satisfy the needs.
    Keywords: Electricity poverty,Vietnam,Sustainable Development Goals,Indicators Q41,Q48,Q56
    Date: 2021
  22. By: Hirose, Kosuke; Ishihara, Akifumi; Matsumura, Toshihiro
    Abstract: We investigate polluter lobbying against near-zero emission targets in a monopoly market. To this end, we compare three typical environmental policies---an emission cap regulation that restricts total emissions, an emission intensity regulation that restricts emissions per output unit, and an emission tax. We presume a policy to be most robust to lobbying when a lesser strict emission target (i.e., an increase in the targeted emission level) imposed by the government to the industry increases the firms' profit least significantly among the three policies. We find that the emission tax is the most robust in the presence of lobbying if the government aims for a net-zero emission society. However, the emission tax is the least robust if the emission target is loose or the government is weak against lobbying.
    Keywords: net-zero emission industry, emission cap, emission intensity, emission tax, emission equivalence, profit ranking
    JEL: L13 L51 Q52
    Date: 2021–06–20
  23. By: Shahbaz, Muhammad; Destek, Mehmet Akif; Dong, Kangyin; Jiao, Zhilun
    Abstract: Financial development has been widely proved to be a key driver of economic growth; however, its environmental impact is still inconclusive, especially for G-7 countries (i.e. Canada, France, Germany, Italy, Japan, the United Kingdom (UK), and the United State (US)). This paper, therefore, investigates the time-varying impact of financial development on carbon dioxide (CO2) emissions for G-7 countries over a long historical period. The study analyzes historical data from 1870 to 2014 for each country using bootstrap time-varying co-integration (TVC) and bootstrap rolling window estimation approaches. In addition, the polynomial trends of the estimated parameters are obtained to observe the relationship between financial development and carbon emissions. The empirical findings reveal that the impact of financial development on CO2 emissions over a long history is M-shaped in Canada, Japan, and the US; inverted N-shaped in France, Italy, and the UK; and inverted M-shaped (W-shaped) in Germany. This empirical evidence opens new directions for policy makers to design comprehensive economic policy for using the financial sector as an economic tool to keep environmental quality at sustainable levels.
    Keywords: Financial Development; CO2 Emissions; Non-linear Analysis; Time-varying Co-integration (TVC); G-7
    JEL: Q5
    Date: 2021–06–04
  24. By: Khalfaoui, Rabeh; Baumöhl, Eduard; Sarwar, Suleman; Výrost, Tomáš
    Abstract: The worldwide economy has experienced several changes in energy and nonenergy prices. This has motivated academics, investors, and policymakers to analyze the relationships between energy and nonenergy commodity markets. In this study, a novel approach of quantile coherency is used to examine the dependence structure between energy and nonenergy commodity pairs at different frequencies and quantiles in their joint return distribution over the period 1960:M1–2019:M10. Overall, the empirical findings illustrate evidence of low significant dependency between energy and nonenergy commodity markets across different frequencies and quantiles. In addition, our findings show that some nonenergy commodity markets have a neutral relationship with global energy commodity markets.
    Keywords: Energy,Nonenergy,Quantile coherency,Network analysis,Dependence,Commodity markets
    JEL: Q1 Q4 Q02 P28
    Date: 2021
  25. By: Ioannis Chatziantoniou (Economics and Finance Subject Group, University of Portsmouth, Portsmouth Business School, Portland Street, Portsmouth, PO1 3DE, United Kingdom); David Gabauer (Data Analysis Systems, Software Competence Center Hagenberg, Hagenberg, Austria); Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, South Africa)
    Abstract: In this study, we investigate dynamic integration and risk transmission among a set of six well-established crude oil markets by combining frequency connectedness (Barunik and Krehlik, 2018) with the time-varying parameter connectedness approach (Antonakakis et al., 2020). Our study covers the period from May 1996 to December 2020 and focuses on crude oil price volatility. We measure connectedness for both a high and a low-frequency band. Findings are suggestive of relatively strong co-movements over time. For the most part of the sample period, connectedness occurs in the short-run; nonetheless, starting approximately in 2010, long-run connectedness gains much prominence until at least the end of 2015. Long-run connectedness is also prevalent at the beginning of 2020 caused by the COVID pandemic. We opine that periods of increased long-run connectedness relate to deeper changes in the market for crude oil that bring about new dynamics and associations within the specific network.
    Keywords: World crude oil market, TVP-VAR, volatility spillovers, frequency connectedness
    JEL: C32 F30 G10 Q43
    Date: 2021–06
  26. By: Niven Winchester (School of Economics, Auckland University of Technology); Dominic White (School of Economics, Auckland University of Technology)
    Abstract: This paper documents Version 1.0 of the Climate PoLicy ANalysis (C-PLAN) model and presents results for the model’s baseline and a policy scenario. The C-PLAN model is a global, recursive dynamic computable general equilibrium (CGE) model tailored to the economic and emissions characteristics of New Zealand. Distinguishing features in the model include methane-reducing technologies for livestock, bioheat from forestry residues, and explicit representation of output-based allocations of emissions permits. The model was built for New Zealand Climate Change Commission (CCC) to inform policy advice provided to the government. The computer code for the model and instructions for reproducing results used by the CCC are publicly available. It is hoped that the C-PLAN model will assist transparency in setting climate policies, help build capacity for climate policy analysis, and ultimately set the foundations for future climate policy initiatives in New Zealand and other countries.
    Keywords: Climate change mitigation; Computable general equilibrium; Replication; Transparency
    JEL: C68 Q40 Q54 Q58
    Date: 2021–06
  27. By: J. Isaac Miller (Department of Economics, University of Missouri); William A. Brock (Department of Economics, University of Wisconsin-Madison)
    Abstract: Assessments of decreases in economic damages from climate change mitigation typically rely on climate output from computationally expensive pre-computed runs of general circulation models under a handful of scenarios with discretely varying targets, such as the four representative concentration pathways for CO2 and other anthropogenically emitted gases. Although such analyses are valuable in informing scientists and policymakers about massive multilateral mitigation goals, we add to the literature by considering potential outcomes from more modest policy changes that may not be represented by any well-known concentration pathway. Specifically, we construct computationally efficient Quasi-representative Concentration Pathways (QCPs) to leverage concentration pathways of existing peer-reviewed scenarios. Computational efficiency allows for bootstrapping to assess uncertainty. We illustrate our methodology by considering the impact on the relative risk of mortality from heat stress in London from the United Kingdom's net zero emissions goal. More than half of our interval estimate for the business-as-usual scenario covers an annual risk at least that of a COVID-19-like mortality event by 2100. Success of the UK's policy alone would do little to mitigate the risk.
    Keywords: representative scenario building, econometric model of climate change, nonparametric regression, economic damages, heat stress mortality
    JEL: C33 C51 Q54
    Date: 2021
  28. By: Francesca Larosa (Department of Economics, University Of Venice CÃ Foscari Euro-Mediterranean Center on Climate Change); Nadia Ameli (University College of London); Jamie Rickman (University College of London); Sumit Kothari (University College of London)
    Abstract: The financial system is a key tool to enable the shift towards a climate-smart economy: by reallocating capital to low-carbon assets, it internalizes the climate externality. However, the financial sector operates as an ecosystem of evolving agents continuously shaping the outcomes they jointly generate. Hence, the consequences of global warming and the climate impacts are potentially amplified by the micro and meso dynamics of agents interacting with each other and with technologies and institutions in the space they operate. In this working paper, we present a concise but exhaustive review about complex networks models and methods applied to climate finance. We show where networks can overcome the limitations of standard economic models in both macroprudential regulation and capital allocation. We present the main challenges ahead and we discuss the importance of a renewed research-policy dialogue to advance the discipline.
    Keywords: Complex networks, climate finance, complexity economics, energy transition, climate change
    JEL: F21 F64 F65 O13 O16 P18
    Date: 2021
  29. By: Marek Antosiewicz; J. Rodrigo Fuentes; Piotr Lewandowski; Jan Witajewski-Baltvilks
    Abstract: In this paper, we assess the distributional impact of introducing a carbon tax in Poland. We apply a two-step simulation procedure. First, we evaluate the economy-wide effects with a dynamic general equilibrium model. Second, we use a microsimulation model based on household budget survey data to assess the effects on various income groups and on inequality. We introduce a new adjustment channel related to employment changes, which is qualitatively different from price and behavioural effects, and is quantitatively important. We nd that the overall distributional effect of a carbon tax is largely driven by how the revenue is spent: distributing the revenues from a carbon tax as lump-sum transfers to households reduces income inequality, while spending the revenues on a reduction of labour taxation increases inequality. These results could be relevant for other coal-producing countries, such as South Africa, Germany, or Australia.
    Date: 2020
  30. By: Littlechild, S.; Kiesling, L.
    Abstract: Was the Texas blackout a market failure or regulatory failure? The economist Hayek has been adduced in support of both views. Hayek would have approved the competitive Texas system, including ERCOT. His likely view on the scarcity pricing framework is less clear, and the recent regulatory implementation of the “circuit breaker†was problematic. There is now a need to revise the scarcity pricing framework in the light of recent events, and to reflect ever-changing market conditions.
    Keywords: Hayek, Texas blackout, scarcity pricing, retail electricity competition
    JEL: L94 L51 K23 D47 D82
    Date: 2021–06–24
  31. By: Weissman, Shmuel L.
    Abstract: This document constitutes the user manual for tBeam, standalone software for the analysis of energy dissipation in pavements under moving vehicles. tBeam was developed as part of the improvement of modeling capabilities for environmental life cycle assessment of pavements being conducted by the University of California Pavement Research Center for the California Department of Transportation. tBeam is finite element based, employing multi-layered three-node Timoshenko beam elements resting on a viscoelastic Winkler foundation. It provides an approximation of the deflection bowl of pavements and the energy dissipated in pavement structures when subjected to loads moving at constant velocities. tBeam supports two loading options: a uniform pressure (per unit length) applied to a segment at the center of the beam, and a rolling rigid wheel. To achieve numerical efficiency the load-beam-foundation system is represented relative to a moving coordinate system attached to the moving load. The higher efficiency is made possible because, in this framework, an observer attached to the moving coordinate system perceives a “static” state (i.e., independent of time). The standalone tBeam software serves two purposes. First, to provide developers of pavement LCA tools a “guide” as to how to integrate tBeam technology into their program. To this end, the “main” of tBeam can be used as “guide” for integrating tBeam capabilities within the LCA tool. Second, tBeam capabilities are relevant to pavement research in general. Thus, it could represent a useful addition to the toolset for pavement viscoelastic mechanics.
    Keywords: Engineering, pavement energy dissipation, viscoelastic, life cycle assessment, pavement-vehicle interaction, structural response
    Date: 2021–06–01
  32. By: Bondarev, Anton; Dato, Prudence (University of Basel); Krysiak, Frank C.
    Abstract: The transition to a green technology is central to environmental policy. During such a transition, technology and market structure often change simultaneously, as firms developing the new technology enter the market of incumbents supplying the old one. This leads to the questions how technological change and market changes interact and at which stage of the technology transition incumbents or newcomers are more likely to drive the technology transition. We advance a model that describes this co-evolution of technology and market. Our results show that this co-evolution induces substantial market failures. The transition might be blocked by an incumbent protecting the old technology and, even if it is not, emissions decline less rapidly than in the social optimum. Furthermore, incentives change during the transition: At the beginning, entrants can be crucial to start the transition, but, later on, the incumbent will usually become the driving force. When this switch occurs depends on the propensity of the new technology to attract new customers and on the possible speed of technological development. Our results have implications for environmental policy, as they indicate that supporting small new- comers might be desirable at the beginning but can be detrimental at later stages of a technology transition.
    Keywords: Green Technology, Innovation, Imperfect Competition, Endogenous Market Structure, Technology Transition, Emissions, Climate Change
    JEL: C60 L10 O31 Q54 Q55
    Date: 2021–04
  33. 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
  34. By: Valeriya Azarova; Mathias Mier
    Abstract: Detailed numerical models of power markets with millions of variables and equations are often perceived as black boxes, because differences in results cannot be traced back to single equations or assumptions, respectively. We unravel parts of those black box by determining the impact of different investment cost specifications including the role of varying discount and interest rates. We further expand our analysis to the impact of simplifications strategies (foresight, spatial resolution, temporal resolution) that are applied to contain numerical feasibility of such models. The choice of investment cost modeling (and related discount and interest rates) has the highest impact on results. Increasing or decreasing, respectively, complexity in turn, has only minor impacts. Our findings questions the current focus of the literature on complexity of power market models neglecting the most relevant factor, which is the choice of handling investment costs.
    Keywords: Energy system modeling, power market modeling, investment behavior, firm behavior, spatial resolution, temporal resolution, decarbonization
    JEL: C61 C68 Q40 Q41
    Date: 2021
  35. By: Tudela, Fernando
    Abstract: Este documento se plantea como una contribución al papel de la Red Iberoamericana de Oficinas de Cambio Climático (RIOCC), con vistas a mejorar su eficacia y su proyección como instrumento de cooperación regional en materia de cambio climático. La nueva situación mundial, regional, nacional y local obliga a reexaminar iniciativas de cooperación como la de la RIOCC, para ponderar sus perspectivas, limitaciones y oportunidades en el contexto de los procesos para poner freno a la pandemia de COVID-19 y controlar sus consecuencias, y para promover una progresiva recuperación y transición hacia una “normalidad” alternativa, que contribuya a impulsar un desarrollo sostenible.
    Date: 2021–06–30
  36. By: Marie-Theres Schickfus von; Marie-Theres von Schickfus
    Abstract: The tightening of climate policies may cause technologies based on fossil fuels to lose value compared to “green” technologies. For firms with significant fossil-based knowledge, this implies that their firm (market) value is at risk. This technological risk is also relevant for financial market actors, in particular institutional investors following long-term investment strategies. Measuring technological knowledge using patent data at the firm level, this paper uses a dynamic patent count data model and explores whether institutional investors address technological transition risk via engagement activities. Despite robust evidence for a positive influence of institutional investors on overall innovation, no evidence can be found that institutional ownership is associated with a change in the direction of innovation.
    Keywords: Green innovation, climate policy, green finance, climate risk, institutional investors
    JEL: Q55 G23 O34
    Date: 2021
  37. By: Knut Are Aastveit; Jamie Cross; Herman K. Djik
    Abstract: We propose a novel and numerically efficient quantification approach to forecast uncertainty of the real price of oil using a combination of probabilistic individual model forecasts. Our combination method extends earlier approaches that have been applied to oil price forecasting, by allowing for sequentially updating of time-varying combination weights, estimation of time-varying forecast biases and facets of miscalibration of individual forecast densities and time-varying inter-dependencies among models. To illustrate the usefulness of the method, we present an extensive set of empirical results about time-varying forecast uncertainty and risk for the real price of oil over the period 1974-2018. We show that the combination approach systematically outperforms commonly used benchmark models and combination approaches, both in terms of point and density forecasts. The dynamic patterns of the estimated individual model weights are highly time-varying, reflecting a large time variation in the relative performance of the various individual models. The combination approach has built-in diagnostic information measures about forecast inaccuracy and/or model set incompleteness, which provide clear signals of model incompleteness during three crisis periods. To highlight that our approach also can be useful for policy analysis, we present a basic analysis of profit-loss and hedging against price risk.
    Keywords: Oil price, Forecast density combination, Bayesian forecasting, Instabilities, Model uncertainty
    Date: 2021–06
  38. By: Zenghelis, Dimitri
    Abstract: The global economy is facing an unprecedented challenge, with the risk of a protracted depression following the response to COVID-19. In 2014, I argued here that macroeconomic conditions made it a relatively favorable time to kick-start investments in a resource-efficient, low carbon economy. Yet the opportunity was, for the most part, squandered. Failure to utilize active fiscal policy contributed to growing private indebtedness, limited productivity and wage growth and widened inequality helping erode trust in institutions. All the while, greenhouse gas emissions continued to rise. This time, there are grounds for optimism that a more coordinated response toward generating an ambitious transition to net zero emissions might contribute to a strong, sustainable, and resilient recovery. This article is categorized under: Climate Economics > Economics of Mitigation.
    Keywords: Covid; economy; invest; policy; recovery; sustainable; ES/R009708/1
    JEL: J1
    Date: 2021–07–01
  39. By: Hanan Ibrahim; Ahmed Z. Khan; Shady Attia; Yehya Serag
    Abstract: This study aims to develop an integrated classification methodology for retrofitting that preserves both energy use and cultural value aspects in hot climates, especially, in North Africa, as a hot zone, which lacks retrofitting initiatives of built heritage. Despite the number of existing methods of classification for energy purposes, little attention has been paid to integrate the perceptions of cultural values in those methods. The proposed methodology classifies heritage building stocks based on building physical characteristics, as well as heritage significance levels, and then later integrates the outcomes into a matrix to propose sustainable retrofitting scenarios based on three dimensions, i.e. heritage value locations, types, and heritage significance level. For validation, the methodology was applied to the heritage residential building stock along with a microscale analysis on a building in Khedivial Cairo, Egypt. The findings include extracting twelve building classes, providing a reference building for each class, and a detailed catalogue of the extracted reference buildings that includes retrofitting scenarios for creating energy models. The originality of this work lies in integrating cultural values in a building classification methodology and providing a list of sustainable retrofitting scenarios for reference buildings. The findings contribute to fill the gap in existing building classifications, more specifically in hot climates.
    Keywords: Built heritage; Cultural values; Downtown Cairo; Energy retrofitting; Hot climates
    Date: 2021–01
  40. By: Lubos Pastor; Robert F. Stambaugh; Lucian A. Taylor
    Abstract: Green assets delivered high returns in recent years. This performance reflects unexpectedly strong increases in environmental concerns, not high expected returns. German green bonds outperformed their higher-yielding non-green twins as the "greenium" widened, and U.S. green stocks outperformed brown as climate concerns strengthened. To show the latter, we construct a theoretically motivated green factor—a return spread between environmentally friendly and unfriendly stocks—and find that its positive performance disappears without climate-concern shocks. The factor lags those shocks, curiously, by about a month. A theory-driven two-factor model featuring the green factor explains much of the recent underperformance of value stocks.
    JEL: G12 G14
    Date: 2021–06
  41. By: Xuwen Gao; Ran Song; Christopher Timmins
    Abstract: In this paper, we study the role of information in non-market valuation. We develop a variant of the Rosen-Roback model of inter-urban sorting that incorporates public access to information about air quality, and demonstrate that information constraints create a wedge between the revealed and true hedonic prices. Moreover, the direction and the magnitude of that wedge depends on the individual’s perception bias. We empirically test our theoretical predictions by leveraging a natural experiment – the unexpected disclosure of PM2.5 data in China. We find that perception bias before the data disclosure leads to a downward estimation bias in hedonic valuation. The hedonic price of avoiding PM2.5 exposure increases substantially from 171 to 336 Chinese Yuan in response to the information shock. Our work sheds light on the application of Rosen-Roback theory for non-market valuation in countries where the public access to information is restricted.
    JEL: Q51 Q53 R23
    Date: 2021–06
  42. By: Nie, Peng (Xi’an Jiaotong University); Li, Qiaoge (Xi’an Jiaotong University); Sousa-Poza, Alfonso (University of Hohenheim)
    Abstract: Using the 2012-2018 waves of the China Family Panel Studies, we investigate the impact of energy poverty (EP) on subjective well-being (SWB) among Chinese adults aged 18 and over. In addition to documenting EP rates in the range of 13.2% to 35.3% (dependent on measurement used), we show that EP lowers life satisfaction, with more pronounced impacts among males, the poor, and those residing in central regions. These results are robust to both alternative EP and SWB measures and to a series of estimation approaches that control for endogeneity. An additional structural equation modelling analysis of underlying mechanisms confirms that individual self-reported health, housing quality, and household food expenditure mediate the EP-SWB relation.
    Keywords: energy poverty, life satisfaction, happiness, depression, China
    JEL: I10 I12 R21
    Date: 2021–05
  43. By: Sebastian Rohe (Institute of Social Sciences, Carl von Ossietzky University, Germany); Camilla Chlebna (Institute of Social Sciences, Carl von Ossietzky University, Germany)
    Abstract: In transition studies, formal inter-organizational networks – ‘networking organizations’ – are considered essential for inducing socio-technical change. Yet, there is little research on how their structural composition and role evolve in advanced transitions and which tensions arise over time. We address these gaps by combining insights from network research in social and economic science with transition studies, where networking organizations are conceptualized as intermediaries and key elements of Technological Innovation Systems. We synthesize a framework capturing the evolution of and result-ing tensions within networking organizations in sustainability transitions. It is applied to two regional energy networking organizations from Germany. We draw on qualitative expert interviews and a complementary social network analysis. We show that networking organizations do not necessarily stabilize once the initial technologies they were centered around become established. Instead, their member base broadens to different sectors. This can lead to tensions over the networking organiza-tions’ scope. Tensions also arise from misalignments between ‘private’ goals of member firms and the ‘public’ goal of transforming system-level structures. Furthermore, complementary or competing networking organizations might emerge during the transition. Managers need to navigate these ten-sions and regularly review the networking organization’s mission to maintain its relevance in the transition process.
    Keywords: networking organizations, networks, regional energy transitions, sustainability transitions, intermediaries, technological innovation systems
    Date: 2021
  44. By: Ghafelebashi, Ali; Razaviyayn, Meisam; Dessouky, Maged
    Abstract: Rapid population growth and development in cities across the globe have fueled an inescapable urban burden: traffic congestion. Congestion causes huge economic losses and increased vehicle emissions, which contribute to poor air quality. Over the past several decades traffic engineers have tried various strategies to reduce congestion, ranging from increasing roadway capacity to transportation demand management programs. An alternative travel demand management approach that has garnered less attention is the use of positive incentive programs— rewarding desirable behavior rather than penalizing undesirable behavior—to reduce congestion. Researchers at the University of Southern California developed a real-time, distributed algorithm for offering personalized incentives to individual drivers to make socially optimal routing decisions. The methodology relies on online and historical traffic data as well as individual preferences and routing options from drivers’ origins and destinations to estimate both the traffic condition and the drivers’ responses to the provided incentives. This policy brief summarizes the findings from that research and provides policy implications. View the NCST Project Webpage
    Keywords: Engineering, Social and Behavioral Sciences, Algorithms, Congestion management systems, Incentives, Optimization, Pollutants, Routes and routing, Smartphones, Traffic congestio
    Date: 2021–07–01
  45. By: Huwe, Vera
    Abstract: This paper develops the justice implications of gendered power relations for transport decarbonization. I build on the need satisfier escalation framework by Mattioli (2016) and Brand-Correa et al. (2020) and its account of justice as equality in need satiation. I show that gendered power relations manifest at the level of the provisioning system as a profound gendered division of labor and androcentric biases in the built environment. Based on the German travel survey Mobilität in Deutschland (2017), I document how gendered arrangements in the provisioning system reverberate as gendered inequalities in car access, travel behavior and trip purpose, yet significantly intersect with household income and migration biography. Normatively, I argue that an account of justice recognizant of gendered power relations extends justice to inputs for and conversion rates faced in need satisfaction processes. Building on Susan Okin (1989), I establish that justice additionally requires (i) the intra-household division of labor for need satisfaction to be chosen freely and (ii) equality of opportunity to satiate needs. Androcentric biases in the built environment create gendered conversion rates and constrain equality of opportunity. Consequently, transport decarbonization policy needs to equalize conversion rates for care relative to paid employment when de-escalating carbon intensity to be just.
    Keywords: Transport,Human Needs,Climate Change,Gender Division of Labor,Urban Planning,Gender Justice
    Date: 2021

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