nep-ene New Economics Papers
on Energy Economics
Issue of 2021‒09‒13
thirty-six papers chosen by
Roger Fouquet
London School of Economics

  1. Barriers to Firms Energy Efficiency in Transition Countries By Antonella Biscione; Dorothee Boccanfuso; Annunziata de Felice; Francesco Porcelli
  2. Using Extended Model of Theory of Planned Behavior to Predict Purchase Intention of Energy Efficient Home Appliances in Pakistan By Waris, Idrees; Hameed, Irfan
  3. Macroeconomic and microeconomic environmental and energy policies: are they effective for improving the environmental performance of listed companies? By Donatella Baiardi; Maria Gaia Soana
  4. Water Conservation and the Common Pool Problem: Can Pricing Address Free-Riding in Residential Hot Water Consumption? By Elinder, Mikael; Hu, Xiao; Liang, Che-Yuan
  5. The information value of energy labels: Evidence from the Dutch residential housing market By Lu Zhang; Lennart Stangenberg; Sjors van Wickeren
  6. The Further Economic Consequences of Brexit: Energy By Pollitt, M .G.
  7. Are Consumers Myopic About Future Fuel Costs? Insights from the Indian two-wheeler market By Prateek Bansal; Rubal Dua; Rico Krueger; Daniel Graham
  8. North-South Displacement Effects of Environmental Regulation: The Case of Battery Recycling By Tanaka, Shinsuke; Teshima, Kensuke; Verhoogen, Eric
  9. Assessing the Role of Renewables in Reducing Emissions in the Saudi Power Sector Using Mixed-Integer Optimization By Amro ElShurafa; Hatem Alatawi; Salaheddine Soummane; Frank Felder
  10. Perceptions of Cannibalization: Empirical investigation of wind penetration impacts on the wholesale electricity market. By Ajanaku, Bolarinwa A.; Collins, Alan R.
  11. Level of Education and Renewable Energy Consumption Nexus in Saudi Arabia By Mahmood, Haider
  12. Optimal siting of onshore wind turbines: Local disamenities matter By Lehmann, Paul; Reutter, Felix; Tafarte, Philip
  13. Detection of Structural Regimes and Analyzing the Impact of Crude Oil Market on Canadian Stock Market: Markov Regime-Switching Approach By Mohammadreza Mahmoudi; Hana Ghaneei
  14. Oil extraction and spillover effects into local labour market: Evidence from Ghana By Akwasi Ampofo; Terence C Cheng; Firmin Doko Tchatoka
  15. The Presource Curse: Anticipation, Disappointment, and Governance after Oil Discoveries By Katovich, Erik S.
  16. Reverse Dutch Disease with Trade Costs: Prospects for Agriculture in Africa's Oil-Rich Economies By Porteous, Obie C.
  17. Evacuation Network Modeling for Alternative Fuel Vehicles By Denissa Sari Darmawi Purba; Eleftheria Kontou; Chrysafis Vogiatzis
  18. Changes in the Relationship between Nitrogen Fertilizer and Natural Gas Prices in the U.S. By Wongpiyabovorn, Oranuch
  19. Have Biofuel Policies More Closely Linked Energy and Livestock Markets? By Davis, James D.; Adjemian, Michael K.
  20. The Imperative for Cellulosic Biofuels in an Electrifying Vehicle Market By Zhong, Jia; Khanna, Madhu
  21. DART-BIO: A technical description By Delzeit, Ruth; Heimann, Tobias; Schünemann, Franziska; Söder, Mareike
  22. A European Wealth Tax for a Fair and Green Recovery By Rafael Wildauer; Stuart Leitch; Jakob Kapeller
  23. What do you think about climate change? By Donatella Baiardi
  24. A Fuzzy Set Analysis of the Determinants of Intention to Adapt and Pro-environmental Behaviour: The case of Egypt By Sara Eldeeb; Maria do Rosario Correia; Christian Richter
  25. The nexus between urbanization, renewable energy consumption, financial development, and CO2 emissions: evidence from selected Asian countries By Anwar, Ahsan; Sinha, Avik; Sharif, Arshian; Siddique, Muhammad; Irshad, Shoaib; Anwar, Waseem; Malik, Summaira
  26. Climate policy is macroeconomic policy, and the implications will be significant By Jean Pisani-Ferry
  27. Climate Protection Potentials of Digitalized Production Processes: Microeconometric Evidence By Axenbeck, Janna; Niebel, Thomas
  28. Energy and Economic Implications of Carbon Neutrality in China -- A Dynamic General Equilibrium Analysis By Shenghao Feng; Xiujian Peng; Philip Adams
  29. Pollution, partial privatization and the effect of ambient charges By Ohnishi, Kazuhiro
  30. Using Temperature Sensitivity to Estimate Shiftable Electricity Demand Implications for power system investments and climate change By Michael J. Roberts; Sisi Zhang; Eleanor Yuan; James Jones; Matthias Fripp
  31. Oil Price Pass-Through into Consumer Prices: Evidence from U.S. Weekly Data By Hakan Yilmazkuday
  32. Computational aspects of sustainability: Conceptual review and analytical framework By Halkos, George; Tsilika, Kyriaki
  33. Costs, Reliability, Vehicle Characteristics, and Incentives are the Top Factors Influencing Freight Vehicle Technology Choices By Jaller, Miguel
  34. Optimal Mix of Policy Instruments and Green Technology Transitions By Dato, Prudence; Krysiak, Frank C.
  35. The price of indoor air pollution: evidence from risk maps and the housing market By Pinchbeck, Edward W.; Roth, Sefi; Szumilo, Nikodem; Vanino, Enrico
  36. Bank Carbon Risk Index – A simple indicator of climate-related transition risks of lending activity By Laszlo Bokor

  1. By: Antonella Biscione (Department of Bioeconomic Strategies in the European Union and in the Balkans CESPIC, Catholic University Our Lady of Good Counsel); Dorothee Boccanfuso (Faculte de Gouvernance, Sciences Economiques et Sociales, AIRESS, Universite Mohammed VI Polytechnique); Annunziata de Felice; Francesco Porcelli (Department of Law, University of Bari Aldo Moro; Department of Law, University of Bari Aldo Moro)
    Abstract: This study seeks to explore the firm barriers of energy efficiency in a set of 28 Transition economies exploiting the enterprise survey data collected by the European Bank for Reconstruction and Development (EBRD) jointly with the European Investment Bank (EIB) and the World Bank Group (WBG). Based on the Ordinary Least Square (OLS) regression model and on the construction of three different indicators to evaluate the energy efficiency, we find that the barriers to the adoption of energy efficiency measures mainly lack financial resources and profitability. Findings obtained from the interactions are also worthy of note. In particular, we find that the absence of profitability starts being stronger for non-EU countries. Instead, there is no evidence of heterogenous effects for industry sectors.
    Keywords: Firms energy efficiency, Barriers, Transition economies
    JEL: D22 K32 L29
    Date: 2021–05
  2. By: Waris, Idrees; Hameed, Irfan
    Abstract: Government and private sectors of Pakistan have witnessed a huge gap in the demand and supply of energy, encouraging companies to introduce energy efficient products into the market. This led to boost in the demand of energy efficient home appliances. Energy efficient home appliances are the important sources of energy saving and help to reduce carbon emissions into the environment. The purpose of this study is to develop a theoretical framework of consumers’ purchase intention of energy efficient home appliances. Four important constructs of purchase intention have been added into the theory of planned behavior such as consumers’ knowledge of eco-labels, green trust, environmental concern and functional values. Purposive sampling technique has been used to assess data collected by a questionnaire survey. The Partial Least Square (SEM) was employed to analyze hypothesized model. The findings of the study reveal that consumers’ knowledge of eco-labels, environmental concern and perceived consumer effectiveness are the important predictor of purchase intention. However, the positive relationship between green trust and products’ functional value is insignificant. It is believed that consumers’ are skeptical about products’ functional benefits. Therefore, marketers should focus on developing green trust related to products’ attributes. Moreover, the results of the study would be helpful in understanding consumers’ behavior towards the purchase of green products in developing markets.
    Keywords: Eco-labels, green trust, Environmental concern, perceived consumer effectiveness and purchase intention
    JEL: M31
    Date: 2019–10–31
  3. By: Donatella Baiardi; Maria Gaia Soana
    Abstract: We empirically investigate the effectiveness of environmental and energy policies, complying with legal requirements or followed voluntarily by firms, on the proenvironmental efforts of 63 listed firms in Italy in the years 2008-2019. Our research design combines macroeconomic data referring to general policies for reducing air emissions, renewable energy interventions and energy efficiency measures with analogous policies applied at firm level on voluntary basis. The empirical analysis is performed in a panel data context by means of propensity score matching with multiple treatments, which allows us to test the effectiveness of (1) macroeconomic policies on firm environmental performance; (2) microeconomic policies on firm environmental performance, and (3) the coexistence of macroeconomic and microeconomic policies on firm environmental performance. Our results show that the effectiveness of these interventions, applied either separately or jointly, depends on the type of indicator used to proxy firm environmental performance. In particular, we find that the social costs of climate change are not internalized by listed companies, and that macroeconomic interventions are an excellent tool to implement because they are effective to fight climate change where voluntary actions fail and are also complementary to voluntary actions, since they support their effectiveness.
    Keywords: Firm environmental performance; General policies for reducing air emissions, Renewable energy policies; Energy efficiency policies; Propensity score matching with multiple treatments; Italian listed companies.
    Date: 2021–08
  4. By: Elinder, Mikael (Department of Economics, Uppsala University); Hu, Xiao (Department of Forest Economics and Center for Environmental and Resource Economics (CERE)); Liang, Che-Yuan (Institute for Housing and Urban Research (IBF) and Department of Economics)
    Abstract: Water is an increasingly scarce resource. It is often distributed such that consumers do not face any marginal cost of consumption, creating a common pool problem. For instance, tenants in multi-family buildings can often consume both hot and cold water at zero marginal cost. Using high-frequency data over many years, we analyze how the introduction of apartment-level metering and billing (IMB) affects hot water consumption. We find that introducing a marginal cost, reflecting the market price, decreases consumption drastically by 26%. Hence, price interventions can curb free-riding behavior and help the conservation of cheap but precious resources. Our results also show that heavy water users in the top consumption quartile account for 72% of the reduction. Moreover, cost-benefit calculations indicate that IMB for hot water is a cost-effective policy tool for reducing water and energy consumption.
    Keywords: esidential water consumption; Water conservation; Common pool problem; Free-riding; Individual metering and billing
    JEL: D12 Q21 Q25 Q28
    Date: 2021–09–06
  5. By: Lu Zhang; Lennart Stangenberg (RUG); Sjors van Wickeren (EUR)
    Abstract: Do energy labels contain extra information that buyers cannot observe themselves? Which labeling scheme is more effective: a voluntary or a mandatory one? In this paper we examine the information value of voluntary and mandatory energy labels using administrative data on all transactions in the Dutch residential housing market. Employing a combination of hedonic price models, matching and a sharp Regression Discontinuity Design (RDD), we show that voluntary labels introduced in the period 2008-2014 contain limited information value. The information value of mandatory labels that are adopted since 2015 is less clear-cut. We observe that better-labeled dwellings were transacted with significant price premiums before obtaining labels. This implies that at least part of the premiums cannot be attributed to mandatory labels.
    JEL: R38 R58
    Date: 2020–05
  6. By: Pollitt, M .G.
    Abstract: The UK left the European single market in energy on 31 December 2020, having been a leading light in its promotion. It entered into a new energy relationship with the EU-27 as outlined in the EU-UK Trade and Cooperation Agreement (TCA) on 1 January 2021. This paper discusses what has happened to the UK energy sector since the Brexit referendum of June 2016. Since our previous paper on this topic in 2017, there has been a significant clarification in the impact of Brexit on the energy sector in the UK. We outline what the TCA says about energy. We then discuss the current and potential future effects of Brexit on the UK electricity and gas systems in turn. We observe that the likely economic welfare impacts on electricity are larger than the impacts on gas, but the overall microeconomic impact appears likely to be modest (but negative). We offer a number of concluding observations.
    Keywords: Brexit, Trade and Cooperation Agreement, market coupling
    JEL: L94
    Date: 2021–09–06
  7. By: Prateek Bansal; Rubal Dua; Rico Krueger; Daniel Graham (King Abdullah Petroleum Studies and Research Center)
    Abstract: India has the world’s third highest carbon dioxide (CO2) emissions, after China and the United States. The transportation sector is the third largest contributor to carbon dioxide emissions in India, accounting for roughly 11% of all carbon dioxide emissions in 2016. Road transport accounts for around 94% of the total carbon dioxide emissions of the transportation sector.
    Keywords: Aviation consumption, Aviation oil demand, Crude oil, Diesel
    Date: 2021–08–24
  8. By: Tanaka, Shinsuke (Tufts University); Teshima, Kensuke (ITAM, Mexico); Verhoogen, Eric (Columbia University)
    Abstract: This study examines the effect of a tightening of the U.S. air-quality standard for lead in 2009 on the relocation of battery recycling to Mexico and on infant health in Mexico. In the U.S., airborne lead dropped sharply near affected plants, most of which were battery-recycling plants. Exports of used batteries to Mexico rose markedly. In Mexico, production increased at battery-recycling plants, relative to comparable industries, and birth outcomes deteriorated within two miles of those plants, relative to areas slightly farther away. The case provides a salient example of a pollution-haven effect between a developed and a developing country.
    Keywords: pollution-haven hypothesis, environmental regulation, infant health
    JEL: F18 Q56 O15
    Date: 2021–08
  9. By: Amro ElShurafa; Hatem Alatawi; Salaheddine Soummane; Frank Felder (King Abdullah Petroleum Studies and Research Center)
    Abstract: Renewable energy (RE) technologies are viewed as a critical means of reducing power sector-related emissions. Using mixed-integer optimization, we evaluate the extent to which renewable energy reduces carbon emissions in the Saudi power sector.
    Keywords: Energy Mix
    Date: 2021–06–02
  10. By: Ajanaku, Bolarinwa A.; Collins, Alan R.
    Keywords: Resource/Energy Economics and Policy, Environmental Economics and Policy, Productivity Analysis
    Date: 2021–08
  11. By: Mahmood, Haider
    Abstract: Purpose: A level of education may change the energy consumption habits of people. Further, economic growth may also demand cleaner energy consumption for better environmental quality. This research explores the impacts of education and economic growth on the renewable energy consumption of Saudi Arabia. Methodology: This research utilizes the unit root test of Dickey & Fuller (1981), cointegration test of Pesaran et al. (2001), and bound testing values of Kripfganz & Schneider (2020). Main Findings: Income and secondary education increase Renewable Energy Consumption (REC) in the long and short run. Primary education reduces REC in the long run, and the lag of primary education has a positive effect on REC. Implication: This research recommends to increase the level of education to promote renewable energy consumption for a cleaner environment. Novelty: Educational level and renewable energy consumption nexus have not been investigated in Saudi Arabia. Therefore, we claim an empirical contribution.
    Keywords: Level of Education, Economic Growth, Renewable Energy Consumption, Cointegration
    JEL: Q29
    Date: 2020–09–13
  12. By: Lehmann, Paul; Reutter, Felix; Tafarte, Philip
    Abstract: The deployment of onshore wind power is an important means to mitigate climate change. However, wind turbines also produce local disamenities to residents living next to them, mainly due to noise emissions and visual effects. Our paper analyzes how the presence of local disamenities affects the socially optimal siting of onshore wind power. The analysis builds on a spatial optimization model using geographical information system (GIS) data for Germany. Our results indicate a major spatial trade-off between the goals of minimizing electricity generation and disamenity costs. Considering disamenity costs substantially alters - and in fact dominates - the socially optimal spatial allocation of wind power deployment. This is because in Germany a) the spatial correlation between generation costs and disamenity costs is only moderately positive, and b) disamenity costs exhibit a larger spatial heterogeneity than the generation costs. These results are robust to variations in the level and slope of the disamenity cost function that we assume for the modeling. Our findings emphasize the importance of supplementing support schemes for wind power deployment with approaches that address local disamenties, e.g., compensation payments to local residents or minimum settlement distances.
    Keywords: Externality,Germany,renewable energy,spatial optimization,wind power
    JEL: D62 Q42 Q51 Q53 R14
    Date: 2021
  13. By: Mohammadreza Mahmoudi; Hana Ghaneei
    Abstract: This study aims to analyze the impact of the crude oil market on the Toronto Stock Exchange Index (TSX) based on monthly data from 1979 to 2018 using a nonlinear Markov regime-switching approach. The results indicate that TSX return contains two regimes, including: positive return (regime 1), when growth rate of stock index is positive; and negative return (regime 2), when growth rate of stock index is negative. The findings also show the crude oil market has positive effect on the stock market in both regimes, however, the effect of oil price on the stock market in regime 1 is more than regime 2. Moreover, two period lag of oil price increases stock price in regime 1, while it decreases stock price in regime 2
    Date: 2021–08
  14. By: Akwasi Ampofo (University of Adelaide College); Terence C Cheng (School of Public Health, Harvard University); Firmin Doko Tchatoka (School of Economics & Public Policy, The University of Adelaide)
    Abstract: This paper investigates the effects of oil extraction on local labour market outcomes. Using household-level data from the Ghana Living Standard Survey, we employ a difference-in-differences approach to show that oil extraction has negative spillover effects on employment but no significant effect on average income. However, the effects vary by migration status, gender and employment sector. Specifically, we observe that migrants, men and agricultural workers experienced significant income spillovers from the oil boom than locals, women and workers in other sectors. In addition, the oil boom resulted in a negative welfare impact as it widened inequality for individuals close to the extraction areas.
    Keywords: Oil extraction; Spillover effects; Employment; Resource booms; Migration; DID estimation
    Date: 2021–08
  15. By: Katovich, Erik S.
    Keywords: Resource/Energy Economics and Policy, International Development, Institutional and Behavioral Economics
    Date: 2021–08
  16. By: Porteous, Obie C.
    Keywords: International Development, International Relations/Trade, Agricultural and Food Policy
    Date: 2021–08
  17. By: Denissa Sari Darmawi Purba; Eleftheria Kontou; Chrysafis Vogiatzis
    Abstract: As the number of adopted alternative fuel vehicles increases, communities that are susceptible to hazardous events, such as hurricanes and wildfires, need to create new evacuation plans that account for their refueling needs. During emergencies that require preemptive evacuation, drivers using alternative fuel vehicles are left vulnerable under conventional evacuation routes which do not provide access to refueling stations on their way to shelters. In this paper, we formulate a novel evacuation routing problem which considers multiple types of fuel vehicles. Specifically, we introduce a $k$-spanning evacuation tree problem with hop constraints that capture the refueling needs of each vehicle fuel type $k \in K$ as they are routed to a shelter. We provide a mixed integer mathematical formulation for the problem along with a path-based reformulation which allows us to create a column-generation based matheuristic to efficiently solve the problem. Next, we apply the proposed framework to the Sioux Falls transportation network considering that refueling stations for alternative fuel vehicles are placed to serve habitual demands. We present a series of numerical experiments where we discuss optimal travel and refueling times under different driving ranges for each vehicle type. Our findings show that the characteristics of each vehicle fuel type (driving range and infrastructure siting) play a pivotal role in determining the optimal evacuation trees. Evacuation routes that are optimal for one type of vehicles are often infeasible for the remaining vehicles; furthermore, driving range constraints and the need to refuel could force evacuees to detour prior to reaching safety.
    Date: 2021–09
  18. By: Wongpiyabovorn, Oranuch
    Keywords: Production Economics, Marketing, Agricultural Finance and Management
    Date: 2021–08
  19. By: Davis, James D.; Adjemian, Michael K.
    Keywords: Agricultural and Food Policy, Agricultural Finance, Agribusiness
    Date: 2021–08
  20. By: Zhong, Jia; Khanna, Madhu
    Keywords: Institutional and Behavioral Economics, Resource/Energy Economics and Policy, Environmental Economics and Policy
    Date: 2021–08
  21. By: Delzeit, Ruth; Heimann, Tobias; Schünemann, Franziska; Söder, Mareike
    Abstract: The goal of this technical paper is to present in a transparent way a detailed description of the DART-BIO model - the bioeconomy and land use version of the DART model. Key feature of the DART-BIO model is the explicit representation of the vegetable oil industry and the biofuel sector. The paper describes the construction and aggregation of the database used for the DART-BIO model. Further the theoretical structure of the model is elaborated. Thereby, crucial assumptions, elasticities and parameters embedded in the model are presented.
    Keywords: CGE model,bioeconomy,climate policy,land use
    JEL: C68 Q16 Q24
    Date: 2021
  22. By: Rafael Wildauer (Department of International Business and Economics, University of Greenwich); Stuart Leitch (University of Greenwich); Jakob Kapeller (Institute for Socio-Economics, University of Duisburg-Essen, Germany; Institute for Comprehensive Analysis of the Economy, Johannes Kepler University Linz, Austria)
    Abstract: This paper investigates the potential of a European net wealth tax to raise substantial revenues while supporting the economy and the consensus on climate action. To achieve this, household survey data from the European Central Bank (covering 22 EU countries) are analysed. To address the problem of under-reporting of wealth at the top of the distribution in survey data, a Pareto distribution is fitted to the right tail of the data and used to create an amended data set which also represents these missing rich, whose wealth goes unreported.
    Date: 2021–09
  23. By: Donatella Baiardi
    Abstract: To answer this question, this paper reviews the huge and growing body of empirical literature on climate change awareness, and summarizes insights emerging from a critical review of about 140 papers. In particular, this survey provides (i) a historical overview of climate change awareness worldwide, (ii) a guide to the most widely used datasets, with a peculiar attention to the question wording employed to measuring climate change awareness when the analysis is performed at individual level; (iii) a detailed review of the main socio-economic and climatological determinants of climate change awareness, such as age, gender, education, political values, experience of extreme weather conditions, social and institutional trust and the stage of development of the country where people live; and (iv) a summary of the main implications of these findings in terms of public policy responses.
    Keywords: climate change awareness, individual perceptions, question wording, socio-economic determinants; policy implications
    Date: 2021–08
  24. By: Sara Eldeeb (Faculty of Management Technology, German University in Cairo); Maria do Rosario Correia (Faculty of Management Technology, German University in Cairo); Christian Richter (Faculty of Managemennt Technology, German University in Cairo)
    Abstract: Climate Change experienced recently wider public attention through the actions of activist groups such as extinction rebellion and the Fridays for Future movement. It seems an increasing number of people around the world is aware of climate change and its associated problems. Apart from participating in above activities, a question arises regarding what drives people to show a willingness to mitigate the effects of climate change. In this paper we investigate potential determinants for the intention to adapt to climate change and to adopt a pro-environmental behaviour. We use a Fuzzy Set qualitative comparative analysis to identify the key drivers. We find that the key drivers are awareness combined with a willingness to pay to mitigate climate change, personal responsibility and confidence in the ability to mitigate climate change. Furthermore, the key drivers for exhibiting pro-environmental behaviour are societal engagement and willingness to take action. Overall, this paper contributes to increase the understanding of key cognitive, social-psychological and behavioural factors which lead to environmental actions and provides policy-makers with a framework to support a more sustainable society.
    Keywords: Theory of Planned Behaviour, Fuzzy Set Qualitative Comparative Analysis, Climate Change, Pro-environmental intention and behaviour.
    JEL: C31 C38 C83 Q54
    Date: 2019–11
  25. By: Anwar, Ahsan; Sinha, Avik; Sharif, Arshian; Siddique, Muhammad; Irshad, Shoaib; Anwar, Waseem; Malik, Summaira
    Abstract: In terms of attaining the objectives of Sustainable Development Goals (SDGs), the Asian economies are considered as laggards, and one of the major problems faced by these economies is the issue of environmental degradation. For addressing this pertaining issue, a policy-level reorientation might be necessary. In this view, this study aims to explore the impact of urbanization, renewable energy consumption, financial development, agriculture, and economic growth on CO2 emissions in 15 Asian economies over 1990-2014. The empirical evidence demonstrates that urbanization, financial development, and economic growth increase CO2 emissions, renewable energy consumption reduces CO2 emissions, and the impact of agriculture is insignificant. Impulse response function and variance decomposition techniques are used to test the causality among the variables. Based on the study outcomes, a comprehensive SDG-oriented policy framework has been recommended, so that these economies can make progression towards attaining the objectives of SDG 13 and SDG 7. This study contributed to the literature by recommending this SDG-oriented policy framework, which encapsulates economic growth and its drivers.
    Keywords: Urbanization; Renewable Energy Consumption; Financial Development; CO2 emission; SDG
    JEL: Q2 Q4 Q5
    Date: 2021
  26. By: Jean Pisani-Ferry (Peterson Institute for International Economics)
    Abstract: For all the long-term benefits of urgently addressing climate change, economic policymakers must plan for a challenging transition to carbon neutrality. Pretending that the costs will be trivial is dangerous. Estimates by the Intergovernmental Panel on Climate Change of the United Nations indicate that emergency action is indispensable to limit catastrophic climate disruption. Because of the magnitude of the efforts involved and the pace of the transformation implied, the accelerated transition to a carbon-neutral economy is bound to have serious, immediate economic implications, warns Pisani-Ferry. Some equipment will lose economic value. Some plants will have to close. Employees will have to be reallocated to other occupations. Investment will have to increase, to repair or rebuild infrastructure and the capital stock. He argues that so far policymakers have not addressed these implications in a systematic manner. It is high time policymakers realize that climate policy is also macroeconomic policy and design transition strategies now.
    Date: 2021–08
  27. By: Axenbeck, Janna; Niebel, Thomas
    Abstract: Although information and communication technologies (ICT) consume energy themselves, they are considered to have the potential to improve overall energy efficiency within economic sectors. While previous empirical evidence is based on aggregated data, this is the first large-scale empirical study on the relationship between ICT and energy efficiency at the firm level. For this purpose, we employ administrative panel data on 28,734 manufacturing firms from German Statistical Offices of the Federation and the Federal States collected between 2009 and 2017. Using software capital intensity as an indicator for the firm-level degree of digitalization, we analyze whether an increase thereof relates to energy efficiency improvements. Results confirm the statistically significant negative link between software capital and energy use. However, the relationship is highly inelastic and does not suggest economic relevance. Therefore, we conclude that effects of ICT on energy use are not large enough to substantially improve energy efficiency.
    Keywords: Digitalization,ICT,Firm Level,Energy Efficiency
    Date: 2021
  28. By: Shenghao Feng; Xiujian Peng; Philip Adams
    Abstract: This study investigates the energy and economic implications of China's carbon neutrality path over the period of 2020 to 2060. We use a recursive dynamic CGE model, CHIANGEM-E, to conduct the analysis. Notable advancements from the original CHINAGEM model include: 1) detailed energy sector disaggregation, 2) a new electricity generation nesting structure, and 3) carbon capture and storage (CCS) mechanisms. Our simulation shows that to achieve carbon neutrality in 2060, China needs change its energy consumption structure significantly. Coal and gas consumption will decline dramatically while the demand for renewable energy, especially demand for solar and wind energy will increase considerably. However, the negative effects of the dramatic carbon emission reduction on China's macro economy is limited. In particular, by 2060 real GDP will be 1.36 percent lower in carbon neutrality scenario (CNS) than in the base case scenario. The carbon price level will be 1614 CNY per tonne of carbon dioxide in 2060 in CNS. The substantial changes in China's energy structure imply significant changes to its fossil fuel imports. China's import demand for coal, crude oil and gas will all fall sharply. By 2060, China's imports of coal and gas will be more than 60% lower and its oil imports will be around 50% lower than their respective base-case levels.
    Keywords: Carbon neutrality, economic implication, energy consumption, China, CGE
    JEL: C68 Q4
    Date: 2021–08
  29. By: Ohnishi, Kazuhiro
    Abstract: This paper examines a mixed Cournot duopoly model comprising a private firm and a partially privatized public firm to reassess the effect of an increase in ambient charges, and demonstrates that the result of this study is about the same as that obtained from private Cournot duopoly competition.
    Keywords: ambient charge; Cournot duopoly; environmental regulation; partial privatization; pollution
    JEL: C72 D21 L33 Q58
    Date: 2021–02–27
  30. By: Michael J. Roberts (University of Hawai‘i at Manoa Department of Economics, University of Hawai‘i Economic Research Organization, University of Hawai‘i Sea Grant College Program); Sisi Zhang (University of Hawai‘i at Manoa Department of Economics); Eleanor Yuan (University of Hawai‘i at Manoa Department of Economics); James Jones (Northern Virginia Electric Cooperative); Matthias Fripp (University of Hawai‘i Economic Research Organization, Department of Electrical Engineering, University of Hawai‘i)
    Abstract: Growth of intermittent renewable energy and climate change make it increasingly difficult to manage electricity demand variability. Transmission and centralized storage technologies can help, but are costly. An alternative to centralized storage is to make better use of shiftable demand, but it is unclear how much shiftable demand exists. A significant share of electricity demand is used for cooling and heating, and low-cost technologies exists to shift these loads. With sufficient insulation, energy used for air conditioning and space heating can be stored in ice or hot water from hours to days. In this study, we combine regional hourly demand with fine-grained weather data across the United States to estimate temperature-sensitive demand, and how much demand variability can be reduced by shifting temperature-sensitive loads within each day, with and without improved transmission. We find that approximately three quarters of within-day demand variability can be eliminated by shifting only half of temperature-sensitive demand. The variability-reducing benefits of employing available shiftable demand complement those gained from improved interregional transmission, and greatly mitigate the challenge of serving higher peaks under climate change.
    Date: 2021–09
  31. By: Hakan Yilmazkuday (Department of Economics, Florida International University)
    Abstract: Using U.S. data from Monday of each week, this paper estimates oil price pass-through into consumer prices (PC) and oil price pass-through into gasoline retail prices (PG) in a continuous way. The results show that PC (PG) is about 0.5% (13%) after a week, 1.5% (37%) after three months, and 4.2% (50%) in the long run. The estimated PC is further decomposed into direct PC (representing oil price effects on consumer prices through gasoline retail prices) versus indirect PC (representing oil price effects on consumer prices through ex-gasoline prices), suggesting that long-run oil price effects on consumer prices are mostly through ex-gasoline consumer prices. Despite having distinct pass-through estimates, about three-fourths of weekly volatility in both gasoline retail and consumer prices are explained by oil price shocks in the long run.
    Keywords: Pass-Through, Oil Prices, Gasoline Prices, Consumer Prices, Weekly Data
    JEL: E31 Q43
    Date: 2021–09
  32. By: Halkos, George; Tsilika, Kyriaki
    Abstract: The main purpose of the present study is to feature the computational practice of green policy performance measurement. Computing the progress of the green economy includes topics as indicators and measures to characterize environmental sustainability, methodological issues to indicate and present spatiotemporal patterns of resource use and pollution, computational frameworks for comparisons of environmental management among economies / economic sectors / socio-economic systems, computational techniques to define the structure, dynamics, and change in ecosystems. Results are discussed in support of green policies.
    Keywords: Computational Economics; Sustainability.
    JEL: C60 C61 C63 C80 C81 C88
    Date: 2021–09
  33. By: Jaller, Miguel
    Abstract: California has set goals for transitioning the freight sector to near-zero-emission and zero-emission vehicles (ZEVs). California offers several incentive programs to encourage adoption of ZEVs, but purchase decisions are driven by complex factors beyond simple purchase price. Understanding the behaviors and attitudes of freight stakeholders toward ZEVs can inform the design of more effective incentive programs to meet California’s goals. Researchers at the University of California, Davis deployed a stated-preference survey of fleet and carrier companies to collect information about vehicle purchase preferences and how they might be influenced by various incentive programs. This policy brief summarizes the findings from that research and provides policy implications. View the NCST Project Webpage
    Keywords: Social and Behavioral Sciences, Behavior, Forecasting, Freight transportation, Incentives, Market penetration, Surveys, Travel demand, Trucks, Zero emission vehicles
    Date: 2021–09–01
  34. By: Dato, Prudence (University of Basel); Krysiak, Frank C.
    Abstract: Green innovation is a key element in fighting climate change. But there are several challenges that need to be addressed in managing a green technology transition, both in terms of interacting market failures (environmental externality, public good nature of innovation, strategic behaviour of incumbents protecting an emission-intensive technology) and as the structure of the technology market (whether the new technology is offered by a monopolistic incumbent or whether there is some competition induced by market entrants) will evolve throughout the transition. In this paper, we investigate the question what constitutes the optimal policy at different stages of the technology transition and for different market structures. We first analyse a policy mix that can implement a first-best outcome. We show that this mix will differ between different market settings and for different stages of the technology transition. Second, we investigate the choice between a push policy (subsidy for the new technology) and a pull strategy (tax on the old technology) and show that throughout the transition, the policy should be switched, often even more than once. Overall, our results indicate that managing a green technology transition requires a sequence of different policies attuned to the state of the transition and that this sequence differs substantially for different cases, for example, different levels of environmental damage or different cost advantages of the incumbent over entrants.
    Keywords: Policy, Tax, Subsidy, Green Technology, Imperfect Competition, Technology Transition, Innovation, Endogenous Market Structure, Emissions, Climate Change, Environmental Economics.
    JEL: C60 L10 O31 Q54 Q55
    Date: 2021–08–24
  35. By: Pinchbeck, Edward W.; Roth, Sefi; Szumilo, Nikodem; Vanino, Enrico
    Abstract: This paper uses the housing market to examine the costs of indoor air pollution. We focus on radon, a common indoor air pollutant which is the leading cause of lung cancer after smoking. For identification, we exploit a natural experiment whereby a risk map update in England induces exogenous variation in published pollution risk levels. We find a significant negative relationship between changes in published pollution risk levels and residential property prices. Interestingly, we do not find a symmetric effect for decreasing risk. We also show that the update of the risk map led higher socio-economic groups (SEGs) to move away from affected areas, attracting lower SEG residents via lower prices. Finally, we develop a new theoretical framework to account for preference based sorting, which allows us to calculate that the average willingness to pay to avoid the risk of indoor air pollution is 1.6% of a property price.
    Keywords: indoor air pollution; neighbourhood sorting; house prices; risk information; radon
    JEL: R21 Q53 H23
    Date: 2021–09–03
  36. By: Laszlo Bokor (Magyar Nemzeti Bank (Central Bank of Hungary))
    Abstract: I propose a simple indicator of climate-related transition risks of banks’ lending activity based on transaction-level loan data. The underlying idea is that the higher the greenhouse gas intensity of an economic activity (and so a debtor), the higher its transition risk. Recent Hungarian trends of this indicator alerts to significantly regrowing risks.
    Keywords: climate change, transition risk, greenhouse gas intensity, lending activity, risk indicator
    JEL: C43 G21 Q54
    Date: 2021

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