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on Energy Economics |
| By: | Dharik S. Mallapragada; Cristian Junge; Cathy Xun Wang; Johannes Pfeifenberger; Paul L. Joskow; Richard Schmalensee |
| Abstract: | Future electricity systems with tight constraints on carbon emissions will rely much more on wind and solar generation, with zero marginal cost, than today. We use capacity expansion modelling of Texas in 2050 to illustrate wholesale price distributions in future energy-only, carbon-constrained grids without price caps under a range of technology/system assumptions. Tightening carbon emissions constraints dramatically increases the frequency of very low prices. The frequency of high prices also increases, and all resources earn the bulk of their energy market revenues in relatively few hours. The presence of demand response, long-duration energy storage, dispatchable low-carbon generation, or a robust market for hydrogen for non-electricity use (and for energy storage) weakens but does not undo these results. Financial instruments to hedge price volatility will consequently be more costly and it is likely that we will need to redesign capacity remuneration mechanisms to provide adequate incentives for optimal investment in VRE generation and, particularly, storage. In order to encourage economy-wide electrification, the marginal retail price of electricity should be low whenever the wholesale price is low. With automated control of demand via demand response contracts, the risks of price volatility faced by retail customers can be mitigated without sacrificing efficiency. To encourage economy-wide electrification, the marginal retail price of electricity should be low when the wholesale spot price is low. We discuss ways of reducing consumers’ risk in this world while providing adequate investment incentives. |
| JEL: | L11 L51 L94 Q41 Q42 Q49 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29510&r= |
| By: | Shobande, Olatunji; Asongu, Simplice |
| Abstract: | Purpose – This paper provides an analysis of the energy-carbon Kuznets curve hypothesis (CKC) using a second-generation panel methodology. Design/methodology/approach – Specifically, we investigate whether energy consumption, natural resources, and governance explain the CKC proposition. Our empirical strategy is based on the Westerlund panel cointegration test, augmented mean group (AMG), and vector autoregressive (VAR) panel Granger-causality tests. Findings – The results suggest that the CKC hypothesis is incomplete without these mechanisms, as they play a critical role in reducing carbon emissions in Africa. We recommend improving the environmental standards and proper regulatory and monitoring systems to reduce carbon emissions and promote sustainable development in the continent. Originality/value –The study revisits the CKC hypothesis with particular emphasis on governance and more robust empirical estimation techniques. |
| Keywords: | carbon cuts; Energy consumption; Governance; Climate crisis; Panel analysis; Africa |
| JEL: | O1 Q20 Q30 Q50 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:110852&r= |
| By: | Adha, Rishan; Hong, Cheng-Yih; Firmansyah, M.; Paranata, Ade |
| Abstract: | This study aims to estimate the economy-wide rebound effect using the determinants of household energy demand in Indonesia. Identifying the size of the rebound effect is essential for the government's energy efficiency and carbon emission reduction programs. The estimation of the rebound effect uses a two-stage analysis with panel data of every province in Indonesia from 2002 to 2018. We employ the Input Demand Function of the Stochastic Frontier Analysis to measure the energy efficiency of residential aggregate in Indonesia. In the second stage, we adopt the dynamic panel data model to estimate the economy-wide rebound effect. The estimated dynamic panel data model reveals that the magnitudes of the short-run and long-run rebound effects were 87.2% and -45.5%, respectively. In other words, a 1% increase in household energy efficiency results in a reduction in energy consumption of 0.13% in the short term and 1.45% in the long term. Our research also discovers that a backfire rebound effect exists in provinces with high energy efficiency. Therefore, we prove to backfire claims that improving energy efficiency will increase energy use. Henceforth, energy efficiency programs in the household sector still need to be implemented, followed by increasing technological innovation and improving housing policy. |
| Keywords: | Electricity demand, energy efficiency, rebound effect, stochastic frontier analysis |
| JEL: | C23 Q41 Q43 |
| Date: | 2021–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:110444&r= |
| By: | Yves Rannou (CleRMa - Clermont Recherche Management - ESC Clermont-Ferrand - École Supérieure de Commerce (ESC) - Clermont-Ferrand - UCA [2017-2020] - Université Clermont Auvergne [2017-2020], Groupe ESC Clermont); Mohamed Boutabba (Université Paris-Saclay, Univ Evry, EPEE); Pascal Barneto (IAE - IAE BORDEAUX - Université Montesquieu - Bordeaux 4, IRGO - Institut de Recherche en Gestion des Organisations - UB - Université de Bordeaux - Institut d'Administration des Entreprises (IAE) - Bordeaux) |
| Abstract: | This paper studies the interactions between the European carbon and green bond markets from the lens of the European power firms' trading activity over an eight-year period (2013-2020). Those power firms have used two segments of carbon markets differently: one for shortterm hedging and speculative purposes and one for long-term hedging needs. The second one is found to have an informational advantage over the other and complements it. Interestingly, we show that power firms have used the green bond market as a complement to the carbon futures market used for their short-term hedging or speculative activities. Instead, they have employed the green bond market as a substitute for the carbon futures market used for their long-term hedging activities since 2018. Taken together, our results shed light on a pivotal change in the behaviour of European power firms that progressively abandon the carbon market to issue more green bonds in order to finance their transition to clean energy production systems. |
| Keywords: | Carbon Market,Futures Hedging,Green Bond Market,Power firms,Substitute,Complement |
| Date: | 2021–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03435879&r= |
| By: | Mr. Nicolas Arregui; Ian Parry |
| Abstract: | The UK has pledged to cut greenhouse gases 57 percent below 1990 levels by 2030, to be emisisons neutral by 2050, and to phase out internal combustion engine vehicles by 2030. Much progress has been made, but fully achieving these ambitious objectives with the current policy framework will be challenging as it involves multiple and overlapping pricing schemes with significant sectoral differences in carbon prices and may be difficult to scale up on political and administrative grounds. This paper discusses an alternative framework consisting of: (i) a comprehensive carbon price (ideally a tax) rising to at least £60 (US $75) per ton by 2030; and (ii) reinforcing sectoral policies, most importantly feebates for the transport, industrial, and building sectors. This framework could implement mitigation targets, while limiting burdens on households and firms to enhance acceptability, and still raise revenues of 0.8 percent of GDP in 2030. The UK could also leverage its COP26 presidency to promote dialogue on international carbon price floors and pricing of international transport emissions. |
| Keywords: | net-zero;UK climate mitigation;carbon pricing;feebate;international carbon price floor.;WP;emissions price;emission rate;equivalent emissions outcome;emissions intensity;industry emission;transport sector emission; Climate change; international carbon price floor; efficiency cost; waste emission; price uncertainty; consumption emission; fugitive emission; emissions source; Carbon tax; Greenhouse gas emissions; Public expenditure review; Transportation; Global |
| Date: | 2020–12–04 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2020/268&r= |
| By: | Noor Syaifudin (Center for Climate Finance and Multilateral Policy, Fiscal Policy Agency, Ministry of Finance of Republic of Indonesia); Yanrui Wu (Economics Department, Business School, The University of Western Australia) |
| Abstract: | This paper extends the literature on energy sustainability by presenting empirical evidence of the evolution of embodied renewable energy in Indonesia. By employing the environmental input-output analysis, the paper reveals that there was an increasing trend in direct and indirect embodied renewable energy consumption among Indonesia’s 16 industrial sectors. However, the analysis also finds that indirect embodied renewable energy consumption was greater than direct embodied renewable energy use. The findings also show that renewable energy was mainly used to support the manufacturing capacity of various industries. It is surmised that appropriate national regulations and standards should be enacted to promote sustainable energy in Indonesia. The observations in this paper also show that relevant government policies are expected to attract more investment into the Chemical and Other Services as well as Other Industry and Mining sectors as these are the core renewable energy transfer and terminal sectors respectively for the period of observations. |
| Keywords: | Indonesia; sustainable energy; embodied energy; renewable energy; environmental input-output analysis |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:uwa:wpaper:21-18&r= |
| By: | Marc Bohmann (University of Technology Sydney); Vinay Patel (University of Technology Sydney) |
| Abstract: | In Information Leakage in Energy Derivatives around News Announcements, in the Summer 2020 issue of The Journal of Derivatives, authors Marc Bohmann and Vinay Patel (both of the University of Technology Sydney) investigate information leakage in commodity option markets, by taking a close look at abnormal changes in implied volatility spreads and skew that precede price-sensitive news releases. The growth of electronic trading platforms has made it easier to trade commodities, leading to an increase in futures and associated option contracts. These options in turn serve as a venue for information leakage. Focusing on crude oil and natural gas futures, the most highly traded markets on the Chicago Mercantile Exchange (CME), the authors examine the implied volatility (IV) spread and skew. They show an increase in crude oil markets’ IV spread within the five days prior to positive and market-significant news releases, and in their IV skew within the days preceding negative news releases. They also find a statistically significant relationship between these abnormal pre-announcement IV measures and abnormal returns on the date of the official announcement. They report similar results in natural gas markets. These findings are relevant to regulators, investors, and firms in these energy markets, for example, in evaluating whether financial markets work properly. |
| Keywords: | Options |
| Date: | 2021–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:uts:ppaper:2021-3&r= |
| By: | Jeddi, Samir (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)); Lencz, Dominic (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)); Wildgrube, Theresa (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)) |
| Abstract: | Deep decarbonisation requires large-scale irreversible investments throughout the next decade. Policymakers discuss Carbon Contracts for Differences (CCfDs) to incentivise such investments in the industry sector. CCfDs are contracts between a regulator and a firm that pay out the difference between a guaranteed strike price and the actual carbon price per emission reduction generated by an investment of the firm. We develop an analytical model to assess the welfare effects of CCfDs and compare it to other carbon pricing regimes. In our model, a regulator can offer CCfDs to risk-averse firms that decide upon irreversible investments into an emission-free technology in the presence of risk. Risk can originate from the environmental damage or the variable costs of the emission-free technology. We find that a CCfD can be a beneficial policy instrument as it hedges firms’ risk encouraging investments when the firms’ risk aversion would otherwise inhibit this. In contrast to mitigating firms’ risk by committing to a carbon price early on, CCfDs maintain the regulator’s flexibility to adjust the carbon price if new information reveals. However, as CCfDs hedge the firms’ revenues, they might safeguard production with the emission-free technology, even if it is ex-post inefficient. In this case, regulatory flexibility can be welfare superior to offering a CCfD. |
| Keywords: | Climate policy; carbon pricing; risk; Carbon Contracts for Difference |
| JEL: | H23 L51 O31 Q55 Q58 |
| Date: | 2021–11–29 |
| URL: | http://d.repec.org/n?u=RePEc:ris:ewikln:2021_009&r= |
| By: | Jie Xiong (ESSCA - Groupe ESSCA); Shuyan Zhao (Shenzhen Longhua Aiyi School); Yan Meng (Grenoble Ecole de Management); Lu Xu (CleRMa - Clermont Recherche Management - ESC Clermont-Ferrand - École Supérieure de Commerce (ESC) - Clermont-Ferrand - UCA - Université Clermont Auvergne); Seong-Young Kim (ESC Rennes School of Business - ESC Rennes School of Business) |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:hal:gemptp:hal-03469528&r= |
| By: | Christopher Timmins; Ashley Vissing |
| Abstract: | Using a unique combination of datasets and estimation techniques, we test whether private lease negotiations to extract oil and natural gas exhibit features of Coasian efficiency. We demonstrate that measures of wealth (including income, house square footage, and land acreage), typically determinants of willingness to pay for environmental quality, do affect bargaining outcomes. However, race, ethnicity, and language also play important roles after conditioning upon these variables, suggesting an environmental injustice and a breakdown of efficient Coasian bargaining. We further demonstrate that failure to negotiate protections in leases leads to increased risk of future drilling violations, which are not offset by local ordinance restrictions. |
| JEL: | K32 Q40 Q51 Q58 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29487&r= |
| By: | Stefano Ceolotto (Department of Economics, Trinity College Dublin); Eleanor Denny (Department of Economics, Trinity College Dublin) |
| Abstract: | It has been shown that individuals often underinvest in energy efficiency despite net benefits over the longer term. One possible explanation is that agents do not understand and/or cannot interpret energy information when provided in physical units, as in most energy efficiency labels. Prior studies have investigated the effect of reframing energy information reported on energy labels into monetary units. Outcomes are mixed, and it is not clear whether this is due to the use of different products, different methods or because studies were conducted in different countries with different energy prices and labelling standards. This paper overcomes that ambiguity by testing the effect of alternative ways to provide energy consumption information using the same experiment in a multi-country setting. Results show that the specific national context in which an intervention is implemented is a key determinant of its effectiveness. Personalised energy expenditures increase the willingness-to-pay for energy efficiency in the United Kingdom, whereas monetary information has a negative impact in Canada. No significant effect is detected in Ireland and the United States. In addition, it seems that providing monetary information crowds out individuals who would buy a more efficient product for environmental reasons. |
| Keywords: | Energy Efficiency Labels, Discrete Choice Experiment, Tumble dryers, Framing Effect |
| JEL: | Q41 Q48 Q49 D04 D10 D12 D90 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:tcd:tcduee:tep1521&r= |
| By: | Mr. Johannes Wiegand |
| Abstract: | Climate financing and compensation have emerged as key themes in the international climate mitigtion debate. According to one argument in support of compensation, advanced economies (AEs) have used up much of the atmosphere’s absorptive capacity, thus causing global warming and blocking a similar, fossil-fuel driven development path for emerging markets and developing economies (EMDEs). This paper develops a simple model of a sequential, fossil-fuel driven development process to discuss these issues systematically. The results suggest: (i) AEs have typically a stronger interest in climate change mitigation than EMDEs, (ii) from an equity perspective, compensation is called for only if EMDEs are relatively small; (iii) there can also be an efficiency case for compensation, however, with AEs buying EMDEs out of some of their GHG emissions; (iv) ultimately, a superior option—for both the world’s climate and growth prospects—is the development of clean energy technologies by AEs and their transfer to EMDEs. The latter requires strong mitigation efforts by AEs even if EMDEs fail to play along initially. |
| Keywords: | Development, Climate Change, Climate Change Mitigation, Climate Financing |
| Date: | 2021–11–19 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2021/280&r= |
| By: | Gustafsson, Peter (Lund University); Nilsson, Peter (GfK); David, Lucinda (CIRCLE, Lund University); Marañon, Antonia (CIRCLE, Lund University) |
| Abstract: | Sustainability transitions literature is largely missing the point of view of consumers. This is problematic in efforts to understand how sustainable forms of energy diffuses where consumers are understood as active players in embedding energy efficient technologies in their homes. It remains unclear how consumers make energy-relevant decisions and what constitutes this decision-making process. We address this gap by conducting a random experiment asking consumers to make choices regarding solar energy technologies based on a set of options. Options are framed in either a subtractive or additive way to test how consumers process these choices, whether the type of framing matters in encouraging pro-solar energy behavior, and which solar technologies are preferred. We hypothesize that subtractive framing of energy-relevant choices leads to more options being selected than additive framing, that the type of option framing matters in shaping consumer preferences, and that the framing affects the transition probabilities in the decision-making process. Results show that consumers are susceptible to option framing when making energy-relevant decisions. Respondents were concerned primarily with costs when options were framed additively but exhibited decision difficulties and more pro-solar energy transition behavior when options were framed subtractively. This paper demonstrates the sequential steps in decision-making under subtractive framing, which induces a willingness in consumers to embed more solar energy technologies into their households despite the cost, as opposed to additive framing. This paper contributes a representation of the cognitive process of energy relevant decision-making, empirical evidence on the potentiality of nudging consumers towards more pro-solar energy transition behavior, and the importance of framing tools in encouraging this behavior. |
| Keywords: | additive and subtractive option framing; experimental design; Markov chain; final state distribution; transition probability; distance from initial model; anchoring |
| JEL: | C12 C93 D12 D81 |
| Date: | 2021–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2021_014&r= |
| By: | Nicolo Barbieri (Department of Economics and Management, University of Ferrara, Ferrara, Italy); Alberto Marzucchi (Gran Sasso Science Institute, Social Sciences, L’Aquila, Italy); Ugo Rizzo (Department of Mathematics and Computer Science, University of Ferrara, Ferrara, Italy) |
| Abstract: | The present study explores the technological complementarities between green and non green inventions. First, we look at whether inventive activities in climate-friendly domains de pend on patenting in related technological domains that are not green. Based on patent data filed over the 1978–2014 period, we estimate a spatial autoregressive model using co-occurrence matrices to capture technological interdependencies. Our first finding highlights that the develop ment of green technologies strongly relies on advances in other green and in particular non-green technological domains, whose relevance for the green economy is usually neglected. Building on this insight, we detect the non-green complementary technologies that co-occur with green ones and assess whether environmental policies affect this particular instantiation of technologies at the country level. The results of the instrumental variable approach confirm that while envi ronmental policies spur green patenting, they do not displace the development of the non-green technological pillars upon which green inventions develop. |
| Keywords: | Green technology, patent data, environmental policy, network-dependent innovation |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:sru:ssewps:2021-08&r= |
| By: | Fakhri Hasanov; Leila Dagher (King Abdullah Petroleum Studies and Research Center) |
| Abstract: | There is no commodity whose interlinkages with the macroeconomy have been studied as extensively as oil, starting with Hamilton’s (1983) seminal study. Thousands of subsequent studies have examined the relationship between oil prices and various economic variables, including the stock market. This strand of the literature began with the pioneering work of Kling (1985). Since then, other financial markets, such as banking, have also received a fair share of analysis. |
| Keywords: | Agent Based Modeling, Oil Market, Macroeconomics |
| Date: | 2021–11–23 |
| URL: | http://d.repec.org/n?u=RePEc:prc:dpaper:ks--2021-dp018&r= |
| By: | Joseph S. Shapiro |
| Abstract: | This article proposes and evaluates four hypotheses about US pollution and environmental policy over the last half century. First, air and water pollution have declined substantially, although greenhouse gas emissions have not. Second, environmental policy explains a large share of these trends. Third, much of the regulation of air and drinking water pollution has benefits that exceed costs, although the evidence for surface water pollution regulation is less clear. Fourth, while the distribution of pollution across social groups is unequal, market-based environmental policies and command-and-control policies do not appear to produce systematically different distributions of environmental outcomes. I also discuss recent innovations in methods and data that can be used to evaluate pollution trends and policies, including the increased use of environmental administrative data, statistical cost-benefit comparisons, analysis of previously understudied policies, more sophisticated analyses of pollution transport, micro-macro frameworks, and a focus on the distribution of environmental outcomes. |
| JEL: | H23 Q50 Q52 R11 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29478&r= |
| By: | Ali Hortaçsu; Isabelle Perrigne |
| Abstract: | The empirical analysis of auction data has become a thriving field of research over the past thirty years. Relying on sophisticated models and advanced econometric methods, it addresses a wide range of policy questions for both public and private institutions. This chapter offers a guide to the literature by stressing how data features and policy questions have shaped research in the field. The chapter is organized by types of goods for sale and covers auctions of timber, construction and services procurement, oil and gas leases, online auctions, internet advertising, electricity, financial securities, spectrum, as well as used goods. It discusses the idiosyncrasies of each applied setting and the respective empirical findings. |
| JEL: | G2 L11 L4 L71 L73 L74 L86 L94 L96 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29511&r= |
| By: | Farag, Markos (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)); Zaki, Chahir (Cairo University, Faculty of Economics and Political Science) |
| Abstract: | This paper aims to analyze the determinants of trade in natural gas through a political economy lens. Indeed, in addition to the economic determinants of trading in natural gas, the latter could be affected by political determinants such as the economic sanctions and the institutional gap between the trading partners. Moreover, while the literature considers the effect of tariffs, less attention has been attributed to non-tariff measures (NTMs) that might also be imposed for political reasons. To quantify the impact of these different determinants on natural gas trade, we use a gravity model that explains bilateral trade for pipeline natural gas (PNG) and liquefied natural gas (LNG) over the period 2000-2017. We also consider the zero trade flows of natural gas by using the Poisson Pseudo Maximum Likelihood estimator. Our results show that economic sanctions have reduced bilateral LNG trade by 24%, on average. We also find that the institutional gap between trading partners exerts a significant negative effect on bilateral PNG and LNG trade, pointing out that institutions could be considered as fixed export costs in the natural gas market. Moreover, our results indicate that, in addition to tariffs, non-tariff measures have a significant negative effect on trade in natural gas. |
| Keywords: | Natural gas; gravity model; institutions; economic sanctions |
| JEL: | C55 F14 Q34 Q35 Q43 |
| Date: | 2021–11–29 |
| URL: | http://d.repec.org/n?u=RePEc:ris:ewikln:2021_008&r= |
| By: | Francesco Vona (French Economic Observatory) |
| Abstract: | This paper reviews the literature on the distributional effects of environmental and climate policies, focusing on ex-post empirical evidence. It decomposes the distributional effects into the main dimensions to understand which policy packages are more likely to achieve a triple dividend of environmental effectiveness, economic efficiency and equity. This paper also takes stock of the related literature on the political acceptability of environmental policies to assess proposals of compensation policy packages, including green recovery plans, environmental tax reforms and progressive subsidies to green technologies. |
| Keywords: | distributional analysis, environmental policy, inequality |
| JEL: | D30 H22 H23 Q52 |
| Date: | 2021–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:oec:envaaa:188-en&r= |
| By: | Nicholas Apergis (Department of Banking and Financial Management, University of Piraeus, Karaoli & Dimitriou 80, 18534, Piraeus, Greece); Konstantinos Gavriilidis (Stirling Management School, University of Stirling, FK9 4LA, Stirling, UK); Rangan Gupta (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa) |
| Abstract: | This study examines whether climate policy uncertainty affects the propensity of people to travel. To do so, we employ the Climate Policy Uncertainty (CPU) index and US air travel data to eight regional overseas destinations for the period 2000-2019. Using time-varying causality tests to deal with the structural breaks that exist in the relationship between CPU and US air travel, we find that CPU is a major determinant of air-travel demand to all destinations examined. The results are robust when we control for macroeconomic factors, uncertainty and geopolitical risks. The findings have important implications for destination countries and tourism professionals. |
| Keywords: | Climate policy uncertainty, CPU index, air travel destinations, US, structural breaks, time-varying causality test |
| JEL: | C32 C51 L8 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:202186&r= |
| By: | Rafael Wildauer; Stuart Leitch; Jakob Kapeller |
| Abstract: | This policy study asks to what extent large-scale public investment efforts could be a viable tool to provide the necessary infrastructure to break Europe’s dependency on fossil fuel and carbon emissions more broadly. We estimate semi-structural VAR models for the EU27. These are used to study the impact of permanent as well as 5-year long public investment programmes. Three key findings emerge: First, government investment multipliers for the EU27 are large and range from 5.12 to 5.25. Second, debt-to-GDP ratios are likely to fall in response to the strong economic impulse generated by additional public investment spending. The study therefore classifies additional public investment spending in the EU27 as sustainable fiscal policy. Third, single country investment initiatives will likely lead to smaller economic expansions when compared to coordinated EU-wide investment, due to Europe’s strong intra-member state trade flows. A coordinated approach to fiscal policy is thus substantially more effective not only when it comes to delivering network-dependent infrastructure (rail, grid) but also with respect to the economic stimulus it creates. |
| Keywords: | Green fiscal policy, public debt sustainability |
| JEL: | E62 H63 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:pke:wpaper:pkwp2121&r= |
| By: | Angela Köppl; Stefan Schleicher (WIFO); Margit Schratzenstaller |
| Abstract: | In dem am 3. Oktober 2021 vorgestellten Steuerreformpaket der österreichischen Bundesregierung ("Ökosoziale Steuerreform") wird mit der Bepreisung von CO 2 ein neues Werkzeug im Mix der wirtschaftspolitischen Instrumente verfügbar, dessen Design und Wirkung allerdings noch mit vielen Unsicherheiten verbunden sind. Mit dieser Bepreisung von Treibhausgasen folgt Österreich einer sowohl in Europa als auch global immer stärker werdenden Tendenz. Dieses Instrument soll Anreize für die Restrukturierung des Wirtschafts- und Lebensstils setzen, die nicht nur den Klimawandel eindämmen helfen, sondern auch Wohlstand, Resilienz und Wettbewerbsfähigkeit stärken. |
| Date: | 2021–11–23 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:rbrief:y:2021:i:13&r= |
| By: | Stern, Nicholas |
| Abstract: | In this paper, Nicholas Stern argues that the COVID-19 and climate crises, and the weaknesses that produced them, should be tackled together and that the response must be a new sustainable, resilient and inclusive approach to growth and development. The paper explores relevant policies and actions and then turns to the changes to economics necessary to pursue these ideas and imperatives. The core finding of The Economics of Climate Change: The Stern Review – that the costs of inaction on climate change are much greater than the costs of action – was compelling when the Review was published in 2006; 15 years on it is even stronger. While greenhouse gas emissions have continued to rise and the impacts of climate change have manifested faster and with greater intensity than expected, the costs of clean energy technologies have been falling further and more quickly than anticipated. Any reasonable estimate of the costs of inaction would be still higher now, and the costs of action lower, than in 2006. The deeper understanding of the problem that we now have, the paper argues, implies that we must shift the focus of our economic analyses towards the dynamics of change, the fostering of investment and innovation necessary, the management of disruption, and the great opportunities that lie in a new form of development. |
| JEL: | J1 |
| Date: | 2021–10–26 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:112802&r= |
| By: | Stern, Nicholas |
| Abstract: | In this paper, Nicholas Stern argues that the COVID-19 and climate crises, and the weaknesses that produced them, should be tackled together and that the response must be a new sustainable, resilient and inclusive approach to growth and development. The paper explores relevant policies and actions and then turns to the changes to economics necessary to pursue these ideas and imperatives. The core finding of The Economics of Climate Change: The Stern Review – that the costs of inaction on climate change are much greater than the costs of action – was compelling when the Review was published in 2006; 15 years on it is even stronger. While greenhouse gas emissions have continued to rise and the impacts of climate change have manifested faster and with greater intensity than expected, the costs of clean energy technologies have been falling further and more quickly than anticipated. Any reasonable estimate of the costs of inaction would be still higher now, and the costs of action lower, than in 2006. The deeper understanding of the problem that we now have, the paper argues, implies that we must shift the focus of our economic analyses towards the dynamics of change, the fostering of investment and innovation necessary, the management of disruption, and the great opportunities that lie in a new form of development. |
| JEL: | J1 |
| Date: | 2021–10–26 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:112808&r= |
| By: | Lionel Fontagné (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Erica Perego; Gianluca Santoni |
| Abstract: | Pandemics, global warming, food security, ageing, depletion of certain raw materials... Our economies are confronted with global problems, calling for the long term and raising intergenerational questions. To guide economic policies, it is therefore essential to have a coherent framework for thinking. The MaGE (Macroeconometrics of the Global Economy) model, developed by CEPII, makes it possible to draw the basic trends of the world economy up to 2050. If we assume that the current growth and technological catch-up dynamics will continue, and taking into account demographic dynamics, the balance of economic power will be strongly transformed over the next generation. Above all, energy consumption is expected to continue to grow at a sustained rate, up to a doubling, despite efforts to improve energy efficiency. Ambitious policies to decarbonise our economies will then be necessary to make the prospects for economic growth sustainable. |
| Abstract: | Pandémies, réchauffement climatique, sécurité alimentaire, vieillissement, épuisement de certaines matières premières… Nos économies sont confrontées à des problèmes globaux, convoquant le long terme et posant des questions intergénérationnelles. Pour guider les politiques économiques, il est dès lors indispensable de disposer d'un cadre de réflexion cohérent. Le modèle MaGE (pour Macroeconometrics of the Global Economy), développé par le CEPII, permet de dessiner les tendances de fond de l'économie mondiale à l'horizon 2050. Si l'on suppose que les dynamiques de croissance et de rattrapage technologique actuelles vont se poursuivre, et compte tenu des dynamiques démographiques, l'équilibre des puissances économiques sera fortement transformé au cours de la génération à venir. Surtout, la consommation d'énergie devrait continuer de croître à un rythme soutenu jusqu'à doubler, en dépit des efforts en matière d'efficience énergétique. Des politiques ambitieuses de décarbonation de nos économies seront alors nécessaires pour rendre soutenables les perspectives de croissance économique. |
| Keywords: | Growth models,Long-term growth,Economic projections,Energy consumption,Modèles de croissance,Croissance à long-terme,Projections économiques,Consommation d'énergie |
| Date: | 2021–11–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03436070&r= |
| By: | Rodier, Caroline PhD; Harold, Brian |
| Abstract: | In rural areas, cost-effective transit service is challenging to provide due to greater travel distances, lower population densities, and longer travel times than in cities. Access to a personal car is often essential to the quality of life for most residents, enabling them to readily access essential services. However, keeping one or two vehicles in reliable working order can be prohibitively expensive for low-income families. To address this issue, multiple organizations partnered to launch an electric vehicle (EV) carsharing pilot called Míocar in 2019. This non-profit service in the rural San Joaquin Valley of California differs from the dominant carsharing model of for-profit businesses serving affluent communities that already have high-quality transit. Míocar seeks to provide carsharing to price-sensitive populations with low transit access at a price point that is more affordable than owning a personal vehicle. The service currently has 27 EVs located at eight hubs throughout the San Joaquin Valley. |
| Keywords: | Engineering |
| Date: | 2021–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsdav:qt1dp793rs&r= |
| By: | Elizabeth Asiedu; Théophile Azomahou; Neepa Gaekwad; Mahamady Ouedraogo (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne) |
| Abstract: | According to the World Bank Enterprises Survey data (WBES), electricity is one of the top constraints to business operations in developing countries. Data from 108 developing countries between 2006 and 2017 show that about 13.6 percent of firms report electricity as the top constraint they face in their activities. This makes electricity the second most important constraint, the first being access to finance (15.2% of firms surveyed). Particularly, in Sub-Saharan Africa (24.53%) and South Asia (23.54%), access to electricity is the first constraint to business development, ahead of political instability and access to finance. |
| Abstract: | Selon les données de la Banque Mondiale (WBES), les entreprises des pays en développement citent l'électricité comme l'une des principales contraintes qui entravent leurs activités. Les données de 108 pays en développement entre 2006 et 2017 montrent qu'environ 13,6 % des entreprises déclarent l'électricité comme étant le principal obstacle auquel elles sont confrontées dans leurs activités. Cela fait de l'électricité la deuxième contrainte la plus importante, la première étant l'accès au financement (15,2% des entreprises interrogées). En Afrique subsaharienne (24,53%) et en Asie du Sud (23,54%, l'accès à l'électricité est cité comme la première entrave au développement des activités des entreprises, devant l'instabilité politique et l'accès au financement. |
| Keywords: | Developing countries,Electricity,Contraintes,Pays en dévelopement |
| Date: | 2021–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03460767&r= |
| By: | Mats P. Kahl (Leuphana University of Lüneburg) |
| Abstract: | Competition on the German gasoline market is of interest for economists, competition authorities and the general public alike. In this paper, I analyse how constantly lower gasoline prices in Poland affect the prices set in the German border region. More precisely, I estimate the impact of one additional kilometre of distance to the nearest Polish competitor on the price charged by German gasoline stations. The analysis is based on a complete dataset of German gasoline prices and an accurate assessment of distances. Fitting random effects models for German gasoline prices while controlling for various station characteristics, I find no evidence suggesting that German gasoline stations enter into price competition with their Polish opponents. The analysis of gasoline station infrastructure in the German border region reveals increasingly sparse gasoline station density when approaching the Polish border, along with an increasing share of premium brands. On the one hand, I find evidence suggesting that price competition between German and Polish gasoline stations is dominated by the enormous tax differences that presumably exceed profit margins by far; on the other hand, I reveal the consequences on the market structure that are caused by German gasoline stations anticipating this permanent difference in taxes when deciding upon where to locate their gasoline stations. |
| Keywords: | gasoline market, cross-border competition, market transparency |
| JEL: | L13 L41 L92 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:392&r= |
| By: | Antonin Pottier (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); Marc Fleurbaey (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CNRS - Centre National de la Recherche Scientifique); Aurélie Méjean (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); Stéphane Zuber (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | We develop a model of population dynamics accounting for the impact of climate change on mortality through ve channels (heat, diarrhoeal disease, malaria, dengue, undernutrition). An age-dependent mortality, which depends on global temperature increase, is introduced and calibrated. We consider three climate scenarios (RCP 6.0, RCP 4.5 and RCP 2.6) and find that the five risks induce deaths in the range from 135,000 per annum (in the near term) to 280,000 per annum (at the end of the century) in the RCP 6.0 scenario. We examine the number of life-years lost due to the five selected risks and find figures ranging from 4 to 9 million annually. These numbers are too low to impact the aggregate dynamics but they have interesting evolution patterns. The number of life-years lost is constant (RCP 6.0) or decreases over time (RCP 4.5 and RCP 2.6). For the RCP 4.5 and RCP 2.6 scenarios, we find that the number of life-years lost is higher today than in 2100, due to improvements in generic mortality conditions, the bias of those improvements towards the young, and an ageing population. From that perspective, the present generation is found to bear the brunt of the considered climate change impacts. |
| Keywords: | Mortality risk,Integrated assessment model,Endogenous population,Impacts,Climate change |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:hal:pseptp:halshs-03048602&r= |
| By: | Christoph Kleineberg (Leuphana University of Lüneburg) |
| Abstract: | The geographical definition of markets is a crucial challenge for economists. With the availability of multiple tools to compare prices, the idea of market definition is entering a new era as it infiltrates the digital sphere. Since December 1st, 2013 the market transparency unit of the Federal German Cartel Office is forwarding all prices, for every gasoline type, at every gasoline station in Germany at all times, through consumer information services to consumers by the means of websites or smartphone apps. Gasoline is a perfectly homogenous product as there is no alternative for its consumption by car, bus or truck drivers in the short or medium run. The availability of price data allows us to study what premiums drivers are willing to pay in order to avoid search costs or additional driving distances. The research question is how prices of highway gasoline stations are dependent upon prices offered by street gasoline stations in the vicinity, and what additional price customers are willing to pay to avoid searching for another gasoline station away from the highway. Results indicate that there is a premium of 10 to 11 cents per litre throughout the day and 15 cents per litre in the evening on gasoline sold by stations on the highway. When checked for robustness, results indicate that the pricing behavior of gasoline stations differ depending on the particular market environment. There is no uniform pricing behavior of highway gasoline stations. Some highway gasoline station are setting their prices independently from the gasoline stations in the vicinity, other are acting like regular gasoline stations and do not even charge an additional premium. Furthermore, a high frequency of traffic on highways leads to lower prices whereas a high population density leads to higher prices. |
| Keywords: | market definition, applied economics, pricing patterns, gasoline market |
| JEL: | D03 D40 L11 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:389&r= |
| By: | Gözlügöl, Alperen A. |
| Abstract: | Climate change is one of the highest-ranking issues on the political and social agenda. Vulnerabilities of the world ecosystem laid bare by the COVID-19 pandemic and the potential damage for the human and business life made the need for urgent action clear once again. Corporations are one of the main actors that will play a major role in the decarbonisation of the economy. They need to put forward a net zero strategy and targets, transitioning to net-zero by 2050. Yet, an important but rather overlooked stakeholder group in the sustainability debates can pose a significant stumbling block in this transition: employees. Although climate action has huge benefits by ameliorating adverse environmental events and is expected to have overall positive impact on employment, net zero transition in companies, especially in certain sectors and regions, will cause substantial adverse employment effects for the workforce. This has the potential to slow down or even derail the necessary climate action in companies. In this regard, just transition is a promising concept, which calls for a swift and decisive climate action in corporations while taking account of and mitigating adverse effects for their workforce. If well implemented, it can accelerate net zero transition in companies. This potential clash of environmental (E) and social (S) aspects of ESG agenda, materialised in the companies' net zero transition, and its potential remedy, just transition, have important implications for corporate governance and finance, especially for directors' duties & executive remuneration, sustainability disclosures, institutional investors' engagement and green finance. |
| Keywords: | ESG,climate change,corporate governance,employees,green finance,institutional investors,net zero transition,sustainability,workforce |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:lawfin:25&r= |
| By: | Ngarava, Saul |
| Keywords: | Resource /Energy Economics and Policy, Agribusiness |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae21:315359&r= |
| By: | Porteous, Obie |
| Keywords: | International Relations/Trade, Agricultural and Food Policy |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae21:315028&r= |
| By: | Yanyou Chen; James W. Roberts; Christopher D. Timmins; Ashley Vissing |
| Abstract: | We analyze mortgage lenders’ behavior with respect to shale gas risk during the period of the U.S. shale gas boom, which coincided with fluctuations in the U.S. housing market and increased scrutiny in the lending industry. Shale gas operations have the potential to place affected houses into technical default such that government sponsored enterprises like Fannie Mae and Freddie Mac are unable to maintain them in their portfolios. We find that lenders changed from being willing to pay $814 on average to avoid one unit of shale risk before the financial distress of 2008 and subsequent increased scrutiny, to $3,137, or 1.6% of profit earned on an average mortgage, afterwards. Our approach provides an alternative to the traditional property value hedonic measurement of the disamenities associated with shale gas development by looking at the decisions of mortgage professionals. |
| JEL: | G21 Q35 Q51 Q53 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29494&r= |
| By: | Giacomo Battiston (Free University of Bozen-Bolzano); Matteo Bizzarri (University of Naples Federico II and CSEF.); Riccardo Franceschin (Sabanci University) |
| Abstract: | Resource wealth induces predation incentives but also conflict-deterring third-party involvement. This makes the relation between resource value and conflict probability a priori unclear. This paper studies such relation with a flexible theoretical framework involving a resource holder, a predator, and a powerful third party. First, we show that under general assumptions the theoretical relation between conflict probability is hump-shaped as a function of resource value. Second, we theoretically establish that resource value increases the third party’s incentive to side with the resource-rich defendant in case of intervention, reinforcing its stabilizing role. Third, exploiting widely-used measures of resource value and geologic predictors of oil presence, we provide evidence for our theoretical results. Using data on military bases and arms’ trade, we show suggestive evidence such non-monotonicity is driven by areas exposed to US influence. |
| Keywords: | conflict, resource curse, third party, oil, intervention. |
| JEL: | D74 Q38 P48 |
| Date: | 2021–12–03 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:631&r= |
| By: | Miao, Yumeng; Ou, Carol (Tilburg University, School of Economics and Management); Du, Rong |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiutis:f19a203f-abb6-4835-9c34-224bfd8b9507&r= |
| By: | Anibal Sanjab; H\'el\`ene Le Cadre; Yuting Mou |
| Abstract: | In this paper, a transmission-distribution systems flexibility market is introduced, in which system operators (SOs) jointly procure flexibility from different systems to meet their needs (balancing and congestion management) using a common market. This common market is, then, formulated as a cooperative game aiming at identifying a stable and efficient split of costs of the jointly procured flexibility among the participating SOs to incentivize their cooperation. The non-emptiness of the core of this game is then mathematically proven, implying the stability of the game and the naturally-arising incentive for cooperation among the SOs. Several cost allocation mechanisms are then introduced, while characterizing their mathematical properties. Numerical results focusing on an interconnected system (composed of the IEEE 14-bus transmission system and the Matpower 18-bus, 69-bus, and 141-bus distributions systems) showcase the cooperation-induced reduction in system-wide flexibility procurement costs, and identifies the varying costs borne by different SOs under various cost allocations methods. |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2111.12830&r= |
| By: | Van Roosebeke, Bert; Defina, Ryan |
| Abstract: | Whereas research regarding the impact of climate change on the global financial system is ever growing, the impact of climate change and risks related therewith on deposit insurance has remained largely undealt with in literature. As global financial standard-setters have set the treatment of climate risks high on the agenda , this Policy Brief represents the first attempt to identify five core challenges that climate change may pose to the activity of deposit insurers and their ability to deliver on key objectives. The paper also classifies the challenges as to their risk-nature as well as to their directness, urgency and the feasibility of deposit insurers’ to respond to them. Given the novel nature of these issues as well as the high uncertainty and long time horizon inherent to them, the discussion here is by no means meant to be exhaustive. It is also recognised that the scale and degree to which climate change affects deposit insurers may vary significantly. This may be so due to differences in mandates or geographical exposure to climate risks. Nevertheless, the breath and scope of climate change-related risks as well as financial standard-setters’ omnipresent activities in the field make this topic of strategic interest to the deposit insurance community. The links between these challenges and the IADI Core Principles underscores the strategic urgency of this contemporary policy issue. |
| Keywords: | deposit insurance; bank resolution; climate change |
| JEL: | G21 G33 Q54 |
| Date: | 2021–10–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:110715&r= |