nep-ene New Economics Papers
on Energy Economics
Issue of 2022‒03‒07
sixty papers chosen by
Roger Fouquet
London School of Economics

  1. Unilateral CO2 Reduction Policy with More Than One Carbon Energy Source By Julien Daubanes; Fanny Henriet; Katheline Schubert
  2. Exploring the contribution of energy price to carbon emissions in African countries By Bamanga Umar; Md. Mahmudul Alam; Abul Quasem Al-Amin
  3. Renewable entry costs, project finance and the role of revenue quality in Australia’s National Electricity Market By Nicholas Gohdes; Paul Simshauser
  4. Incentive regulation, productivity growth and environmental effects: the case of electricity networks in Great Britain By Victor Ajayi; Karim Anaya; Michael Pollitt
  5. Optimising VRE plant capacity in Renewable Energy Zones By Paul Simshauser; Farhad Billimoria; Craig Rogers
  6. Are EU Climate and Energy Package 20-20-20 targets achievable and compatible? Evidence from the impact of renewables on electricity prices By Juan Ignacio Pe\~na; Rosa Rodriguez
  7. Rooftop solar PV and the peak load problem in the NEM’s Queensland region By Paul Simshauser
  8. An evaluation of a local reactive power market: the case of Power Potential By Karim Anaya; Michael Pollitt
  9. Contract design in electricity markets with high penetration of renewables: A two-stage approach By Arega Getaneh Abate; Rossana Riccardi; Carlos Ruiz
  10. Are economists getting climate dynamics right and does it matter? By Dietz, Simon; van der Ploeg, Frederick; Rezai, Armon; Venmans, Frank
  11. Digital finance, development and climate change By Sébastien GALANTI; Ҫiğdem Yilmaz ӦZSOY
  12. Scaling Up CSP: How Long Will It Take? By Lilliestam, Johan; Du, Fengli; Gilmanova, Alina; Mehos, Mark; Wang, Zhifeng; Thonig, Richard
  13. Global economic crisis, energy use, CO2 emissions, and policy roadmap amid COVID-19 By Most Asikha Aktar; Md. Mahmudul Alam; Abul Al-Amin
  14. Exploring air pollution and its solutions in developing countries By Hanh, Ha Thi Hong
  15. Where next for the electricity distribution system operator? Evidence from a survey of European DSOs and National Regulatory Authorities By Karim Anaya; Monica Giulietti; Michael Pollitt
  16. Decarbonized energies and the wealth of three European nations: a comparative nexus study using Granger and Toda-Yamamoto approaches By Simionescu, Mihaela; Schneider, Nicolas; Gavurova, Beata
  17. Double trouble: concurrently targeting water and electricity using normative messages in the Middle East By Ramli, Ukasha; Laffan, Kate
  18. The effect of climate policy on innovation and economic performance along the supply chain: A firm- and sector-level analysis By Antoine Dechezleprêtre; Tobias Kruse
  19. The Levelised Cost of Frequency Control Ancillary Services in Australia’s National Electricity Market By Joel Gilmore; Tahlia Nolan; Paul Simshauser
  20. Return and volatility spillovers between Chinese and US clean energy related stocks By Karel Janda; Ladislav Kristoufek; Binyi Zhang
  21. A Stochastic Discrete Choice Dynamic Programming Model of Power Plant Operations and Retirement By Çam, Eren; Hinkel, Niklas; Schönfisch, Max
  22. Fuel consumption elasticities, rebound effect and feebate effectiveness in the Indian and Chinese new car markets By Prateek Bansal; Rubal Dua
  23. Innovation and industrial policies for green hydrogen By Emile Cammeraat; Antoine Dechezleprêtre; Guy Lalanne
  24. Business Models for Peer-to-Peer Energy Trading in Germany Based on Households’ Beliefs and Preferences By Karami, Mahdi; Madlener, Reinhard
  25. Risk transmission between green markets and commodities By Muhammad Abubakr Naeem; Sitara Karim; Tooraj Jamasb; Rabindra Nepal
  26. Prospects and contradictions of the electrification of the European automotive industry: the role of European Union policy By Tommaso Pardi
  27. Minimax-Regret Climate Policy with Deep Uncertainty in Climate Modeling and Intergenerational Discounting By Stephen J. DeCanio; Charles F. Manski; Alan H. Sanstad
  28. Environmental News Emotion and Air Pollution in China By Sébastien Marchand; Damien Cubizol; Elda Nasho Ah-Pine; Huanxiu Guo
  29. Air Quality and Suicide By Persico, Claudia L; Marcotte, Dave E.
  30. A hybrid deep learning approach for purchasing strategy of carbon emission rights -- Based on Shanghai pilot market By Jiayue Xu
  31. Whose climate intervention? Solar geoengineering, fractions of capital, and hegemonic strategy By Surprise, Kevin; Sapinski, Jean Philippe
  32. How giant discoveries of natural resources impact sovereign debt ratings in developing and emerging countries ? By Regina Seri
  33. CLIMATE CHANGE AND ENERGY SECURITY By Duong, Cong Thuy; Duong, Nguyen Cam; Dung, Nguyen Tan; Chuc, Hoang Thi Hong; Chi, Nguyen Hoang; Dung, Doan Thu; Chi, Vu Quynh; Chi, Hoang Thi Linh; , Le Thi Thanh Diem; Dương, Phan Thùy
  34. People-centric Emission Reduction in Buildings: A Data-driven and Network Topology-based Investigation By Ramit Debnath; Ronita Bardhan; Kamiar Mohaddes; Darshil U Shah; Michael H. Ramage
  35. Default Supply Auctions in Electricity Markets: Challenges and Proposals By Juan Ignacio Pe\~na; Rosa Rodriguez
  36. How to distinguish climate sceptics, antivaxxers, and persistent sceptics: Evidence from a multi-country survey of public attitudes By Zeynep Clulow; David Reiner
  37. Wind, water and wires: evaluating joint wind and interconnector capacity expansions in hydro-rich regions By Newbery, D.
  38. Einstellungen und Verhalten mittelständischer Unternehmen angesichts des Klimawandels By Dienes, Christian; Butkowski, Olivier K.; Holz, Michael; Korus, Arthur; Wolter, Hans-Jürgen
  39. Time-zero Efficiency of European Power Derivatives Markets By Juan Ignacio Pe\~na; Rosa Rodriguez
  40. 40 Years of Dutch Disease Literature: Lessons for Developing Countries By Edouard Mien; M Goujon
  41. Multi-unit Double Auctions: Equilibrium Analysis and Bidding Strategy using DDPG in Smart-grids By Sanjay Chandlekar; Easwar Subramanian; Sanjay Bhat; Praveen Paruchuri; Sujit Gujar
  42. Environmental services and market power By Damien Sans; Sonia Schwartz; Hubert Stahn
  43. The Future of Wood - towards circular bioeconomy By Hetemäki, Lauri; Nasi, Robert; Palahi, Marc; Cerutti, Paolo; Mausch, Kai
  45. Update and extension of the When2Heat dataset By Ruhnau, Oliver; Muessel, Jarusch
  46. Determinants of Urbanization in Pakistan: Empirical evidence from ARDL model By Sakib, S M Nazmuz
  47. La infraestructura en Colombia : balance, prospectiva y recomendaciones en TIC, electricidad, gas y transporte By Juan Benavides
  48. La transición energética y los retos del sector energético en Colombia, 2020-2030 By Astrid Martínez Ortiz
  49. Income and expenditure elasticity of household carbon footprints. Some methodological considerations By Petra Zsuzsa Lévay; Tim Goedemé; Gerlinde Verbist
  50. Mobility in the Advent of Autonomous Driving – Toward an Understanding of User Acceptance and Quality Perception Factors By Wiefel, Jennifer
  51. When digital mass participation meets citizen deliberation: Combining mini-publics and maxi-publics in climate policy-making By Itten, Anatol; Mouter, Niek
  52. Sustainable Finance: Eine Chance für Mitbestimmung? By Leuchters, Maxi
  53. Tail Risk of Electricity Futures By Juan Ignacio Pe\~na; Rosa Rodriguez; Silvia Mayoral
  54. How to foster climate innovation in the European Union: Insights from the EIB Online Survey on Climate Innovation By Delanote, Julie; Rückert, Désirée
  55. Climate Change and Fiscal Sustainability: Risks and Opportunities By Agarwala, M.; Burke, M.; Klusak, P.; Mohaddes, K.; Volz, U.; Zenghelis, D.
  56. Les modèles intégrés économie-climat : quels usages pour quelles décisions ? By Jean-Charles Hourcade; Peter Tankov; Stéphane Voisin; F. Ghersi; Julien Lefèvre
  57. The financial behavior of households with climate change By Nandrasa Tiava
  58. Free-Riding for Future: Field Experimental Evidence of Strategic Substitutability in Climate Protest By Jarke-Neuert, Johannes; Perino, Grischa; Schwickert, Henrike
  59. The Environment, Life Expectancy and Growth in Overlapping Generations Models: A Survey By Dugan, Anna; Prskawetz, Alexia; Raffin, Natacha
  60. Radiophobia - useful concept or ostracising term? By Lindberg, John C. H.; Archer, Denali

  1. By: Julien Daubanes (UNIGE - Université de Genève); Fanny Henriet (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Katheline Schubert (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: We examine an open economy's strategy to reduce its carbon emissions by replacing its consumption of coal—very carbon intensive—with gas—less so. Unlike the standard theoretical approach to carbon leakage, we show that unilateral CO2 reduction policies generate a higher leakage rate in the presence of more than one carbon energy source and may turn counterproductive, ultimately increasing world emissions. We establish testable conditions as to whether a unilateral tax on domestic CO2 emissions increases the domestic exploitation of gas and whether such a strategy increases global emissions. We also characterize this strategy's implications for climate policy in the rest of the world. Finally, we present an illustrative application of our results to the United States.
    Keywords: unilateral climate policy,carbon emission reduction,shale gas,gas-coal substitution,coal exports,carbon leakage,US policy,counter-productive policy
    Date: 2021
  2. By: Bamanga Umar (Modibbo Adama University of Technology); Md. Mahmudul Alam (UUM - Universiti Utara Malaysia); Abul Quasem Al-Amin (University of Waterloo [Waterloo])
    Abstract: The increasing level of greenhouse gas carbon emission currently exacerbates the devastating effect of global warming on the Earth's ecosystem. Energy usage is one of the most important determinants that is increasing the amount of carbon gases being released. Simultaneously, the level of energy usage is derived by the price and therefore, this study examines the contribution of energy price to carbon gas emissions in thirteen African nations for the period spanning 1990 to 2017. It does this by utilizing the Cross-sectional Dependence (CD), Augmented Mean Group (AMG) and Pooled Mean Group (PMG) panel modelling methods. The findings of the AMG model suggest that a 1% increase in energy price leads to a 0.02% decerease in carbon emission. The results further reveal that a 1% increase in energy intensity and technological innovation lead to 0.04% and 3.65% increase in carbon emission, respectively, in the selected African countries. Findings will help policymakers to implement effective energy price policies to reduce carbon emissions and achieve sustainable development goals especially in the emerging economies of Africa.
    Keywords: Africa,Energy price,Carbon emissions,Augmented mean group,Pooled Mean Group (PMG),Cross-sectional Dependence (CD),Sustainable development
    Date: 2021–01
  3. By: Nicholas Gohdes (Queensland University of Technology); Paul Simshauser (Griffith Business School, Griffith University)
    Keywords: Renewable Energy, PPAs, Project Finance, Counterparty Credit, Cost of Capital
    JEL: D25 D80 G32 L51 Q41
    Date: 2022–01
  4. By: Victor Ajayi (EPRG, CJBS, University of Cambridge); Karim Anaya (EPRG, CJBS, University of Cambridge); Michael Pollitt (EPRG, CJBS, University of Cambridge)
    Keywords: Total factor productivity, incentive regulation, electricity networks, emissions
    JEL: D24 H23 L43 L94
    Date: 2021–11
  5. By: Paul Simshauser (Griffith Business School, Griffith University); Farhad Billimoria (Energy & Power Group); Craig Rogers (King & Wood Mallesons)
    Keywords: Renewable Energy Zones, renewable generation, transmission investment
    JEL: D25 D80 G32 L51 Q41
    Date: 2021–09
  6. By: Juan Ignacio Pe\~na; Rosa Rodriguez
    Abstract: This paper studies the realizability and compatibility of the three CEP2020 targets, focusing on electricity prices. We study the impact of renewables and other fundamental determinants on wholesale and household retail electricity prices in ten EU countries from 2008 to 2016. Increases in production from renewables decrease wholesale electricity prices in all countries. As decreases in prices should promote consumption, an apparent contradiction emerges between the target of an increase in renewables and the target of a reduction in consumption. However, the impact of renewables on the non-energy part of household wholesale electricity prices is positive in six countries. Therefore, decreases in wholesale prices, that may compromise the CEP2020 target of decrease in consumption, do not necessarily translate into lower household retail prices.
    Date: 2022–02
  7. By: Paul Simshauser (Griffith Business School, Griffith University)
    Keywords: rooftop solar PV, renewables, power generation, energy-only markets, peak load problem
    JEL: D25 D80 G32 L51 Q41
    Date: 2021–11
  8. By: Karim Anaya (EPRG, CJBS, University of Cambridge); Michael Pollitt (EPRG, CJBS, University of Cambridge)
    Keywords: reactive power, social cost benefit analysis, distributed energy resources, ancillary services procurement
    JEL: D44 D47 L94 Q40
    Date: 2021–10
  9. By: Arega Getaneh Abate; Rossana Riccardi; Carlos Ruiz
    Abstract: The interplay between risk aversion and financial derivatives has received increasing attention since the advent of electricity market liberalization. One important challenge in this context is how to develop economically efficient and cost-effective models to integrate renewable energy sources (RES) in the electricity market, which constitutes a relatively new and exciting field of research. This paper proposes a game-theoretical equilibrium model that characterizes the interactions between oligopolistic generators in a two-stage electricity market under the presence of high RES penetration. Given conventional generators with generation cost uncertainty and renewable generators with intermittent and stochastic capacity, we consider a single futures contract market that is cleared prior to a spot market where the energy delivery takes place. We introduce physical and financial contracts to evaluate their performance assess their impact on the electricity market outcomes and examine how these depend on the level of RES penetration. Since market participants are usually risk-averse, a coherent risk measure is introduced to deal with both risk-neutral and risk-averse generators. We derive analytical relationships between contracts, study the implications of uncertainties, test the performance of the proposed equilibrium model and its main properties through numerical examples. Our results show that overall electricity prices, generation costs, profits, and quantities for conventional generators decrease, whereas quantities and profits for RES generators increase with RES penetration. Hence, both physical and financial contracts efficiently mitigate the impact of uncertainties and help the integration of RES into the electricity system.
    Date: 2022–01
  10. By: Dietz, Simon; van der Ploeg, Frederick; Rezai, Armon; Venmans, Frank
    Abstract: We show that economic models of climate change produce climate dynamics inconsistent with current climate science models: (i) the delay between CO2 emissions and warming is much too long and (ii) positive carbon cycle feedbacks are mostly absent. These inconsistencies lead to biased economic policy advice. Controlling for how the economy is represented, different climate models result in significantly different optimal CO2 emissions. A long delay between emissions and warming leads to optimal carbon prices that are too low and attaches too much importance to the discount rate. Similarly we find that omitting positive carbon cycle feedbacks leads to optimal carbon prices that are too low. We conclude it is important for policy purposes to bring economic models in line with the state of the art in climate science and we make practical suggestions for how to do so.
    Keywords: carbon cycle; carbon price; climate change; integrated assessment modelling; positive feedbacks; social cost of carbon
    JEL: Q54
    Date: 2021–09–01
  11. By: Sébastien GALANTI; Ҫiğdem Yilmaz ӦZSOY
    Keywords: , , CO2, climate change, economic development, growth, Africa, energy, digital finance, mobile money, cryptocurrency
    Date: 2022
  12. By: Lilliestam, Johan; Du, Fengli; Gilmanova, Alina; Mehos, Mark; Wang, Zhifeng; Thonig, Richard
    Abstract: Concentrating solar power (CSP) is one of the few scalable technologies capable of delivering dispatchable renewable power and, as such, many expect it to shoulder a significant share of system balancing in a renewable electricity future power by cheap, intermittent PV and wind power: the IEA, for example, projects 73 GW CSP by 2030 and several hundred GW by 2050 in its Net-Zero by 2050 pathway. In this paper, we assess how fast CSP can be expected to scale up and how long time it would take to get new, high-efficiency CSP technologies to market, based on observed trends and historical patterns. We find that to meaningfully contribute to net-zero pathways the CSP sector needs to reach and exceed the maximum historical annual growth rate of 30%/year last seen between 2010-2014 and maintain it for at least two decades. Any CSP deployment in the 2020s will rely mostly on mature existing technologies, namely parabolic trough and molten-salt towers, but likely with adapted business models such as hybrid CSP-PV stations, combining the advantages of higher-cost dispatchability and low-cost intermittency. New third-generation CSP designs are unlikely to play a role in markets during the 2020s, as they are still at or before the pilot stage and, judging from past pilot-to-market cycles for CSP, they will likely not be ready for market deployment before 2030. CSP can contribute to low-cost zero-emission energy systems by 2050, but to make that happen, at the scale foreseen in current energy models, ambitious technology-specific policy support is necessary, as soon as possible and in several countries.
    Date: 2021–10–28
  13. By: Most Asikha Aktar (Comilla University); Md. Mahmudul Alam (UUM - Universiti Utara Malaysia); Abul Al-Amin (University of Waterloo [Waterloo])
    Abstract: The COVID-19 pandemic has emerged as one of the deadliest infectious diseases on the planet. Millions of people and businesses have been placed in lockdown where the main aim is to stop the spread of the virus. As an extreme phenomenon, the lockdown has triggered a global economic shock at an alarming pace, conveying sharp recessions for many countries. In the meantime, the lockdowns caused by the COVID-19 pandemic have drastically changed energy consumption patterns and reduced CO2 emissions throughout the world. Recent data released by the International Monetary Fund and International Energy Agency for 2020 further forecast that emissions will rebound in 2021. Still, the full impact of COVID-19 in terms of how long the crisis will be and how the consumption pattern of energy and the associated levels of CO2 emissions will be affected are unclear. This review aims to steer policymakers and governments of nations toward a better direction by providing a broad and convincing overview on the observed and likely impacts of the pandemic of COVID-19 on the world economy, world energy demand, and world energy-related CO2 emissions that may well emerge in the next few years. Indeed, given that immediate policy responses are required with equal urgency to address three things—pandemic, economic downturn, and climate crisis. This study outlines policy suggestions that can be used during these uncertain times as a guide
    Keywords: Economic Crisis,Energy Use,CO2 Emissions,Climate Change,Policy,COVID19
    Date: 2021
  14. By: Hanh, Ha Thi Hong
    Abstract: Exploring air pollution and its solutions in developing countries
    Date: 2022–01–17
  15. By: Karim Anaya (EPRG, CJBS, University of Cambridge); Monica Giulietti (Loughborough University); Michael Pollitt (EPRG, CJBS, University of Cambridge)
    Keywords: distribution system operator, DSO, Electricity Regulation
    JEL: L94 L21
    Date: 2022–01
  16. By: Simionescu, Mihaela; Schneider, Nicolas; Gavurova, Beata
    Abstract: Considering the actual debate nuclear vs renewable that divides the green transition of the EU member states, this paper investigates the dynamic interactions between two sources of decarbonized energy (renewables and nuclear) and economic growth for three distinct economies: France, Spain, and Germany, all differing in their respective long-run nuclear planning. A complex methodological framework is employed to consider stationary (Augmented Dickey-Fuller test, Phillips-Perron test, Dickey-Fuller test, Elliott-Rothenberg-Stock test, Kwiatkowski-Phillips-Schmidt-Shin test, Zivot and Andrews test with structural break), cointegration (Johansen and Juselius test of cointegration, Gregory and Hansen cointegration test with breaks based on regime-trend shifts), long-run convergence (Vector Error Correction Model), causality (Granger causality test, Toda-Yamamoto non-causality test, and variance analysis (Impulse Response Functions) Empirical results for the period 1983–2019 fail to support the existence of statistical causality between renewable energy use and economic growth in France and Spain, which is congruent with the “neutral hypothesis”. Besides, while a weak one-way link is revealed from renewable energy use to GDP in Germany only, economic growth is found to substantially trigger nuclear energy consumption in Spain but not vice versa, thus corroborating the “growth hypothesis”. Accordingly, country-specific insights are provided to deploy low-carbon sectoral facilities in Spain, enhance the channels of radioactive waste treatment in France, and secure the nuclear phase-out in Germany.
    Keywords: cointegration; economic growth; Granger causality; nuclear energy consumption; Toda-Yamamoto causality
    JEL: N0
    Date: 2022–01–17
  17. By: Ramli, Ukasha; Laffan, Kate
    Abstract: Personalised normative messages have been shown to be effective at encouraging both electricity and separately water savings. As use of this approach to promote resource savings becomes increasingly widespread, an important question is whether providing such feedback on consumption of the two resources together can yield reductions in both areas. In a field experiment with over 200,000 households in the Middle East, we send households personalised normative messages regarding both their water and electricity consumption on a monthly basis. This intervention saw a statistically significant reduction of around 1.2% for electricity but not for water consumption. Furthermore, we test different ways of concurrently presenting normative messages of both water and energy, including presenting it as a combined eco score. Local treatment effects of these were around 1.2% reduction. Our findings contribute towards nexus thinking around how (not) to concurrently achieve energy and water savings using normative feedback.
    Keywords: eco-feedback; energy usage; pro-environmental; social norms; water usage
    JEL: L81
    Date: 2022–06–01
  18. By: Antoine Dechezleprêtre (OECD); Tobias Kruse (OECD)
    Abstract: The paper empirically assesses the effect of climate policy stringency on innovation and economic performance, both directly on regulated sectors and indirectly through supply chain relationships. The analysis is based on a combination of firm- and sector-level data, covering 19 countries and the period from 1990 to 2015. The paper shows that climate policies are effective at inducing innovation in low-carbon technologies in directly regulated sectors. It does not find evidence that climate policies induce significant innovation along the supply chain. In addition, there is no evidence that climate policies – through the channel of clean innovation – either harm or improve the economic performance of regulated firms. This supports the evidence that past climate policies have not been major burdens on firms’ competitiveness, and that clean innovation may enable firms to compensate for the potential costs implied by new environmental regulations.
    Keywords: Firm performance, Low carbon innovation, Policy evaluation, Porter Hypothesis
    JEL: Q55 Q58 O38 L25
    Date: 2022–02–15
  19. By: Joel Gilmore (Centre for Applied Energy Economics & Policy Research, Griffith University); Tahlia Nolan (Iberdrola Australia); Paul Simshauser (Griffith Business School, Griffith University)
    Keywords: Frequency control ancillary services, electricity markets, battery storage
    JEL: D25 D80 G32 L51 Q41
    Date: 2022–01
  20. By: Karel Janda; Ladislav Kristoufek; Binyi Zhang
    Abstract: This paper aims to empirically investigate the dynamic connectedness between oil prices and stock returns of clean energy-related and technology companies in China and U.S. financial markets. We apply three multivariate GARCH model specifications (CCC, DCC and ADCC) to investigate the return and volatility spillovers among price and return series. We use rolling window analysis to forecast out-of-sample one-step-ahead dynamic conditional correlations and time-varying optimal hedge ratios. Our results suggest that Invesco China Technology ETF (CQQQ) is the best asset to hedge Chinese clean energy stocks followed by WTI, ECO, and PSE. Our results are reasonably robust to the choice of different model refits and forecast length of rolling window analysis. Our empirical findings provide investors and policymakers with the systematic understanding of return and volatility connectedness between China and U.S. clean energy stock markets.
    Keywords: Clean energy, Hedge effectiveness, Rolling window analysis
    JEL: C22 G11 Q41
    Date: 2022–02
  21. By: Çam, Eren (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)); Hinkel, Niklas (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)); Schönfisch, Max (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI))
    Abstract: We present a methodology to estimate fixed cost parameters relevant to the decision to operate, mothball or retire an open-cycle gas turbine (OCGT) using a dynamic discrete choice model, based on fuel and electricity prices, as well as technical data and the operational status of OCGTs in the PJM market area. With operational and mothballed OCGTs, we find for both, age of the power plant and plant vintage statistically significant positive correlations with the fixed operation and maintenance (O&M) costs. We also show a statistically significant negative relationship between the installed capacity and the fixed O&M costs, confirming that an increase in scale results in lower specific costs. The estimated fixed O&M cost parameters for an operational OCGT vary from 15.3 USD/kW/yr for new, large, high-efficiency units, to 50.8 USD/kW/yr for older, small, low-efficiency units. Mothballing a plant reduces these costs by 75% to 95%, depending on plant vintage and size. Decommissioning an OCGT was found to be cash flow negative, which means that the associated cost exceeds any scrap value the equipment may have on secondary markets. Our estimated cost parameters depend on operational status, capacity, vintage, and age of a generation unit. This differentiation is valuable for a better understanding of costs in the context of competition policy. It would also allow for a more realistic parameterisation of power market models. Using the estimates and market data, we also compute the probabilities of operating, mothballing or retiring an OCGT. Sensitivity analyses regarding changes in prices of capacity, electricity, and natural gas reveal that the operating decisions for OCGTs are significantly affected by the profitability potential, most notably by electricity prices.
    Keywords: Dynamic discrete choice models; electricity markets; fixed cost estimation; maximum likelihood estimation; open-cycle gas turbine (OCGT)
    JEL: C61 D24 L94
    Date: 2022–02–14
  22. By: Prateek Bansal; Rubal Dua
    Abstract: China and India, the world's two most populous developing economies, are also among the world's largest automotive markets and carbon emitters. To reduce carbon emissions from the passenger car sector, both countries have considered various policy levers affecting fuel prices, car prices and fuel economy. This study estimates the responsiveness of new car buyers in China and India to such policy levers and drivers including income. Furthermore, we estimate the potential for rebound effect and the effectiveness of a feebate policy. To accomplish this, we developed a joint discrete-continuous model of car choice and usage based on revealed preference survey data from approximately 8000 new car buyers from India and China who purchased cars in 2016-17. Conditional on buying a new car, the fuel consumption in both markets is found to be relatively unresponsive to fuel price and income, with magnitudes of elasticity estimates ranging from 0.12 to 0.15. For both markets, the mean segment-level direct elasticities of fuel consumption relative to car price and fuel economy range from 0.57 to 0.65. The rebound effect on fuel savings due to cost-free fuel economy improvement is found to be 17.1% for India and 18.8% for China. A revenue-neutral feebate policy, with average rebates and fees of up to around 15% of the retail price, resulted in fuel savings of around 0.7% for both markets. While the feebate policy's rebound effect is low - 7.3% for India and 1.6% for China - it does not appear to be an effective fuel conservation policy.
    Date: 2022–01
  23. By: Emile Cammeraat (OECD); Antoine Dechezleprêtre (OECD); Guy Lalanne (OECD)
    Abstract: This paper examines the current development of hydrogen technology in the manufacturing sector and the industrial policies enacted to support it across countries. In addition to continued R&D efforts, governments can already lay the ground for the deployment of green hydrogen by implementing five types of policies: 1) supporting R&D and demonstration for green hydrogen to bring down the cost of electrolysers and make them competitive; 2) increasing the supply of renewable electricity; 3) reducing the cost gap between green hydrogen and brown technologies through a comprehensive policy package, such as carbon pricing and the phasing out of inefficient fossil fuel subsidies; 4) reducing uncertainty, for instance by promoting international standardisation, hydrogen infrastructure, and sound regulatory standards; and 5) considering blue hydrogen as a short-term option to facilitate the transition to green hydrogen.
    Date: 2022–02–23
  24. By: Karami, Mahdi (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))
    Abstract: With the expansion of distributed energy resources and the phaseout of the feed-in-tariff scheme in Germany, self-consumption and electricity sharing within a community of prosumers are becoming more profitable. This paper derives optimal business models for a sustainable peer-to-peer (P2P) energy trading platform (ETP) in Germany. It examines data from 1618 residential households collected from an online survey, including 1311 consumers and 307 prosumers. Our research aims to better understand under what circumstances these households would participate in a P2P ETP and how business models can support such platforms to create added value for private households. Therefore, households’ beliefs concerning their attitudes, perceived behavioral control, and subjective norms are analyzed according to the Theory of Planned Behavior, and business models are designed correspondingly. In order to evaluate the developed business models’ effectiveness and usefulness, we apply them to fifteen existing pioneer energy communities and platforms in Germany. We find that cost-saving and other financial benefits for households must be considered to be the primary value proposition offered by a service provider. Business models which help households to become more electricity self-sufficient and to consume less electricity from the public grid are the second-most important source of value creation from a household’s point of view. By connecting the business models and the P2P prosuming market model, recommendations for companies, policy-makers, and regulatory authorities are made.
    Keywords: Electricity suppliers; business model innovation; value creation; private customers; electricity self-sufficient
    JEL: M10 M11 M13
    Date: 2021–03
  25. By: Muhammad Abubakr Naeem; Sitara Karim; Tooraj Jamasb; Rabindra Nepal
    Abstract: The current study examines the risk transmission between green markets and commodities spanning 3 January 2011 to 20 June 2021. We use two novel methodologies of volatility transmission using dynamic conditional correlation (DCC-GARCH) and the other time-varying parameters vector autoregression (TVP-VAR) technique of connectedness. We found parallel results of risk transmission between green markets and commodities using these measures of connectedness. Results demonstrate that green markets and commodities form a weakly knitted sphere of connectedness where intra-group clustering dominates the inter-group connectedness. Clean energy markets and precious metals form two distinct groups of connectedness for respective markets. However, crude oil, natural gas and wheat remained indifferent to the shocks highlighting their potential to serve as diversifiers due to their low risk bearing features. Further, time-varying dynamics emphasize the occurrence of sizable events that disrupted the operations of green and commodity markets, accentuating the attention of investors, portfolio managers, and financial market participants. Intense spillovers shaped the overall connectedness of the network where green markets (commodities) are fashioned in positive (negative) risk spillovers. Finally, we propose recommendations for policymakers, regulators, investors, portfolio managers, and market participants to devise policies and investment goals to shield their investments from unexpected circumstances.
    Keywords: Green markets, Commodities, DCC-GARCH, TVP-VAR, Volatility transmission
    JEL: G10 G11 G19 Q01
    Date: 2022–02
  26. By: Tommaso Pardi (IDHES - Institutions et Dynamiques Historiques de l'Économie et de la Société - ENS Paris Saclay - Ecole Normale Supérieure Paris-Saclay - UEVE - Université d'Évry-Val-d'Essonne - CNRS - Centre National de la Recherche Scientifique - UPN - Université Paris Nanterre - UP8 - Université Paris 8 Vincennes-Saint-Denis - UP1 - Université Paris 1 Panthéon-Sorbonne)
    Abstract: The article analyses the role that the EU regulatory framework for the reduction of CO2 emissions in the transport sector has played during the last twenty years in moving the industry away from what it was supposed to do: reduce weight, mass and size of the cars sold to make them less polluting. It shows that the current race towards electrification can be seen as the result of this paradox. It argues that under the ongoing upmarket drift in new car sales the social, economic and political costs of electrification increase, while its environmental benefits decrease.
    Keywords: Automotive engineering,CO2 emissions,Electric utilities,Environmental benefits,European Union policy,management,Regulatory frameworks,Transport sectors
    Date: 2021
  27. By: Stephen J. DeCanio; Charles F. Manski; Alan H. Sanstad
    Abstract: Integrated assessment models have become the primary tools for comparing climate policies that seek to reduce greenhouse gas emissions. Policy comparisons have often been performed by considering a planner who seeks to make optimal trade-offs between the costs of carbon abatement and the economic damages from climate change. The planning problem has been formalized as one of optimal control, the objective being to minimize the total costs of abatement and damages over a time horizon. Studying climate policy as a control problem presumes that a planner knows enough to make optimization feasible, but physical and economic uncertainties abound. Earlier, Manski, Sanstad, and DeCanio proposed and studied use of the minimax-regret (MMR) decision criterion to account for deep uncertainty in climate modeling. Here we study choice of climate policy that minimizes maximum regret with deep uncertainty regarding both the correct climate model and the appropriate time discount rate to use in intergenerational assessment of policy consequences. The analysis specifies a range of discount rates to express both empirical and normative uncertainty about the appropriate rate. The findings regarding climate policy are novel and informative. The MMR analysis points to use of a relatively low discount rate of 0.02 for climate policy. The MMR decision rule keeps the maximum future temperature increase below 2C above the 1900-10 level for most of the parameter values used to weight costs and damages.
    Date: 2022–01
  28. By: Sébastien Marchand (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne); Damien Cubizol (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne); Elda Nasho Ah-Pine (CleRMa - Clermont Recherche Management - ESC Clermont-Ferrand - École Supérieure de Commerce (ESC) - Clermont-Ferrand - UCA - Université Clermont Auvergne); Huanxiu Guo (The Institute of Economics and Finance - Nanjing Audit University)
    Abstract: In 2013, the Chinese central government launched a war on air pollution. As a new and major source of information, the Internet plays an important role in diffusing environmental news emotion and shaping people's perceptions and emotions regarding the pollution. How could the government make use of the environmental news emotion as an informal regulation of pollution? The paper investigates the causal relationship between web news emotion (defined by the emotional tone of web news) and air pollution (SO2, NO2, PM2.5 and PM10) by exploiting the central government's war on air pollution. We combine daily monitoring data of air pollution at different levels (cities and counties, respectively the second and third administrative levels in China) with the GDELT database that allows us to have information on Chinese web news media (e.g. emotional tone of web news on air pollution). We find that a decrease of the emotional tone in web news (i.e. more negative emotions in the articles) can help to reduce air pollution at both city and county level. We attribute this effect to the context of China's war on air pollution in which the government makes use of the environmental news emotion as an informal regulation of pollution.
    Keywords: News emotion,Air pollution,Mass media,The internet,Government,China
    Date: 2021–11
  29. By: Persico, Claudia L (American University); Marcotte, Dave E. (American University)
    Abstract: Though there is clinical evidence linking pollution induced inflammatory factors and major depression and suicide, no definitive study of risk in the community exists. In this study, we provide the first population-based estimates of the relationship between air pollution and suicide in the United States. Using detailed cause of death data from all death certificates in the U.S. between 2003 and 2010, we estimate the relationship between daily variation in air quality measured using NASA satellite data, and suicide rates. Using wind direction as an instrument for reducing potentially endogeneity and measurement error in daily pollution exposure, we find that a 1 μg/m3 increase in daily PM2.5 is associated with a 0.49 percent increase in daily suicides (a 19.3 percent increase). We also estimate the impact of days with high air pollution on contemporaneous suicide rates compared to other days in the same state-month, month-year, day of the week and county with lower air pollution, conditional on the same weather and total population. Estimates using 2SLS are larger and more robust, suggesting a bias towards zero arising from measurement error. Event study estimates further illustrate that contemporaneous pollution exposure matters more than exposure to pollution in previous weeks.
    Keywords: air pollution, suicide, health
    JEL: I10 Q52 Q53
    Date: 2022–02
  30. By: Jiayue Xu
    Abstract: The price of carbon emission rights play a crucial role in carbon trading markets. Therefore, accurate prediction of the price is critical. Taking the Shanghai pilot market as an example, this paper attempted to design a carbon emission purchasing strategy for enterprises, and establish a carbon emission price prediction model to help them reduce the purchasing cost. To make predictions more precise, we built a hybrid deep learning model by embedding Generalized Autoregressive Conditional Heteroskedastic (GARCH) into the Gate Recurrent Unit (GRU) model, and compared the performance with those of other models. Then, based on the Iceberg Order Theory and the predicted price, we proposed the purchasing strategy of carbon emission rights. As a result, the prediction errors of the GARCH-GRU model with a 5-day sliding time window were the minimum values of all six models. And in the simulation, the purchasing strategy based on the GARCH-GRU model was executed with the least cost as well. The carbon emission purchasing strategy constructed by the hybrid deep learning method can accurately send out timing signals, and help enterprises reduce the purchasing cost of carbon emission permits.
    Date: 2022–01
  31. By: Surprise, Kevin; Sapinski, Jean Philippe (Université de Moncton)
    Abstract: Proposals for slowing climate change by reflecting sunlight back to space, known as solar geoengineering (SG), are gaining traction in climate policy. Given SG’s capacity to slow warming without reducing carbon emissions, prominent criticism suggests that it will enable fossil fueled business-as-usual. This assessment is not without merit, yet the primary funders of SG research do not emanate from fossil capital. We analyze sources of funding for SG research, finding close ties to financial and technological capital as well as a number of billionaire philanthropists. These corporate sectors and associated philanthropies comprise part of “climate capital” – the fraction of the capitalist class aligned with climate action. We argue that SG is being positioned as a tactic for enabling incremental, market-driven decarbonization, explore key institutions advocating this approach in US climate policy, and conclude that SG is poised to serve as a tool for class compromise between fossil and climate capital.
    Date: 2021–12–16
  32. By: Regina Seri (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne)
    Abstract: This paper sheds light on the effects of giant discoveries of natural resources (oil natural gas, minerals) on sovereign debt ratings in the short and long run. To do so, it employs 28 developing and emerging countries over the period 1990-2014 and applies a random effect ordered Probit model on different sets of samples. It shows evidence of the differentiated effects (positive and negative) of giant discoveries on ratings. These differentiated effects are linked to the behavior of macroeconomic and political indicators resulting from the actions and policies taken in the aftermath of the discoveries. It also finds evidence of the learning effects of giant discoveries in countries with increasing sovereign debt ratings. What seems to matter is not only the resources but also how governments respond to the news of the discovery of those resources. Therefore, taking the right actions and policies will help countries to prevent a deterioration of their financial conditions.
    Keywords: Giant discoveries,Natural resources,Sovereign debt ratings,Developing countries,Random effect ordered response models
    Date: 2021–02
  33. By: Duong, Cong Thuy; Duong, Nguyen Cam; Dung, Nguyen Tan; Chuc, Hoang Thi Hong; Chi, Nguyen Hoang; Dung, Doan Thu; Chi, Vu Quynh; Chi, Hoang Thi Linh; , Le Thi Thanh Diem; Dương, Phan Thùy
    Abstract: Protecting the green - clean - beautiful living environment is a matter of concern for the whole world. There are many global or regional conferences held to discuss and find a way to solve that problem. In which, climate change, energy depletion and greenhouse effect are hot issues, this is one of the great challenges for all mankind because they are directly affecting ecology. environment and human life.
    Date: 2022–01–19
  34. By: Ramit Debnath (Department of Architecture, University of Cambridge); Ronita Bardhan (Department of Architecture, University of Cambridge); Kamiar Mohaddes (EPRG, CJBS, University of Cambridge); Darshil U Shah (Department of Architecture, University of Cambridge); Michael H. Ramage (Department of Architecture, University of Cambridge)
    Keywords: Emission, climate change, building, computational social science, people-centric transition, Twitter
    JEL: C63 Q54
    Date: 2022–01
  35. By: Juan Ignacio Pe\~na; Rosa Rodriguez
    Abstract: This paper studies premiums got by winning bidders in default supply auctions, and speculation and hedging activities in power derivatives markets in dates near auctions. Data includes fifty-six auction prices from 2007 to 2013, those of CESUR in the Spanish OMEL electricity market, and those of Basic Generation Service auctions (PJM-BGS) in New Jersey's PJM market. Winning bidders got an average ex-post yearly forward premium of 7% (CESUR) and 38% (PJM-BGS). The premium using an index of futures prices is 1.08% (CESUR) and 24% (PJM-BGS). Ex-post forward premium is negatively related to the number of bidders and spot price volatility. In CESUR, hedging-driven trading in power derivatives markets predominates around auction dates, but in PJM-BGS, speculation-driven trading prevails.
    Date: 2022–02
  36. By: Zeynep Clulow (EPRG, CJBS, University of Cambridge); David Reiner (EPRG, CJBS, University of Cambridge)
    Keywords: climate scepticism, anti-vaccine, public perceptions, trust, COVID-19
    JEL: I12 I18 Q54 Q58
    Date: 2022–01
  37. By: Newbery, D.
    Abstract: Countries or regions with a high share of storage hydro and good renewables resources may be able to interconnect to less well-endowed neighbours. To maximise joint benefits, coordinating interconnector and renewables investment is desirable. Suitable long-term contracts ensure that beneficiaries pay and jointly cover the highly dispersed costs and benefits. The article develops a simple model calibrated for Tasmania that demonstrates how this can be quantified and various counterfactuals tested. The key to the simplification is that the value of water is both stable over time and the key driver of outcomes. The economic attraction of proposed wind and interconnector investment depends sensitively on the value placed on CO2 reductions.
    Keywords: Hydro-storage, wind, interconnectors, carbon benefits
    JEL: D47 D61 F18 H23 Q25 Q42
    Date: 2022–02–17
  38. By: Dienes, Christian; Butkowski, Olivier K.; Holz, Michael; Korus, Arthur; Wolter, Hans-Jürgen
    Abstract: Unabhängig von ihrer Größe engagieren sich viele Unternehmen aufgrund ihrer eigenen Werthaltung gegen den Klimawandel. Zusätzliche Marktchancen bringen jedoch nur wenige Unternehmen mit dem Klimawandel in Verbindung. Stattdessen nehmen insbesondere kleine Unternehmen die zusätzliche Kostenbelastung wahr. Die 'klimafreundliche" Grundeinstellung vieler Mittelständler manifestiert sich auch in konkreten Handlungen: Mehr als die Hälfte aller Unternehmen haben in der Vergangenheit bereits umweltrelevante Innovationen durchgeführt. Während die Großunternehmen aufgrund ihrer Ressourcenvorteile mehr innovieren als KMU, erleichtert die Einheit von Eigentum und Leitung im Mittelstand die Umsetzung von Umweltaktivitäten. Eine spezifische Förderung von Umweltinnovationen ist aufgrund von den zu erwartenden Mitnahmeeffekten problematisch. Sinnvoll wäre es stattdessen, auf flexible umweltpolitische Instrumente zu setzen. Neben marktwirtschaftlichen Lösungen wie Emissionshandels-systemen oder einer CO2-Bepreisung bieten sich hierfür informelle Instrumente an.
    Keywords: Klimawandel-Einstellung,Umweltinnovation,Ressourceneffizienz,Climate change attitude,Environmental innovation,Resource efficiency
    JEL: Q55 L21
    Date: 2021
  39. By: Juan Ignacio Pe\~na; Rosa Rodriguez
    Abstract: We study time-zero efficiency of electricity derivatives markets. By time-zero efficiency is meant a sequence of prices of derivatives contracts having the same underlying asset but different times to maturity which implies that prices comply with a set of efficiency conditions that prevent profitable time-zero arbitrage opportunities. We investigate whether statistical tests, based on the law of one price, and trading rules, based on price differentials and no-arbitrage violations, are useful for assessing time-zero efficiency. We apply tests and trading rules to daily data of three European power markets: Germany, France and Spain. In the case of the German market, after considering liquidity availability and transaction costs, results are not inconsistent with time-zero efficiency. However, in the case of the French and Spanish markets, limitations in liquidity and representativeness are challenges that prevent definite conclusions. Liquidity in French and Spanish markets should improve by using pricing and marketing incentives. These incentives should attract more participants into the electricity derivatives exchanges and should encourage them to settle OTC trades in clearinghouses. Publication of statistics on prices, volumes and open interest per type of participant should be promoted.
    Date: 2022–02
  40. By: Edouard Mien (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne); M Goujon (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne)
    Abstract: This paper surveys the literature on the "Dutch disease" caused by natural resources revenues in developing countries. It describes the original model of Dutch disease and some important extensions proposed in the theoretical literature, focusing on the ones that meet the developing countries' conditions. It then reviews the main empirical studies that have been conducted since the 1980s, aiming to understand the methodological issues and to highlight the current gaps in the literature. There is evidence that the Dutch disease is still a topical issue for many developing countries, particularly in Africa. However, there remains large gaps in the theoretical and empirical literature in the understanding of the most adequate policy instruments to cope with, specifically in the least developed countries that are new producers of commodities.
    Keywords: Dutch disease,Natural resources,Resource curse,Structural transformations,Real exchange rate
    Date: 2021–06
  41. By: Sanjay Chandlekar; Easwar Subramanian; Sanjay Bhat; Praveen Paruchuri; Sujit Gujar
    Abstract: Periodic double auctions (PDA) have applications in many areas such as in e-commerce, intra-day equity markets, and day-ahead energy markets in smart-grids. While the trades accomplished using PDAs are worth trillions of dollars, finding a reliable bidding strategy in such auctions is still a challenge as it requires the consideration of future auctions. A participating buyer in a PDA has to design its bidding strategy by planning for current and future auctions. Many equilibrium-based bidding strategies proposed are complex to use in real-time. In the current exposition, we propose a scale-based bidding strategy for buyers participating in PDA. We first present an equilibrium analysis for single-buyer single-seller multi-unit single-shot k-Double auctions. Specifically, we analyze the situation when a seller and a buyer trade two identical units of quantity in a double auction where both the buyer and the seller deploy a simple, scale-based bidding strategy. The equilibrium analysis becomes intractable as the number of participants increases. To be useful in more complex settings such as wholesale markets in smart-grids, we model equilibrium bidding strategy as a learning problem. We develop a deep deterministic policy gradient (DDPG) based learning strategy, DDPGBBS, for a participating agent in PDAs to suggest an action at any auction instance. DDPGBBS, which empirically follows the obtained theoretical equilibrium, is easily extendable when the number of buyers/sellers increases. We take Power Trading Agent Competition's (PowerTAC) wholesale market PDA as a testbed to evaluate our novel bidding strategy. We benchmark our DDPG based strategy against several baselines and state-of-the-art bidding strategies of the PowerTAC wholesale market PDA and demonstrate the efficacy of DDPGBBS against several benchmarked strategies.
    Date: 2022–01
  42. By: Damien Sans; Sonia Schwartz (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne); Hubert Stahn
    Abstract: The market for environmental goods and services is booming. It enables firms to reduce their polluting emissions and comply with environmental policies. However, this sector is highly concentrated. While the economic literature has established the optimal environmental policy in this context, it considers environmental goods and not environmental services. Considering this point, it is shown that a first-best environmental policy can be implemented by public authorities despite the market power in the eco-industry.
    Abstract: Le marché des biens et services environnementaux est en plein essor. Il permet aux entreprises de réduire leurs émissions polluantes et de se mettre en conformité vis-à-vis des politiques environnementales. Toutefois, ce secteur est fortement concentré. Si la littérature économique a établi la politique environnementale optimale dans ce contexte, elle considère les biens et non pas les services environnementaux. Considérant ce point, il est montré qu'une politique environnementale de premier rang peut être mise en œuvre par les pouvoirs publics malgré le pouvoir de marché dans l'éco-industrie.
    Keywords: Politique environnementale,Environnement
    Date: 2020–03
  43. By: Hetemäki, Lauri; Nasi, Robert; Palahi, Marc; Cerutti, Paolo; Mausch, Kai (World Agroforestry (ICRAF))
    Abstract: In summary, there are great opportunities to better use wood as a non-fossil fuel-based raw materials and tackle climate change, as well as to achieve Sustainable Development Goals. However, there is an urgent need to invest in more research on how this could be best implemented in a sustainable way and in different regions, especially in the global South.
    Date: 2021–12–20
  44. By: Arnita Rishanty (Bank Indonesia Institute, Bank Indonesia); Sekar Utami Setiastuti (Department of Economics, Universitas Gadjah Mada.); Nur M. Adhi Purwanto (Bank Indonesia)
    Abstract: This study aims to develop an environmental dynamic stochastic general equilibrium (E-DSGE) model with heterogeneous production sectors and evaluate possible central bank and fiscal policies towards green and sustainable production. We estimate the model for the Indonesian economy and assess the effects of macroeconomic uncertainty in terms of productivity, monetary, macroprudential, fiscal policy, and financial shocks in a setup that includes policies supporting green firms. We find that aggregate output, consumption, and investment react negatively to a positive monetary policy and government spending shock. Further, we show that emission tax may dampen the contraction of green output due to contractionary monetary and fiscal policy. The effect of green financing subsidy, however, looks trivial
    Keywords: DSGE model, Bayesian estimation, Monetary policy, Fiscal policy, Environ- mental policy
    JEL: E32 E50 Q58
  45. By: Ruhnau, Oliver; Muessel, Jarusch
    Abstract: The “When2Heat” dataset comprises synthetic national time series for heat demand and heat pumps’ coefficient of performance (COP) in hourly resolution. Heat demands for space and water heating are computed by combining gas standard load profiles with spatial temperature reanalysis data and population geodata. With this update, we extend the dataset to 28 European countries and the period from 2008 to 2019, including new, state-of-the-art data sources. For the geographical extension, we propose a novel approach, shifting established German heat demand curves based on country-specific heating thresholds to account for regional differences in thermal insulation and user behavior. Using the example of Italy, we illustrate the effect of shifting heat demand curves. The dataset, scripts, and input parameters are publicly available under an open-source license on the Open Power System Data platform.
    Keywords: Heat demand,Heat pumps,Coefficient of performance,Europe
    Date: 2022
  46. By: Sakib, S M Nazmuz
    Abstract: This paper is intended to investigate the determinants of urbanization in Pakistan using the annual time series data from 1973 to 2018. Our aim with this paper is to analyze the short run and long run relationship between urbanization and its key determinants. We employed the ARDL (Autoregressive Distributed Lag) model for estimation purpose. We applied a cointegration approach i.e., the ARDL bounds test to confirm the relationship between urbanization (dependent variable) and other independent variables including GDP per capita growth, unemployment, literacy rate and energy demand. Diagnostic tests ensured the statistical soundness and validity of model. This study concluded that, in short run, the GDP per capita growth, literacy rate and energy demand positively influence the urbanization, while unemployment in urban areas is negatively associated with urbanization. Some policy implications are drawn, and some suggestions are given to deal with the substantial challenges of urbanization.
    Date: 2021–08–09
  47. By: Juan Benavides
    Abstract: La tesis central del presente capítulo es que la infraestructura es más importante para la economía por sus externalidades y vertimientos sobre toda la economía y la habilitación de nuevos negocios que por sus encadenamientos hacia atrás con sectores que, en su mayoría, producen bienes no transables internacionalmente. "Este documento tiene cuatro secciones, además de este resumen. La primera sección caracteriza económicamente a la infraestructura en general y en cada sector estudiado. La segunda sección presenta la evolución institucional y regulatoria de cada sector. La tercera sección presenta un balance de logros, retos y prospectiva y la cuarta sección hace las recomendaciones para la década y para el corto plazo."
    Keywords: Infraestructura, Tecnologías de la Información y la Comunicación, Economía de la Infraestructura, Electricidad, Gas Natural, Transporte, Tecnologías de la Información y la Comunicación, TIC, Economía Política, Política Pública, Colombia
    JEL: H54 O18 L94 L90 R41 L86
    Date: 2021–04–01
  48. By: Astrid Martínez Ortiz
    Abstract: Este documento examina la agenda de política pública del sector minero-energético de Colombia en la década que recién comienza, dentro del marco de la transición energética mundial. "Este capítulo se compone de cuatro secciones. En la primera se analiza el entorno internacional en cuanto a las tendencias de la demanda mundial de los combustibles fósiles y la agenda del cambio climático. En la segunda se analizan los retos de la política energética mundial. En la tercera se exponen los impactos macroeconómicos y regionales de los cambios en el mercado internacional. En la cuarta se presentan unas reflexiones finales."
    Keywords: Energía, Transición Energética, Política Pública, Política Energética, Sector Minero-Energético, Colombia
    JEL: O13 Q40 O54
    Date: 2021–04–01
  49. By: Petra Zsuzsa Lévay; Tim Goedemé; Gerlinde Verbist
    Date: 2022–02
  50. By: Wiefel, Jennifer
    Abstract: Recent advancements in intelligent technologies and sensor-based data collections pave the way for autonomous driving and facilitate a radical transformation of today’s mobility. Based on auspicious market projections, traditional automotive manufacturers and technology companies invest heavily in the development of autonomous vehicles (AVs). In addition to the profits that the industry expects from self-driving vehicles, this new type of mobility should also solve societal issues like reducing traffic accidents and fatalities by eliminating human driving errors. More efficient autonomous driving is expected to bring improvements in terms of fewer congestions and less fuel consumption, thereby reducing greenhouse emissions. Besides, AVs pledge to entail advantages for their users. Specifically, they increase mobility for the disabled and the older generation. In contrast, younger passengers associate autonomous driving with improved productivity and an enhanced hedonic experience as non-driving activities, such as working or watching a movie, are made possible. Contrary to the above expectations, people also raise concerns regarding self-driving vehicles. They are worried about whether the sensors and systems can correctly interpret complex environmental conditions. Above all, there are doubts whether the technology, even being intelligent, can react appropriately in critical traffic situations made up of humans who sometimes behave unpredictably. In case of unavoidable traffic accidents, ethical questions come into play regarding how the vehicle makes decisions that could result in a person being injured or killed. Finally, the new and sophisticated technology could have vulnerabilities that can be exploited by cybercriminals or allow unauthorized third parties to obtain passenger data. Motivated by the anticipated improvements that AVs entail and the breadth of factors that might influence their adoption, a large body of research investigating relevant adoption factors has accumulated. In order to collect, organize, and combine extant findings, research paper A conducts a structured literature review on the acceptance of autonomous vehicles. Based on 58 articles, it develops an AV acceptance framework consisting of individual user characteristics, vehicle characteristics, and political/societal elements. The framework indicates for each factor whether available research results identify the effect as either positively or negatively significant. Thereby, the paper also sheds light on diverging construct operationalizations, aiming to support researchers in comparing available findings. Eventually, paper A proposes future research avenues across various themes and methods, which build a foundation for further research pursued in this dissertation’s subsequent papers. However, solely balancing significant against non-significant results can come to wrong conclusions since the sample size alone can lead to varying significance levels. Because of this, paper B builds on the literature review and conducts a meta-analysis to include further quantitative analyses. It calculates the mean effect sizes for each AV acceptance factor based on published research results. By doing so, the paper identifies attitude, perceived usefulness, efficiency, trust in AVs, safety, and subjective norms to correlate most strongly with the behavioral intention to use an automated car. A subsequent moderator-analysis shows that almost all acceptance factors are influenced by the study’s methodology and location, the AV’s level of automation, and the examined ownership model, i.e., private cars, car sharing, or public transport. In doing so, paper B observes that most of the available research is on privately owned AVs and hence lacks to assess public as well as shared automated mobility. To fill this gap, paper C investigates characteristics relevant for automated mobility as a service (AMaaS). Based on 23 exploratory interviews with the general public, the paper derives a set of AMaaS requirements. Mobility experts sort these requirements based on commonalities so that a cluster analysis can conceptualize the expected AMaaS characteristics from a practitioner’s view. The paper identifies traffic safety, information privacy, cybersecurity, regulations, flexibility, accessibility, efficiency, and convenience to be relevant service characteristics. It discusses each required characteristic and thereby delineates the constructs’ scopes so that subsequent research can build appropriate measurement instruments. Besides, paper C discovers strongly diverging priorities regarding the respective service characteristics when comparing the potential users’ conversation shares with the experts’ relevance ratings. Paper D builds on the qualitative results of paper C as it develops and validates a hierarchical quality scale for AMaaS. The paper proposes a theoretical model and operationalizes the previously identified service characteristics. Throughout multiple empirical studies with 1,431 participants, the proposed quality scale is refined iteratively until satisfactory psychometric properties are achieved. Nomological validity ensures the scale’s predictability. Paper D progresses research from focussing on the mere acceptance of autonomous driving to the user’s quality perception, which significantly influences user satisfaction and the success of AMaaS. This, in turn, is necessary to realize the promised benefits of autonomous driving in a sustainable manner.
    Date: 2022
  51. By: Itten, Anatol; Mouter, Niek
    Abstract: Notwithstanding the rationale and the demand for public participation in climate policies, aggregated perspectives of maxi-publics are often belittled as uninformed, self-interested and short-term focused. The upcoming vogue of climate assemblies, citizen parliaments and other forms of mini-publics is to give citizens a central role in climate policy-making and in some cases to break political impasse. Yet climate mini-publics face challenges in political environments too, such as co-option, favoring expert-opinions and losing touch with the broader public. To remedy such pitfalls, recent papers have argued to combine synchronous deliberations of small groups of citizens with online participation procedures for the larger public. In this article, we report the results of a three-step combination model, where first a mini-public in the region of Súdwest-Fryslân (NL) were given a ‘carte blanche’ to draft the content and the parameters of several related policy alternatives. Second, their proposals were fed into a digital participation tool, the Participatory Value Evaluation (PVE) to consult the wider public. A total of 1,376 (approx. 2% of the inhabitants) expressed their preferences and explained why they favour a dominant role for the municipality and the residents but are reticent about giving the market too big a role. Third, a citizen forum translated the outcomes of the maxi-public into policy recommendations, which were unanimously approved by the municipal council. In this paper, we report our findings of combining mini-and maxi-publics and how actors involved evaluated the strengths and weaknesses of the combination of these two participatory approaches.
    Date: 2022–01–04
  52. By: Leuchters, Maxi
    Abstract: Die EU-Kommission hat die Umsetzung des Green Deal und damit das Erreichen der Klimaneutralität als ein zentrales Projekt für die EU definiert.- Die Umstellung der Wirtschaft bedarf hoher Inves-titionen, die allein aus öffentlichen Mitteln nicht zu stemmen sind. Eine Umsteuerung von privaten und öffentlichen Kapitalströmen hin zu nachhaltiger Wirtschaftstätigkeit ist das Ziel.- Die europäische Taxonomie-Verordnung soll bei der Akquirierung der benötigten Investitionen für die Umstellung der Wirtschaft eine entscheidende Rolle spielen. So sollen wirtschaftliche Tätigkeiten anhand von sechs Umweltzielen bewertet sowie klassifiziert werden.- Wirtschaftliche Tätigkeiten von Unternehmen können demnach dann als nachhaltig bezeichnet werden, wenn sie zu einem der sechs Umweltziele einen wesentlichen Beitrag leisten, die anderen Ziele nicht erheblich beeinträchtigen (Do-No-Significant-Harm Kriterien) sowie soziale Mindest-standards eingehalten werden.- Unternehmen, die eine nicht-finanzielle Erklärung abgeben müssen, werden für das Finanzjahr 2021 den taxonomiekonformen Anteil des Umsatz-erlöses, der Investitions- und Betriebsausgaben angeben.- Soziale Standards spielen in der bereits geltenden Verordnung nur eine untergeordnete Rolle. Es wird aktuell diskutiert, ob eine ergänzende soziale Taxonomie eingeführt wird. Diese muss aus gewerk-schaftlicher Sicht zwingend den Schutz von Men-schen- und Arbeitnehmer:innenrechten beinhalten.
    Date: 2022
  53. By: Juan Ignacio Pe\~na; Rosa Rodriguez; Silvia Mayoral
    Abstract: This paper compares the in-sample and out-of-sample performance of several models for computing the tail risk of one-month and one-year electricity futures contracts traded in the NordPool, French, German, and Spanish markets in 2008-2017. As measures of tail risk, we use the one-day-ahead Value-at-Risk (VaR) and the Expected Shortfall (ES). With VaR, the AR (1)-GARCH (1,1) model with Student-t distribution is the best-performing specification with 88% cases in which the Fisher test accepts the model, with a success rate of 94% in the left tail and of 81% in the right tail. The model passes the test of model adequacy in the 100% of the cases in the NordPool and German markets, but only in the 88% and 63% of the cases in the Spanish and French markets. With ES, this model passes the test of model adequacy in 100% of cases in all markets. Historical Simulation and Quantile Regression-based approaches misestimate tail risks. The right-hand tail of the returns is more difficult to model than the left-hand tail and therefore financial regulators and the administrators of futures markets should take these results into account when setting additional regulatory capital requirements and margin account regulations to short positions.
    Date: 2022–02
  54. By: Delanote, Julie; Rückert, Désirée
    Abstract: Using survey data on climate innovation, we map climate innovation patterns across different regions and technologies, and study the cooperation, protection and reach of climate innovation. Our analysis confirms that there is a strong link between climate innovation and firm performance. We nevertheless observe that European firms seem to suffer from the availability of finance. If European policymakers want to create more successful firms in the climate sector, they should strengthen policies that aim to reduce regulatory uncertainty and work actively to improve access-to finance conditions, in particular for start-ups.
    Keywords: Climate action and environment,Economics
    Date: 2022
  55. By: Agarwala, M.; Burke, M.; Klusak, P.; Mohaddes, K.; Volz, U.; Zenghelis, D.
    Abstract: Both the physical and transition-related impacts of climate change pose substantial macroeconomic risks. Yet, markets still lack credible estimates of how climate change will affect debt sustainability, sovereign creditworthiness, and the public finances of major economies. We present a taxonomy for tracing the physical and transition impacts of climate change through to impacts on sovereign risk. We then apply the taxonomy to the UK's potential transition to net zero. Meeting internationally agreed climate targets will require an unprecedented structural transformation of the global economy over the next two or three decades. The changing landscape of risks warrants new risk management and hedging strategies to contain climate risk and minimise the impact of asset stranding and asset devaluation. Yet, conditional on action being taken early, the opportunities from managing a net zero transition would substantially outweigh the costs.
    Keywords: Sovereign debt, climate change, net zero, transition risk, productivity
    Date: 2021–09–06
  56. By: Jean-Charles Hourcade; Peter Tankov; Stéphane Voisin; F. Ghersi (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); Julien Lefèvre
    Date: 2021
  57. By: Nandrasa Tiava (Université de Toliara)
    Abstract: Climate change brings changes in financial behavior. Households that are the most impacted by climate disruption adopt a strategy of financial behavior change to improve their resilience. Tontine, access to MFIs and VOAMAMI are the preferred ways for vulnerable households to cope. This paper first outlines the resilience capacity of households and provides an analysis of household behavior change to mitigate the effect of climate change.
    Abstract: Le changement climatique apporte de changement de comportement au niveau de la finance. Les ménages qui sont les plus impactés par le dérèglement climatique adopte une stratégie de changement de comportement financier pour améliorer leur capacité de résilience. La Tontine, l'accès au IMF et le VOAMAMI sont les pistes privilégiées par les ménages vulnérables pour y faire face. Cet article expose d'abord la capacité de résilience des ménages et apporte une analyse sur le changement de comportement des ménages pour atténuer e l'effet du changement climatique.
    Keywords: VOAMAMI,Tontine,Behavior,Climate change,Comportement,Changement climatique
    Date: 2022–02–02
  58. By: Jarke-Neuert, Johannes; Perino, Grischa; Schwickert, Henrike
    Abstract: We test the hypothesis that protest participation decisions in an adult population of potential climate protesters are interdependent. Subjects (n=1,510) from the four largest German cities were recruited two weeks before protest date. We measured participation (ex post) and beliefs about the other subjects' participation (ex ante) in an online survey, used a randomized informational intervention to induce exogenous variance in beliefs, and estimated the causal effect of a change in belief on the probability of participation using a control function approach. Participation decisions are found to be strategic substitutes: a one percentage-point increase of belief causes a .67 percentage-point decrease in the probability of participation in the average subject.
    Date: 2021–12–16
  59. By: Dugan, Anna; Prskawetz, Alexia; Raffin, Natacha
    Abstract: It is widely accepted that environmental and demographic changes will significantly influence the future of our society. In recent years, an increasing number of studies has analyzed the interlinkages among economic growth, environmental factors and a specific demographic variable, namely life expectancy, applying an overlapping generations framework. The aim of this survey is threefold. First, we review the role of life expectancy and pollution for sustainable growth. Second, we discuss the role of intervening factors like health investment and technological progress as well as institutional settings including government expenditures, tax structures and inequality. Finally, we summarize policy implications obtained in different models and compare them to each other.
    Keywords: Environmental quality,Pollution,Longevity,Endogenous growth,Government policy
    JEL: O11 O44 Q56 Q58 J10
    Date: 2022
  60. By: Lindberg, John C. H.; Archer, Denali
    Abstract: The term ‘radiophobia’ has been a cornerstone in the nuclear discourse over the past 70 years, and has been used extensively to dismiss fears of radiation as being emotional overreactions to a risk that is actuarially very low, stemming from public ignorance. Despite its longevity in nuclear discourse, little attention has been afforded to the term, its history, and the factors that underpin the extreme divergence in risk perception that the term de facto refers to, threatening to severely hamper any efforts to redress said divergence. This article will explore these factors, mostly sociopsychological in nature, and conclude that the powerful affective imagery associated with radiation, compounded by various heuristics and biases, renders public discomfort with ionising radiation from nuclear power plants rational – despite the actuarial safety record of nuclear energy globally. The article will note that. whilst its often ostracising usage towards the public should render the term obsolete, radiophobia can still be regarded as a useful concept to try and explain the extreme risk perception divergence that exists between nuclear experts and the public. In order for a more constructive discourse, a paradigm shift that acknowledges the complex historical and sociopsychological factors that have shaped radiation into becoming a uniquely feared process will be required. Such an acknowledgement will likely be a prerequisite for any efforts towards normalising humanity’s relationship with radiation, and would require considerable changes in communication practices.
    Date: 2021–12–30

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