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on Energy Economics |
| By: | Rim Berahab |
| Abstract: | Energy markets have experienced significant disruptions since the outbreak of COVID-19. In late 2021, soaring natural gas prices triggered a new crisis, leading to risks of energy supply shortages worldwide and propelling the issue of energy security to the forefront. Africa will not be spared the repercussions of this crisis, which could further increase energy inequality, which is in turn linked to other forms of inequality. Indeed, in a context of persistent inflation, the lack of reliable and affordable energy supplies tends to limit production possibilities and industrial growth, with negative impacts on employment, social protection, and health services, among others. While developed countries have achieved energy security and are now focusing on the energy transition, Africa strives to attain both. This makes the road ahead all the more challenging, as trade-offs between fossil fuels and renewables must be made in the short term to maintain a sustainable and secure energy supply. This implies the coexistence of fossil fuels and renewables for quite some time, which seems to go against the general consensus in favor of eliminating fossil fuels as soon as possible. It also raises the question of accountability for climate change action. While the energy transition is inevitable, it must be tailored to the socio- economic, political, and security contexts of each region, and in its implementation must take into account regions’ different responsibilities for climate change. |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:ocp:ppaper:pb06-22&r= |
| By: | Ali, M.; Couto, L. C.; Unsworth, S.; Debnath, R. |
| Abstract: | Energy research seeking to influence policy in low- and -middle-income countries (LMICs) is often funded by – and conceptualised by authors in - institutions from high-income countries (HICs). Research agendas and policy recommendations determined in HICs potentially yield the most influence on policymaking for LMICs. This leaves a multidimensional gap in how LMICs frame, contextualise, evidence and enact policy processes. The unique contribution of this paper is analysing the dynamics of prevalent energy research on LMICs through a multi-method approach using bibliometric, network science and regression-based techniques. An innovative data-driven framework was established using a sample of 6,636 papers from the Web of Science database, combined with journal impact data from Scimago Journal Ranking and country economic data from the World Bank. Results show the existence of a cycle of imbalances across research practices. Most papers recommending energy policy for LMICs have a first author based in a HIC, funded by a HIC institution. Total citations of articles on energy policy in LMICs increase with the GDP of the first author’s country (a 1% increase in GDP is correlated with a 0.68% increase in total citations). Funders support authors based in countries of the same income band as them, or higher. Therefore, we recommend revising research practices and HIC funding policies to place local actors and knowledge at the heart of energy policy research, enabling high-impact policymaking in LMICs. |
| Keywords: | developing countries, Energy policy, energy research, funding, science collaboration |
| JEL: | Q49 O39 I28 |
| Date: | 2022–03–05 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2216&r= |
| By: | Syed Hasan (School of Economics and Finance, Massey University, Palmerston North); Odmaa Narantungalag, (School of Economics and Finance, Massey University, Palmerston North); Martin Berka (School of Economics and Finance, Massey University, Palmerston North) |
| Abstract: | We investigate the impact of mining pollution on the likelihood of reporting illness by linking geocoded soil pollution information with five rounds of Mongolian Household Socio-Economic Survey data. Using perceived property rent as an instrument, our probit regression results indicate that doubling the distance between a person’s residence and nearest mine reduces their probability of feeling unwell by around 7.4 percentage points on average. Individuals also increase their medical expenditure as a result of increased illness. We observe mining pollution to disproportionately hurt younger children. Artisanal and small-scale mines have stronger effects on human health than medium and large-scale mines. Gold mines were observed to be worst, compared to the mines extracting other types of minerals. Our findings suggest that environmental regulations to control/mitigate mining pollution can reduce short- to long-term health risks of the people living near mines. |
| Keywords: | Mining pollution, Health, Development, Mongolia |
| JEL: | I15 O13 Q53 Q56 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:mas:dpaper:2203&r= |
| By: | Odmaa Narantungalag, (School of Economics and Finance, Massey University, Palmerston North) |
| Abstract: | This paper investigates the economic impacts of the mining sector on household expenditures. Employing the difference-in-differences model and the Mongolia Household Socio-Economic Survey data from 2008 to 2016, I find that the mining activities benefited local residents. Specifically, mining activities increase household expenditures on food, health, and electricity, respectively, while households reduce their expenditures on education and other non-food items. Interestingly, illness did not increase in the resource-producing region, while educational attainment improved. The findings highlight that the positive impacts of the mining sector are likely to be higher than what is determined by traditional welfare measurements of income and consumption. I provide some anecdotal evidence that the changes in household expenditure patterns can be due to increased availability of health care services and educational facilities in the mining region. |
| Keywords: | Mining, Natural Resources, Regional Economy, and Economic Development |
| JEL: | L72 O12 O13 Q32 R11 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:mas:dpaper:2204&r= |
| By: | Syed Hasan (School of Economics and Finance, Massey University, Palmerston North); Odmaa Narantungalag, (School of Economics and Finance, Massey University, Palmerston North); Martin Berka (School of Economics and Finance, Massey University, Palmerston North) |
| Abstract: | We investigate the effectiveness of large electricity subsidies to reduce the consumption of dirty energy and improve ambient air quality. We exploit a policy change in Mongolia that provides 50-100 percent subsidy to households in some regions, allowing us to use difference-in-differences models. Using five rounds of the Mongolia Household Socio-Economic Survey, we find that the subsidy reduces the likelihood of reporting illness. We further find that households receiving the electricity subsidy increase their (total of subsidised and un-subsidised) electricity expenditure by at least 17 percent more than those who have not received any such benefit. This is an important positive outcome, indicating that households changed their behavior of daytime and non-winter season electricity consumption, when they do not receive any subsidy. Policymakers, therefore, need to internalize the unintended benefit of the subsidy when comparing with the cost of the programme. |
| Keywords: | Electricity demand, Inequality of electricity access, Health, Development, Mongolia |
| JEL: | D12 O13 Q41 Q53 Q56 L94 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:mas:dpaper:2202&r= |
| By: | Emanuela Benincasa (Swiss Finance Institute; University of Zurich - Department of Banking and Finance); Gazi Kabas (University of Zurich); Steven Ongena (University of Zurich - Department of Banking and Finance; Swiss Finance Institute; KU Leuven; NTNU Business School; Centre for Economic Policy Research (CEPR)) |
| Abstract: | We document that lenders react to domestic climate policy stringency by increasing cross-border lending. We use granular fixed effects to control for loan demand and an instrumental variable strategy to establish causality. Consistent with regulatory arbitrage, the positive effect decreases in borrowers’ climate policy stringency and is absent if the borrower country has a higher stringency. Furthermore, climate policy stringency decreases loan supply to domestic borrowers with high carbon risk while increasing loan supply if such borrowers are abroad. Our results suggest that crossborder lending can enable lenders to exploit the lack of global coordination in climate policies. |
| Keywords: | Cross-Border Lending, Climate Policy, Regulatory Arbitrage, Syndicated Loans |
| JEL: | G21 H73 Q58 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp2228&r= |
| By: | Coralie Jaunin (University of Lausanne - School of Economics and Business Administration (HEC-Lausanne); Swiss Finance Institute); Tammaro Terracciano (University of Geneva, GFRI; Swiss Finance Institute) |
| Abstract: | This paper studies the relationship between green funds and firms' attention to sustainability. By using a natural language processing algorithm that extracts topics from texts, we measure the extent to which firms talk about sustainable energy during earnings conference calls. We use our measure to evaluate green funds' response to firms discussing sustainable energy. Our main result is that, when managers discuss sustainable energy topics, green funds respond by investing in the firm, while other funds divest. This corroborates the idea that green funds are essential to change firms' incentives and steer them towards the energy transition. Finally, we document that the overall attention that firms and funds pay to the environment is still very limited, although increasing in recent years. |
| Keywords: | green finance, sustainable investing |
| JEL: | G11 G23 Q01 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp2219&r= |
| By: | Sandra Aguilar-Gomez; Holt Dwyer; Joshua S. Graff Zivin; Matthew J. Neidell |
| Abstract: | A robust body of evidence shows that air pollution exposure is detrimental to health outcomes, often measured as deaths and hospitalizations. This literature has focused less on subclinical channels that nonetheless impact behavior, performance, and skills. This article reviews the economic research investigating the causal effects of pollution on "non-health" endpoints, including labor productivity, cognitive performance, and multiple forms of decision making. Subclinical effects of pollution can be more challenging to observe than formal health care encounters but may be more pervasive if they affect otherwise healthy people. The wide variety of possible impacts of pollution should be informed by plausible mechanisms and require appropriate hypothesis testing to limit false discovery. Finally, any detected effects of pollution, both in the short and long run, may be dampened by costly efforts to avoid exposure ex-ante and remediate its impacts ex-post; these costs must be considered for a full welfare analysis |
| JEL: | I12 I31 J22 J24 Q51 Q53 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29848&r= |
| By: | Stephanie von Hinke; Emil Sorensen |
| Abstract: | This paper uses a large UK cohort to investigate the impact of early-life pollution exposure on individuals' human capital and health outcomes in older age. We compare individuals who were exposed to the London smog in December 1952 whilst in utero or in infancy to those born after the smog and those born at the same time but in unaffected areas. We found that those exposed to the smog have substantially lower fluid intelligence and worse respiratory health, with some evidence of a reduction in years of schooling. |
| Date: | 2022–02–18 |
| URL: | http://d.repec.org/n?u=RePEc:bri:uobdis:22/757&r= |
| By: | Witcover, Julie |
| Abstract: | Low-carbon biofuels are projected to play a critical role in the early and middle stages of a transition away from petroleum fuels, and they will likely have a longer-term role in uses like aviation and maritime transportation that require energy-dense fuels in high volumes. Policies over the last decade aimed to move low-carbon biofuels squarely into U.S. markets. While these policies encouraged the production of conventional biofuels such as crop-based ethanol, cellulosic fuels that can have a significantly lower carbon footprint per unit energy failed to materialize at commercial scale. A research team at the University of California, Davis examined the track record of the past decade for clues as to why this happened, and looked forward to 2030 to point to how current policies are likely to still fall short in delivering low-carbon biofuels that can reach scales needed for these hard-to-decarbonize sectors. The findings highlight barriers to low-carbon biofuel development that would safeguard against unintended consequences such as additional emissions from land use changes or higher food prices that can come from competition with the use of crops for fuel. This policy brief summarizes the findings from that research and provides policy implications. View the NCST Project Webpage |
| Keywords: | Business, Biomass fuels, Forecasting, Market assessment |
| Date: | 2022–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsdav:qt1wm0q8gj&r= |
| By: | Moncef Krati; Mohammad Aldubyan (King Abdullah Petroleum Studies and Research Center) |
| Abstract: | This paper describes an optimization-based approach to evaluate measures providing peak electricity demand reduction cost benefits for Saudi residential buildings. These measures can be categorized as energy efficiency (EE) and renewable energy (RE) measures. Specifically, this paper models the existing Saudi building stock using 56 housing prototypes based on types, vintages and locations. |
| Keywords: | Energy Efficiency, Residential Buildings, Electricity demand |
| Date: | 2021–12–22 |
| URL: | http://d.repec.org/n?u=RePEc:prc:dpaper:ks--2021-dp20&r= |
| By: | Franziska Holz; Claudia Kemfert; Hella Engerer; Robin Sogalla |
| Abstract: | Die Erdgasversorgung der Europäischen Union stützte sich bisher zu einem großen Teil auf Lieferungen aus Russland. In Deutschland, Italien, Österreich und den meisten Ländern Ost- und Mitteleuropas war diese Abhängigkeit besonders hoch. Allerdings spielt Erdgas nicht in allen diesen Volkswirtschaften eine gleich große Rolle. Mit dem völkerrechtswidrigen Krieg Russlands in der Ukraine stellen sich die dringlichen Fragen, wie diese Abhängigkeit reduziert werden kann und was im Fall einer Lieferunterbrechung von russischen Erdgasexporten passieren würde. Dieser Bericht skizziert die Ausgangslage und diskutiert kurzfristige Anpassungsreaktionen. Modellrechnungen zeigen, dass die Europäische Union bei einem Komplettausfall russischer Erdgaslieferungen einen Großteil kompensieren kann. Kurzfristig stehen die effiziente Bewirtschaftung bestehender Infrastruktur, die Diversifizierung der Bezugsverträge sowie Maßnahmen zur Nachfrageanpassung im Mittelpunkt. Mittelfristig sollte der Ausbau erneuerbarer Energien im Kontext des EU Green Deal beschleunigt werden, inklusive eines zeitnahen Ausstiegs aus der Nutzung fossilen Erdgases, der die europäische Energiesicherheit weiter stärken würde. |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwakt:81de&r= |
| By: | Wildgrube, Theresa (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)) |
| Abstract: | To achieve the EU’s new climate target of reducing emissions by at least 55% until 2030, the European Commission proposed a reform of the EU ETS in its ’Fit for 55’ legislative package. The reform entails an increase of the linear reduction factor (LRF), an adjustment of the intake rules for the Market Stability Reserve (MSR) and the introduction of a fixed threshold for the cancellation of allowances. A numerical discrete-time optimization model of the EU ETS assesses the impact of the reform as a whole and decomposes this impact into the effects caused by the three individual reform elements. The results show a significant impact of the reform with 48% higher prices in 2021 compared to the current regulation. Among other factors, the reform proposal has thereby significantly driven the observed price increase in 2021. The impact of the increased LRF is substantial, while the adjustments of MSR and Cancellation Mechanism are less important. While the proposed reform strengthens the EU ETS, the increased LRF and the adjusted MSR rules do not fully achieve their intended goals. The increased LRF may not reach the intended emissions reduction of 61% for emissions covered under the EU ETS. The adjusted MSR regulation may increase resilience to shocks. Yet, it may also decrease MSR intake, reducing the MSR’s ability to regulate allowance supply. The fixed cancellation threshold increases the predictability of the mechanism as intended. However, the changed cancellation volume has repercussions on the achievement of the emission reduction target. |
| Keywords: | Fit for 55; EU ETS; Linear reduction factor; Market Stability Reserve; Cancellation Mechanism |
| JEL: | C61 D25 Q48 Q54 Q58 |
| Date: | 2022–03–28 |
| URL: | http://d.repec.org/n?u=RePEc:ris:ewikln:2022_004&r= |
| By: | Ilenia Romani (Università degli Studi di Brescia and Fondazione Eni Enrico Mattei); Marzio Galeotti (Università degli Studi di Milano and Fondazione Eni Enrico Mattei); Alessandro Lanza (LUISS and Fondazione Eni Enrico Mattei) |
| Abstract: | The funds allocated by the National Recovery and Resilience Plan (NRRP) aim to trigger a multiplier effect on GDP as they are designed to help the recovery after the Covid-19 pandemic. The GDP increase is in turn expected to drive energy consumption up which will increase CO2 emissions, given that fossil fuels still account for 79% of the Italian total primary energy consumption. At the same time, as the NRRPs are part of the EU Green Deal, an important share of the Plan’s investments is aimed at facilitating the green transition, with expected favorable effects on emissions. Which one of these two effects will prevail remains to be ascertained. In this study we have used the GEM (Global Economic Model) by Oxford Economics to build a number of scenarios and generate the relevant simulations aimed at assessing the impact of the Italian NRRP’s interventions on energy consumption and CO2 emissions. To validate the use of GEM we extensively considered the macroeconomic impact on GDP and unemployment rate generated by the model and compare the results to those presented by other institutions and obtained using different models. The results show that when the green investments of the NRRP display their effects, there are climatic benefits in terms of reduced emissions. Compared to the implementation of the NRRP in 2021, however, the reduction in emissions by 2030 is modest and equal to 5%. As those investments largely refer to the adoption of clean technologies, the climate benefits are likely to be more substantial only in subsequent years and over longer horizons. |
| Keywords: | National Recovery and Resilience Plan, CO2 emissions, Large-scale macroeconomic model, Post-Covid recovery |
| JEL: | E37 E61 E62 Q43 Q54 C30 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2022.08&r= |
| By: | Sabyasachi Kar; Debajit Jha (Institute of Economic Growth, Delhi) |
| Abstract: | Should economies attempting to break out of low-growth convergence clubs adopt policies distinctly different from those in high-growth clubs? This paper proposes a framework that helps answer this question. To do this, we extend the logic of policy divergence from the growth transitions literature to the analysis of club convergence. We then test this framework by applying it to an analysis of regional growth in India in the postreform period. Our framework identifies sixteen sub-national regions in India belonging to two low-growth clubs that should focus on improving their investment climate. Another fifteen such regions from two high-growth clubs however, need urgent institutional reforms." |
| Keywords: | Club Convergence, Growth Transition, Policy Divergence, Investment Climate, Institutional Reform, Indian Economy" |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:awe:wpaper:449&r= |
| By: | Bauckloh, Michael Tobias; Klein, Christian; Pioch, Thomas; Schiemann, Frank |
| Abstract: | We examine whether mandatory climate reporting leads to changes in firms' carbon emissions. Using propensity score matching and a difference-in-differences design, we assess the effects of the Greenhouse Gas Reporting Program (GHGRP), introduced by the Environmental Protection Agency (EPA) in 2010, on the carbon performance defined as carbon intensity and absolute carbon emissions of affected firms. Institutional and legitimacy theory serve as theoretical underpinnings to investigate the degree to which firms comply with their ethical obligations. We find that firms affected by the GHGRP improve their carbon performance significantly more than unaffected firms after the introduction of the GHGRP, but not their absolute carbon emissions. The results are robust to changes in the difference-in-differences design and the matching sample.Overall, our study add to research on climate-related disclosure regulation by assessing the GHGRP's suitability as a regulatory measure to limit firms' negative impacts on our climate. |
| Keywords: | carbon performance,mandatory reporting,institutional theory |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cfrwps:2201&r= |
| By: | Charles Pébereau; Kevin Remmy |
| Abstract: | This paper studies the introduction of real-time electricity pricing in the New Zealand residential retail market to understand why its market share remained below 1.25%. We use rich panel data of all retail switches between 2014 and 2018 and an unexpected wholesale price spike to study adoption and attrition. Exploiting the staggered roll-out of real-time pricing in different locations we find that attrition decreases with experience. We also find that prospective adopters are present biased. The combination of these findings explains why adoption stalled and shows that wholesale price spikes pose a serious threat to widespread adoption of real-time pricing. |
| Keywords: | energy, time-varying pricing, consumer behavior, learning |
| JEL: | D12 D83 D91 L52 L81 L94 Q41 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2022_339&r= |
| By: | Weshah Razzak (School of Economics and Finance, Massey University, Palmerston North) |
| Abstract: | Evidence-based policy re global warming is best relying on a relevant sample of data. Showing close correlation between CO2 and temperature over hundreds of thousands of years is irrelevant today. We choose a sample of annual data from 1959 to-date to provide some statistically robust stylized facts about the relationships between actual CO2 and temperature. Visually, there is a clear upward trend in both data. Time series analyses suggest that CO2 is difference-stationary and temperature is trend-stationary. Thus, the moments (mean, variance, etc.) of the data in levels are functions of time, which means that the correlation between the two variables may be spurious. However, we find no statistically robust evidence of correlation, long run co-variation, long run common trend, or common cycles between CO2 and temperature over a period of 60 years. Nonetheless, at most 40 percent of the variance of the Northern Hemisphere temperature is due to , 20 percent of the Southern Hemisphere, and much less of global temperature. |
| Keywords: | Econometrics of unit root, trend, cycle, VAR, temperature and global warming, CO2, greenhouse gasses, and fossil fuel consumption |
| JEL: | C01 C22 C3 Q54 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:mas:dpaper:2103&r= |
| By: | Ciola, Emanuele; Turco, Enrico; Gurgone, Andrea; Bazzana, Davide; Vergalli, Sergio; Menoncin, Francesco |
| Abstract: | The global energy crisis that began in fall 2021 and the following spike in energy price constitute a major challenge for the world economy which risks undermining the post-COVID-19 recovery. In this paper, we develop and validate a new macroeconomic agent-based model with an endogenous energy sector to analyse the role of energy in the functioning of a complex adaptive system and assess the effects of energy shocks on the economic dynamics. The economic system is populated by heterogeneous agents, i.e., households, firms and banks, who take optimal decision rules and interact in decentralized markets characterized by limited information. After calibrating the model on US quarterly macroeconomic data, we investigate the economic and distributional effects of different types of energy shocks, that is an exogenous increase in the price of natural resources such as oil or gas and a decrease in the energy firms' productivity. We find that whereas the two energy shocks entail similar effects at the aggreagate level, the distribution of gains and losses across sectors is largely driven by the subsequent impact on the relative energy price, which varies depending on the type of shock. Our results suggest that, in order to design effective measures in response to energy crises, policymakers need to carefully take into account the nature of energy shocks and the resulting distributional effects. |
| Keywords: | Political Economy, Production Economics, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy |
| Date: | 2022–03–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:feemwp:319877&r= |
| By: | Shahid Hasan; Rami Shabaneh (King Abdullah Petroleum Studies and Research Center) |
| Abstract: | Energy transition discussions, policymakers are increasingly viewing hydrogen as a preferred emissions-free substitute for oil, natural gas and coal in hard-to-abate sectors. However, hydrogen is not a primary energy source but rather is a carrier of energy. Many factors, including its source and the technology used to manufacture it, influence its production costs. Currently, hydrogen manufacturing processes themselves have significant carbon footprints. Thus, for hydrogen to be accepted as a low-carbon fuel source, its production methods must also be decarbonized. |
| Keywords: | Carbon, Carbon capture and storage, Carbon neutrality |
| Date: | 2022–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:prc:dpaper:ks--2021-dp24&r= |
| By: | Feldhaus, Christoph; Gleue, Marvin; Löschel, Andreas; Werner, Peter (RS: GSBE Theme Human Decisions and Policy Design, Microeconomics & Public Economics) |
| Abstract: | We study the role of co-benefits – positive effects of climate protection projects in addition to CO2 reduction – for the motivation to contribute to climate change mitigation. In two artefactual field experiments conducted with large population samples from Germany (n = 2,400 in total), we test if and how the existence and specific nature of co-benefits affect donations. In both experiments, we find that co-benefits have a positive impact on contributions to climate protection. Our second experiment shows that contributions also respond to the nature of co-benefits, and these responses seem to be driven by individual donor preferences for the respective type of co-benefit. Moreover, we observe that making carbon footprints and thus individual responsibility for environmental externalities more salient increases donations irrespective of the existence and nature of co-benefits. Finally, when uncertainty about co-benefits is introduced, the majority of potential donors requests information in both experiments, and those who choose to be informed about co-benefits provide higher donations relative to subjects who choose not to be informed. |
| JEL: | D64 H41 L31 Q51 |
| Date: | 2022–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umagsb:2022004&r= |
| By: | Shixian Gao (Energy Research Institute, National Development and Reform Commission, China) |
| Abstract: | Northeast Asia is one of the most dynamic regions in the world. With the rapid economic growth in the region, energy demand has maintained a certain growth rate. For every country, energy is related to economic security and sustainable development. Energy security has been paid more and more attention by the international community. At present, regional conflicts in Northeast Asia have moderated, thus, it is of great significance to strengthen regional energy cooperation to promote the sustainable development, regional peace and stability of Northeast Asia. The resource conditions and the level of economic and social development in Northeast Asia determine that regional energy cooperation has great potential. |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:eri:dpaper:2105&r= |
| By: | Julia Anna Bingler (Center of Economic Research (CER-ETH), ETH Zürich, Zürichbergstrasse 18, 8032 Zürich, Switzerland) |
| Abstract: | How climate aspects affect sovereign bonds is still a new field of research. I differentiate between transition, physical, and innovation aspects of climate risks and climate performance and estimate the pricing-in of these climate aspects in sovereign bond yields for a sample of 29 countries, for the time 2008-2021. The results show that the effects differ between countries with higher and lower credit rating, long- and short term maturities, and the periods of analysis. Financial markets seem to expect the worst with regards to physical risk exposure and impacts, which are associated with higher yields for the lower-rated countries’ bonds at longer-term maturities. In contrast, they seem to hope for the best with regards to transition risk exposure and innovation opportunities, which are associated with lower bond yields for the countries with higher credit rating, mainly for bonds at shorter-term maturity. The effects are more pronounced for the period after the Paris Agreement and might gain increasing importance as physical and transition risks aggravate in the future. |
| Keywords: | sovereign bonds yields; climate physical risks; climate transition risks; climate opportunities; LASSO dimensionality reduction |
| JEL: | G12 G14 Q54 Q55 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:22-371&r= |
| By: | Gabriel Porcile (Economic Commission for Latin America and the Caribbean – ECLAC) |
| Abstract: | This paper presents a simple analytical framework that combines the three dimensions of sustainable development: the economic dimension (competitiveness based on technical progress and productive diversification), social (a significant fall in inequality) and environmental (decoupling growth from emissions). The point of departure is a structuralist model of BOPconstrained growth; it is discussed how structural transformation relates to the functional distribution of income; and a center-periphery environmental frontier is proposed to define the space for growth in center and periphery that is compatible with reducing CO2 emissions. Sustainable development is attained when the BOP-constrained growth lies on the environmental frontier and equals the rate of growth required for curbing inequality. In addition, it is argued that there are no endogenous market forces that could lead to this convergence, and multiple equilibria are possible. The equilibrium eventually selected depends on institutions and on (domestic and foreign) actors’ political power. |
| Keywords: | sustainable development, BOP constrained growth, productive diversification, technical progress |
| JEL: | O1 O11 Q56 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:ude:doctra:67&r= |
| By: | Mehmet Balcilar (Department of Economics, Eastern Mediterranean University, Turkish Republic of North Cyprus, Via Mersin 10, Famagusta 99628, Turkey; Department of Economics, OSTIM Technical University, Ankara 06374, Turkey); Rangan Gupta (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa); Christian Pierdzioch (Department of Economics, Helmut Schmidt University, Holstenhofweg 85, P.O.B. 700822, 22008 Hamburg, Germany) |
| Abstract: | We investigate whether oil-price uncertainty helps in forecasting international stock returns of ten advanced and emerging countries. We consider an out-of-sample period of 1925:08 to 2021:09, with an in-sample period 1920:08-1925:07, and employ a quantile-predictiveregression approach, which is more informative relative to a linear model, as it investigates the ability of oil-price uncertainty to forecast the entire conditional distribution of stock returns, rather than only its conditional-mean. A quantile-based approach accounts for nonlinearity (including regime changes), non-normality, and outliers. Based on a recursive estimation scheme, we draw the following main conclusions: the quantile-predictiveregression approach using oil-price uncertainty as a predictor statistically outperforms the corresponding quantile-based constant-mean model for all ten countries at certain quantiles (capturing normal, bear, and bull markets), and over specific forecast horizons, compared to forecastability being detected for eight countries under the linear predictive model. Moreover, we detect forecasting gains in many more horizons (at particular quantiles) compared to the linear case. In addition, an oil-price uncertainty-based state-contingent spillover analysis reveals that the ten equity markets are tighter connected during the upper regime, suggesting that heightened oil-market volatility erodes the benefits from diversification across equity markets. |
| Keywords: | international stock markets, oil price uncertainty, forecasting, quantile regression |
| JEL: | C22 C53 G15 Q41 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:202217&r= |
| By: | Liang Chen; Cecilia Garcia-Medina; Rui Wan |
| Abstract: | This paper develops a model of used vehicle trade between countries with different environmental regulations regarding vehicle emissions. We show that the US, given its strict environmental regulations, has incentives to export used vehicles to Mexico, which impacts air pollution emissions caused by automobile driving in Mexico. Using a unique database on vehicle registration in Mexico and imports after the NAFTA enactment, we find that Mexico's used vehicle imports reduced average pollution emissions generated by vehicles, mainly due to the "technique effect" -differences in emissions of vehicles of comparable model and age between those that operate in the US before being imported (that emit less pollutants) and those operating in Mexico. |
| JEL: | F13 L62 Q56 Q51 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:bdm:wpaper:2022-02&r= |
| By: | Tudela, Fernando |
| Abstract: | La Red Iberoamericana de Oficinas de Cambio Climático (RIOCC), cuya creación se estableció en el IV Foro Iberoamericano de Ministros de Medio Ambiente, (Cascais, Portugal, 2004)), tiene como principal objetivo conocer mejor las prioridades, retos y experiencias de los países iberoamericanos en materia de cambio climático mediante un diálogo fluido y permanente. La gobernanza de la RIOCC cuenta con un respaldo ministerial que opera por consenso, con España en la Presidencia y una Vicepresidencia de carácter voluntario y anual que ocupa otro país de la región. La Oficina Española de Cambio Climático actúa como Secretaría Técnica Permanente. Los países de la región participan en las actividades de la RIOCC a través de los puntos focales designados. La nueva situación mundial, regional, nacional y local obliga a reexaminar iniciativas de cooperación como la de la RIOCC, para ponderar sus perspectivas, limitaciones y oportunidades en el contexto de los procesos para poner freno a la pandemia de COVID-19 y controlar sus consecuencias, y para promover una progresiva recuperación y transición hacia una “normalidad” alternativa, que contribuya a impulsar un desarrollo sostenible. |
| Keywords: | CAMBIO CLIMATICO, MEDIO AMBIENTE, DESARROLLO SOSTENIBLE, COVID-19, VIRUS, EPIDEMIAS, ASPECTOS AMBIENTALES, RECURSOS ENERGETICOS, DESARROLLO ECONOMICO, ESTRATEGIAS DEL DESARROLLO, COOPERACION INTERNACIONAL, PAISES DE LA OCDE, UNION EUROPEA, CARICOM, ADAPTACION AL CAMBIO CLIMATICO, CLIMATE CHANGE, ENVIRONMENT, SUSTAINABLE DEVELOPMENT, COVID-19, VIRUSES, EPIDEMICS, ENVIRONMENTAL ASPECTS, ENERGY RESOURCES, ECONOMIC DEVELOPMENT, DEVELOPMENT STRATEGIES, OECD COUNTRIES, EUROPEAN UNION, CARICOM, CLIMATE CHANGE ADAPTATION |
| Date: | 2021–08–24 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col022:47181&r= |
| By: | Azhgaliyeva, Dina (Asian Development Bank Institute); Mishra, Ranjeeta (Asian Development Bank Institute); Yoshino, Naoyuki (Asian Development Bank Institute); Karymshakov, Kamalbek (Asian Development Bank Institute) |
| Abstract: | This study aims to examine the impact of infrastructure on firm performance in nine CAREC countries: Afghanistan, Azerbaijan, Georgia, Kazakhstan, the Kyrgyz Republic, Mongolia, Pakistan, Tajikistan, and Uzbekistan. Empirical analysis is based on the enterprise survey for 2009, 2013, and 2019. Infrastructure is measured by the duration of power outages, electricity expenses as the share of total sales, access to broadband internet and efficiency of customs. Firm performance was measured by total sales, share of utilized capacity, dummy variable if firm exports, and the share of export sales. Results indicate that firm performance measured through sales and capacity utilization is negatively affected by the duration of power outages and electricity expenses. Moreover, access to broadband internet significantly increases the total sales and export sales of small firms, while efficiency of customs increases the exporting activities of medium and large firms. These findings underline that for the development of private sector and international trade in CAREC countries, sustainable access to, and quality of, electricity, telecommunications, and customs efficiency are important objectives for government policy. |
| Keywords: | Central Asia; electricity; telecommunications; infrastructure |
| JEL: | D24 H54 O18 Q41 Q48 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:1265&r= |
| By: | Rilinger, Georg |
| Abstract: | Economic sociologists have rarely studied organizational reasons why market design processes fail. Drawing on the organizational literature on mistakes and accidents, the paper identifies such reasons for a fatal design decision during the creation of California's first electricity markets. Designers proposed weak oversight structures even though their models called for active and permanent regulatory control. Sellers like Enron could therefore manipulate the market without fear of detection, prolonging the western energy crisis. A process of 'structural abstraction' explains this mistake. Designers were split into three groups that worked in different divisions and relied on local frames to understand the oversight requirements. Each group missed information the others were aware of and arrived at the conclusion that minimal oversight would suffice. Higher levels of the hierarchy should have discovered and resolved these discrepancies. However, these levels considered the issue at a higher level of abstraction. Such structural abstraction made room for ambiguities that obscured the local disagreements. |
| Keywords: | California energy crisis,cognition and hierarchy,economic sociology,market design failure,organizational mistakes,Marktdesign,Fehler und Unfälle in Organisationen,Hierarchie und Kognition,kalifornische Energiekrise,Wirtschaftssoziologie |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:mpifgd:216&r= |
| By: | Robin Lindsey; André de Palma; Pouya Rezaeini (Université de Cergy-Pontoise, THEMA) |
| Abstract: | Congestion pricing has long been considered an efficient tool for tackling road traffic congestion, but tolls are generally unpopular. Interest is growing in tradable permits as an alternative. Tolls and tradable permits are interchangeable if travel conditions are unchanging, but not if conditions vary, and tolls and permit quantities are inflexible. We compare the allocative efficiency of tolls and tradable permits under uncertainty on a bimodal network. Road links and public transit service are both congestion prone. Road traffic entering a cordon area around the downtown is controlled using either a toll or a tradable permit. Two groups of travelers can drive or take transit. Group 1 travels downtown, and must either pay the toll or use a permit if driving. Group 2 travels to a suburb, and can avoid the cordon by taking a bypass. All demand and cost parameters of the model can vary, either systematically or irregularly. Travelers learn daily travel conditions in advance, and adapt their mode and route choices accordingly. A planner minimizes expected total travel costs by either setting the level of the toll or choosing the quota of permits to distribute. Two cases are considered. In the first, the toll and quota are flexible and can be adjusted to daily travel conditions. In the second, which is of central interest, the instruments are inflexible. If travelers have identical preferences, the optimal flexible toll is invariant to the numbers of travelers in each group and the capacity of the link entering the cordon. The toll is robust in the sense that inflexibility causes no welfare loss if these parameters vary. By contrast, the quota is not robust. We derive a general rule for ranking the efficiency of a fixed toll and fixed quota. We then explore a numerical example. In most instances, the fixed toll outperforms the fixed quota by a significant margin although the quota can do better for some realizations of parameter values. The relative performance of the quota improves if an environmental externality from driving also exists. Finally, we compare the welfare-distributional effects of tolls and permits, and find that suburban travelers fare better than downtown travelers from both forms of regulation. |
| Keywords: | traffic congestion; cordon toll; tradable permits; mode choice; route choice; uncertainty |
| JEL: | D62 R41 R48 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ema:worpap:2022-06&r= |
| By: | Weshah Razzak (School of Economics and Finance, Massey University, Palmerston North) |
| Abstract: | We show that the share of oil in real output is relatively large, nearly 60 percent. Effectively, the government of Iraq– not the people – owns and manages the oil wealth. This dependence on oil as the main income is also consistent with the rentier economy and the Resource Curse phenomenon. The interest elasticity of oil production with respect to global oil consumption is greater than one. This high dependence on oil as income and the sensitivity of oil production to global oil consumption would not be sustainable in the future, where there is a growing global aversion to hydrocarbon production and consumption. The developed countries aim at zero carbon by 2050. We show that the expected decline in global consumption of oil has an adverse effect on the Iraqi economy. We provide stress tests and produce dynamic stochastic projections from 2020-2050 under a number of adverse scenarios. A quick transfer of ownership of oil to the Iraqi people should guarantee a functional democracy and a better future for the Iraqis. |
| Keywords: | Iraq, oil share, private ownership, FM-OLS, VAR, Stress Testing |
| JEL: | C1 C53 D24 E17 Q3 Q34 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:mas:dpaper:2102&r= |
| By: | Simplice A. Asongu (Yaounde, Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa) |
| Abstract: | In this study, nexuses between governance and natural resource rents are assessed in 44 sub-Saharan African countries using data for the period 1996-2016. The empirical evidence is based on Tobit regressions. The findings show that political governance (entailing “voice & accountability†and political stability) and institutional governance (consisting of the rule of law and corruption control) have a negative effect on resource rents. However, if the conception and definition of attendant governance variables are understood within the framework that such variables are negatively skewed, it becomes apparent that bad governance reduces resource rents. This conclusion clarifies the paradox because negatively skewed governance variables are understood to be representing poor governance. By extension, the negative effect of the rule of law or corruption control on natural resource rents should be the negative effect of the absence of the rule of law or lack of corruption control on natural resource rents. The paradox is further clarified in the light of specific components of the governance dynamics. While the clarification of the paradox is relative, especially if the sample is compared with countries for which governance indicators are largely skewed in the positive direction, from an absolute perspective (i.e. exclusively from the sampled countries), the indicators of the World Bank are standardized such that negative skewness does not affect the estimated results. Another worthwhile argument with which to explain the paradox is that governance has more impact on the nonresource component of GDP. |
| Keywords: | Natural Resources; Economic Growth; Governance; Sub-Saharan Africa |
| JEL: | H10 Q20 Q30 O11 O55 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:exs:wpaper:22/020&r= |
| By: | Shaghayegh Vosough; André de Palma; Robin Lindsey (Université de Cergy-Pontoise, THEMA) |
| Abstract: | Road traffic is a major contributor to air pollution which is a serious problem in many large cities. Experience in London, Milan, and Stockholm indicates that road pricing can be useful in reducing vehicle emissions as well as congestion. This study uses a dynamic traffic network simulator that models choices of mode, departure time, and route to investigate the effectiveness of tolls to target emissions and congestion externalities on a stylized urban road network during a morning commuting period. The spatial distribution of four pollutants is calculated using a Gaussian dispersion model that accounts for wind speed and direction. Single and double cordon tolls are evaluated, as well as flat tolls that do not change during the simulation period and step tolls that change at half-hourly intervals. The presence of emissions externalities raises optimal toll levels, and substantially increases the welfare gains from tolling, although the proportional advantage of step tolls over flat tolls is lower than if congestion is the only externality. The individual welfare-distributional effects of tolling vary strongly with residential and workplace locations relative to the cordon, and also differ for the upwind and downwind sides of the city. |
| Keywords: | congestion, dynamic traffic simulation, emissions, pollution dispersion, tolls |
| JEL: | R4 K32 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ema:worpap:2022-02&r= |
| By: | Luiz de Mello; João Tovar Jalles |
| Abstract: | Attitudes towards the environment have evolved over the years around the world, in part due to growing awareness among the population of the challenges posed by climate change. The decentralisation of policymaking, administrative and political responsibilities to the subnational levels of administration may also have played a part to the extent that creates room for bottom-up policy experimentation and citizen participation in policy design, including in areas related to the environment, that may influence people’s preferences and attitudes. To shed light on these linkages, this paper provides both individual-level survey-based and aggregate cross-country empirical evidence. Individual-level analysis based on data from the World Values Survey shows that decentralisation contributes to more favourable attitudes to the environment, controlling for personal and household characteristics of respondents, as well as country and cohort effects. Country-level analysis based on national accounts data shows that decentralisation is associated with higher government spending on environment-related programmes, as well as higher collection of environmental taxes in the advanced economies, controlling for conventional public finance covariates. |
| Keywords: | decentralisation, environment, public finances, regional autonomy. |
| JEL: | H11 H23 H77 Q58 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:ise:remwps:wp02152022&r= |
| By: | Cremer, Helmuth; Lozachmeur, Jean-Marie; Borsenberger, Claire; Joram, Denis; Malavolti, Estelle |
| Abstract: | We study how consumers’ environmental awareness (CEA) affects the design of environmental policy in the e-commerce sector. We also examine if there is a need for regulation requiring delivery operators to reveal their emissions. We consider a model with two retailers who sell a differentiated product and two parcel delivery operators. Delivery generates CO2 emissions and their total level creates a global (atmosphere) externality. We assume that it is more expensive for the delivery operator to use less polluting technologies. We consider different scenarios reflecting the type of competition and the vertical structure of the industry. We shown that CEA mitigates the inefficiency of the equilibrium by bringing the level of emissions closer to its optimal level. This is true under perfect and imperfect competition. This efficiency enhancing effect of CEA also affects the design of emissions taxes, which leads to an amended Pigouvian rule. Under perfect competition the tax is reduced by exactly the level of CEA expressed in monetary terms. Under imperfect competition the adjustment exceeds this level. |
| Keywords: | Consumers' environmental awareness; Pigouvian rule; emission taxes; e-commerce; parcel delivery operators; vertical integration |
| JEL: | H21 L42 L81 L87 |
| Date: | 2022–03–14 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:126748&r= |
| By: | Jeyhun Mikayilov; Ryan Alyamani; Abdulelah Darandary; Muhammad Javid; Fakhri Hasanov; Saleh T. AlTurki; Rey B. Arnaiz (King Abdullah Petroleum Studies and Research Center) |
| Abstract: | The objective of this study is to investigate Saudi Arabia’s industrial electricity consumption at the regional level. We apply structural time series modeling to annual data over the period of 1990 to 2019. In addition to estimating the size and significance of the price and income elasticities for regional industrial electricity demand, this study projects regional industrial electricity demand up to 2030. This is done using estimated equations and assuming different future values for price and income. The results show that the long-run income and price elasticities of industrial electricity demand vary across regions. The underlying energy demand trend analysis indicates some efficiency improvements in industrial electricity consumption patterns in all regions. |
| Keywords: | Electricity consumption, Electricity demand, Economic Modeling |
| Date: | 2022–01–13 |
| URL: | http://d.repec.org/n?u=RePEc:prc:dpaper:ks--2021-dp19&r= |