nep-ene New Economics Papers
on Energy Economics
Issue of 2023‒02‒06
forty-two papers chosen by
Roger Fouquet
London School of Economics

  1. Democracy, economic development and low carbon energy: When and why does democratization promote energy transition? By Clulow, Z.; Reiner, D.
  2. Fuel poverty in Queensland: horizontal and vertical impacts of the 2022 energy crisis By Simshauser, P.
  3. Net Zero Saudi Arabia: How Green Can the Oil Kingdom Get? By Krane, J.
  4. Investigating the Effects of Environmental and Energy Policies in Turkey Using an Energy Disaggregated CGE Model By Ali Bayar; Dizem Ertac Varoglu
  5. A Broader Perspective on the Inflationary Effects of Energy Price Shocks By Lutz Kilian; Xiaoqing Zhou
  6. Managerial and financial barriers during the green transition By De Haas, Ralph; Martin, Ralf; Muûls, Mirabelle; Schweiger, Helena
  7. Transformation to a Renewable Electricity System in Austria. Insights from an Integrated Model Analysis By Claudia Kettner; Michael Böheim; Mark Sommer; Robert Gaugl; Udo Bachhiesl; Lia Gruber; Thomas Florian Klatzer; Sonja Wogrin; Kurt Kratena
  8. Taxes and Subsidies in EU Energy Policy – Fit for 55? By Claudia Kettner; Eva Wretschitsch
  9. Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing By Walid Matar; Doaa Filali
  10. How effective has the electricity social rate been in reducing energy poverty in Spain? By Lisa Bagnoli; Salvador Bertoméu-Sánchez
  11. Real-Time Pricing and the Cost of Clean Power By Imelda; Mathias Fripp; Michael J. Roberts
  12. Who Pays for Higher Carbon Prices? Illustration for Lithuania and a Research Agenda By Immervoll, Herwig; Linden, Jules; O'Donoghue, Cathal; Sologon, Denisa Maria
  13. The preferential treatment of green bonds By Giovanardi, Francesco; Kaldorf, Matthias; Radke, Lucas; Wicknig, Florian
  14. Final assessment report. Assessment of development account project 1819 AH: regional observatory on sustainable energy for Latin America and the Caribbean region By -
  15. The Role of Firm Dynamics in the Green Transition: Carbon Productivity Decomposition in Finnish Manufacturing By Kuosmanen, Natalia; Maczulskij, Terhi
  16. Carbon Pricing in Shipping By ITF
  17. Local Inequities in the Relative Production of and Exposure to Vehicular Air Pollution in Los Angeles By Geoff Boeing; Yougeng Lu; Clemens Pilgram
  18. The sunshine state: implications from mass rooftop solar PV take-up rates in Queensland By Simshauser, P.; Nelson, T.; Gilmore, J.
  19. International Spillover Effects of Air Pollution: Evidence from Mortality and Health Data By Seonmin Will Heo; Koichiro Ito; Rao Kotamarthi
  20. RRF 2.0: A Permanent EU Investment Fund in the Context of the Energy Crisis, Climate Change and EU Fiscal Rules By Philipp Heimberger; Andreas Lichtenberger
  21. Understanding the Global Drivers of Inflation:How Important are Oil Prices? By Jongrim Ha; M. Ayhan Kose; Franziska Ohnsorge; Hakan Yilmazkuday
  22. Assessing the Potential Impacts of Toll Discounts on Zero-Emission Vehicle Adoption By Davis, Adam W; Stark, Joshua; Garcia Sanchez, Juan Carlos
  23. Frequency markets and the problem of pre-dictability By Hameed, Z.; Pollitt, M.; Kattuman, P.; Træholt, C.
  24. Disparities in Pollution Capitalization Rates: The Role of Direct and Systemic Discrimination By Joshua S. Graff Zivin; Gregor Singer
  25. Mobilizing innovation policy in the pursuit of net zero emissions: An evolutionary perspective By Jan Fagerberg
  26. Greenhouse gases emissions: estimating corporate non-reported emissions using interpretable machine learning By Jeremi Assael; Thibaut Heurtebize; Laurent Carlier; François Soupé
  27. Oil & Gas Induced Economic Fluctuations and Self-Employment By Bulent Unel; Gregory B. Upton Jr.
  28. Denying the benefits of the Energy Charter Treaty: Shifting the policy or just the burden of proof? By Baltag, Crina
  29. Impacts of E-bike Ownership on Travel Behavior: Evidence from three Northern California rebate programs By Johnson, Nicholas; Fitch-Polse, Dillon; Handy, Susan
  30. Advancing climate-change goals: From reactive to proactive systemic integration By Chaisse, Julien; Solanki, Arjun
  31. Green Transmission: Monetary Policy in the Age of ESG By Patozi, A.
  32. Knowledge spillovers from clean and emerging technologies in the UK By Martin, Ralf; Verhoeven, Dennis
  33. Marktdesign für die Gasmangellage By Axel Ockenfels
  34. The financial behavior of households in the face of climate change By Nandrasa, Tiava
  35. La croissance verte est-elle durable et compatible avec l’économie circulaire ? Une approche par l’identité IPAT By Florian Fizaine
  36. Huella de Carbono del Turismo en Bolivia By Valeria Revilla Calderón
  37. Demand Management for Sustainable Supply Chain Operations By Agatz, N.A.H.; Fleischmann, M.
  38. Potential trade implications of Latin America and the Caribbean’s climate commitments under the Paris Agreement By Saalfield, Jon
  39. Angola: a vital but constrained transformation of the economic model in the run-up to the 2022 elections ? By Benoît Jonveaux
  40. Individuelle Bereitschaft zum Klimaschutz: Sind die Menschen in Deutschland bereit, aktiv etwas gegen den Klimawandel zu tun? Wovon hängt diese Bereitschaft ab? By Armin Falk; Mark Fallak; Lasse Stötzer
  41. Condition-based maintenance in hydroelectric plants: A systematic literature review By Barbosa de Santis, Rodrigo; Silveira Gontijo, Tiago; Azevedo Costa, Marcelo
  42. Got "critical minerals"? Hooray! But be careful! By Wells, Louis T.

  1. By: Clulow, Z.; Reiner, D.
    Abstract: Despite the growing consensus surrounding the need to decarbonize power for meeting the ambitious temperature target set out in the 2015 Paris Agreement, the share of low-carbon energy sources in the overall energy mix varies significantly across countries and over time. We evaluate the influence of democracy on clean energy transition by studying national solar, wind, hydro and nuclear energy shares of total energy use for electricity generation from 1980 to 2020. Using data from the Varieties of Democracy, Freedom House and Polity IV democracy indices, International Energy Agency Extended Energy Balances and Summary Statistics and World Bank World Development Indicators, we conduct a large-N study of the emissions levels of 135 countries. This article develops existing understandings about the relationship between democracy and energy transition by employing a more sophisticated – hierarchical – research design to determine whether: (i) democracy continues to be an important driver of low-carbon energy use once country-level clustering is accounted for, (ii) fluctuations in the democratic attributes of domestic political regimes have uniform effects across countries and (iii), if so, economic development plays a role in shaping the effect of democracy within individual countries. The results suggest that, even after controlling for country-level clustering and other putative drivers of energy portfolios, democracy has a significant effect on the low-carbon energy sources examined here. A second-order regression of country-specific democracy effects estimated by our hierarchical model provides robust evidence that economic development plays an important role in shaping the effect of democracy within individual countries: Strikingly, democratic spells (of increased democratic institutions and processes) in advanced economies tend to inhibit solar, wind and hydro energy, but promote nuclear energy use, while having the opposite effects (promoting solar, wind and hydro and inhibiting nuclear shares) in emerging economies.
    Keywords: renewable energy, solar, wind, hydro, geothermal, nuclear, energy transition, decarbonization, democracy, electricity generation, energy mix, economic development
    JEL: N7 O13 P18 P28 P48 Q42 Q43 Q48
    Date: 2023–01–12
  2. By: Simshauser, P.
    Abstract: In 2022, wholesale prices in Australia’s National Electricity Market (NEM) rose to $225/MWh, up from $75/MWh a year earlier. The war in Ukraine led to a global tightening of coal and gas markets, and the effects were felt acutely by the NEM’s marginal coal- and gas-fired plants given tight links to seaborne prices. Household electricity tariffs are set for the financial year ahead but the wholesale cost element is built-up over the preceding three-year period, in line with forward hedging practices of prudent energy retailers. Consequently, households have been shielded from 2022 spot market dynamics in 2021/22 tariff determinations. However, by 2023/24 the impacts of wholesale price rises will be impounded into retail tariffs. In this article, fuel poverty in the Queensland region of the NEM is examined over three distinct periods, 2015/16, 2021/22 and 2023/24. These periods coincide with high (2015/16), low (2021/22) and expected high (2023/24) residential electricity tariffs. Results reveal an underlying level of fuel poverty in Queensland at 8.1% of households in 2015/16, falling to 6.8% in 2021/22 and rising to at least 10.0% in 2023/24. Queensland’s hardship policy unwinds these results by 1.6, 1.1 and 2.9 percentage points, respectively. 2023/24 tariff increases overwhelm existing hardship policy settings although policy performance operates as an automatic stabiliser, rising in effectiveness as price rises.
    Keywords: Fuel poverty, policy targeting efficiency, electricity prices.
    JEL: D4 L5 L9 Q4
    Date: 2023–01–12
  3. By: Krane, J.
    Abstract: Saudi Arabia’s stated goal of reaching net zero by 2060 puts the kingdom in a paradoxical position. The Saudi leadership proposes to decarbonize an oil-intensive society and economy while selling oil to the world. As such, the credibility of the Saudi commitment will remain an open question until concrete progress toward restructuring the kingdom’s energy system is demonstrated. Modest initial steps toward net zero include investments in renewables alongside pricing reforms of energy products and services. Another ongoing push involves oil-to-gas switching in the kingdom’s power sector, which can be augmented by carbon capture and storage and, eventually, gas-to-hydrogen substitution. Doubts and difficulties aside, Saudi Arabia holds major advantages in decarbonization. These include unused land with copious solar radiation, as well as geological storage near carbon emissions clusters. The kingdom is also equipped with relevant knowledge and investment capital. Fully compensating for reduced oil export rents may not be possible if worldwide carbon neutrality plans come to fruition. Despite the short-term benefits of high energy prices after the Russian invasion of Ukraine, economic and geopolitical decline is a likely medium-term outcome for the kingdom. However, there are also opportunities including replacing oil revenues with those arising from carbon disposal for countries and firms lacking the kingdom’s competitive advantages.
    Keywords: Saudi Arabia, Net Zero 2060, decarbonization, oil and natural gas, Saudi Aramco, greenhouse gas (GHG), carbon dioxide (CO2), emissions offsets, renewables, hydrogen, energy subsidy reform, carbon intensity, carbon capture and storage (CCS), emissions clusters, credible commitment, Paris Agreement NDC, climate pledge, peak oil demand, Scope 1, 2 and 3 emissions
    JEL: Q01 Q4 P16 P18 Q32 Q35 Q38 Q54 Q58 H23
    Date: 2023–01–12
  4. By: Ali Bayar (EcoMod); Dizem Ertac Varoglu (EcoMod and Near East University)
    Abstract: This article investigates environmental and energy policies that Turkey needs to adopt on its way to a sustainable development path. A multi-sectoral CGE model is developed to analyze the effects of several environmental and energy policy scenarios available for the Turkish economy to attain a low-carbon society with a reduced reliance on fossil fuel imports. Domestic energy demand has significantly increased in Turkey over the past decades, and this has put a lot of pressure on policymakers as the economy greatly depends on imports of natural gas and oil as far as current energy consumption is concerned. The CGE model used in this study is based on an energy-disaggregated Social Accounting Matrix (SAM), constructed in previous work by the authors. The energy-disaggregated SAM serves as the benchmark database and the high disaggregation of the energy commodities and the electricity sector to include 8 different types of power generating sectors (5 of which are renewable energy sources) enables electric power substitution in the model. The energy-disaggregated SAM is further linked with satellite accounts which include data on derived energy demand and greenhouse gas (GHG) emissions. The macroeconomic and environmental impacts of three distinct sets of scenarios are analyzed with respect to the baseline scenario. The first scenario simulates a 30% increase in energy efficiency in the production sectors and the residential sector and evidence is found for reaching the 21% GHG mitigation target set in Turkey’s pledge for Paris Agreement compliance by 2030. The second set of scenarios is the inclusion of a medium and high-level carbon tax rates for coal, oil and natural gas. The carbon tax scenarios produce significant effects on both emission reduction targets and substituting fossil fuel technologies with cleaner energy technologies. The third scenario estimates the effects of changes in world prices of energy on the Turkish economy. A 20% increase in world energy prices, i.e. oil, natural gas, and coal, induces substantial changes in the breakdown of TPES and the power-generating sector and puts a lot of pressure on the current account deficit of the country. A carbon tax policy proves to be the most viable scenario which leads to reduced energy intensities in all sectors, a 21% GHG emissions abatement, and a transformation of the energy sector towards having a low-carbon content along with a reduced reliance on fossil fuel imports.
    Date: 2022–12–20
  5. By: Lutz Kilian; Xiaoqing Zhou
    Abstract: Consumers purchase energy in many forms. Sometimes energy goods are consumed directly, for instance, in the form of gasoline used to operate a vehicle, electricity to light a home or natural gas to heat a home. At other times, the cost of energy is embodied in the prices of goods and services that consumers buy, say when purchasing an airline ticket or when buying online garden furniture made from plastic to be delivered by mail. Previous research has focused on quantifying the pass-through of the price of crude oil or the price of motor gasoline to U.S. inflation. Neither approach accounts for the fact that percent changes in refined product prices need not be proportionate to the percent change in the price of oil, that not all energy is derived from oil and that the correlation of price shocks across energy markets is far from one. This paper develops a vector autoregressive model that quantifies the joint impact of shocks to several energy prices on headline and core CPI inflation. Our analysis confirms that focusing on gasoline price shocks alone will underestimate the inflationary pressures emanating from the energy sector, but not enough to overturn the conclusion that much of the observed increase in headline inflation in 2021 and 2022 reflected non-energy price shocks.
    Keywords: headline inflation; core inflation; goods; services; oil; gasoline; diesel; natural gas; electricity
    JEL: E31 E52 Q43
    Date: 2022–12–21
  6. By: De Haas, Ralph; Martin, Ralf; Muûls, Mirabelle; Schweiger, Helena
    Abstract: We use data on 10, 852 firms across 22 emerging markets to analyse how credit constraints and deficient firm management inhibit corporate investment in green technologies. For identification, we exploit quasi-exogenous variation in local credit conditions. Our results indicate that both credit constraints and green managerial constraints slow down firm investment in more energy efficient and less polluting technologies. Complementary analysis of data from the European Pollutant Release and Transfer Register (E-PRTR) reveals the pollution impact of these constraints. We show that in areas where more firms are credit constrained and weakly managed, industrial facilities systematically emit more CO2 and other gases. This is corroborated by the finding that in areas where banks needed to deleverage more after the Global Financial Crisis, industrial facilities subsequently reduced their carbon emissions considerably less. On aggregate this kept CO2 emissions 5.6% above the level they would have been in the absence of credit constraints.
    Keywords: credit constraints; green management; CO2 emissions; energy efficiency
    JEL: L23 G32 L20 Q52 Q53
    Date: 2022–03–07
  7. By: Claudia Kettner; Michael Böheim (WIFO); Mark Sommer (Austrian Institute of Economic Research); Robert Gaugl; Udo Bachhiesl; Lia Gruber; Thomas Florian Klatzer; Sonja Wogrin; Kurt Kratena
    Abstract: We analyse the (techno- and macro-)economic and distributive effects of a transformation to a renewable electricity system in Austria by 2030, as stipulated by the Austrian government. For the analysis, the macroeconomic model DYNK and ATLANTIS, a partial model of the electricity market, were expanded and linked. Four transformation scenarios conforming with the 100 percent renewable electricity target in Austria on a national balance are examined, integrated into a consistent scenario for the development of the European electricity system. Additionally, sensitivity analyses with respect to the gas price are performed. Although all scenarios achieve 100 percent RES-E on a national balance, the analysis shows that electricity from gas-fired power plants will still be needed in 2030 to balance variable renewable generation, to avoid grid congestion, and for heat generation from combined heat and power plants in winter months. Another main conclusion from the simulations is that the transition towards a renewable electricity sector is almost neutral from a socio-economic perspective. It does neither reveal harmful impacts nor lead to high multiplier effects from additional investment. With high natural gas prices in the sensitivity scenarios a decrease in GDP and household income, which might motivate redistributive policies, can be observed.
    Keywords: Renewable electricity, Austria, Model linkage, Macroeconomic model, Electricity system model
    Date: 2023–01–10
  8. By: Claudia Kettner; Eva Wretschitsch (WIFO)
    Abstract: In the "Fit for 55" package of July 2021, the European Commission proposed inter alia a revision of the energy taxation directive with the intent of increasing tax rates for fossil fuels that should contribute to achieving the EU's emission reduction targets for 2030. Since then, climate policy challenges in the EU have been amplified by sharp increases in electricity and gas prices mainly as a result of the war in Ukraine. Energy price spikes have led to the implementation of numerous compensation measures for households and firms in EU member countries. In this article, we provide an overview of the discussion on energy taxation in the EU and analyse compensation measures implemented during the energy crisis. We find that energy cost related compensation measures counter climate policy efforts. A stronger focus on vulnerable groups would have reduced the overall costs of measures and entailed stronger energy efficiency incentives.
    Keywords: EU, Energy taxation, Energy cost subsidies, Energy crisis
    Date: 2023–01–13
  9. By: Walid Matar; Doaa Filali (King Abdullah Petroleum Studies and Research Center)
    Abstract: After cement production in Saudi Arabia surged in the first half of the 2010s due to the country’s rapid economic development, it has slowed measurably in recent years as economic growth has declined. This is shown in Figure 1, along with the evolution of the Kingdom’s real gross domestic income (RGDI). Still, it ranks among the top 10 countries for existing cement kiln capacity. The Saudi cement industry has relied on Arab Heavy crude oil, heavy fuel oil (HFO), and natural gas to produce clinker, a key cement ingredient.
    Keywords: Applied general model, Bottom up model, Coal bed methane, Deep water
    Date: 2022–06–23
  10. By: Lisa Bagnoli; Salvador Bertoméu-Sánchez
    Abstract: This paper analyzes the effectiveness of the electricity social rate, the Bono Social de Electricidad, introduced in 2009 in Spain’s electricity market. It is a policy aimed at increasing the affordability of electricity by entailing a discount on prices for vulnerable consumers. Using data from the family budget surveys from 2006 to 2017, we rely on a difference-in-differences approach to measure its causal impact on energy poverty and to further analyze how the introduction of this measure affected the consumption behavior of households. We find that, on average, the introduction of the policy has reduced the likelihood of energy poverty of households eligible for the social rate. Nevertheless, the magnitude of the effect is quite modest as it corresponds in practice to only 59, 000 households that are no longer in energy poverty as a result of the measure. We further show that, in reaction to lower effective prices, households do not increase their consumption of electricity. In other words, the increased affordability did not induce a change in the consumption behavior in terms of quantity purchased but it entirely resulted in a decrease in electricity expenditure.
    Keywords: Electricity; Energy poverty; Policy evaluation; Social rate
    Date: 2022–01–07
  11. By: Imelda (Graduate Institute of International and Development Studies (IHEID)); Mathias Fripp (University of Hawai’i at M¯anoa, University of Hawai’i Economic Research Organization and Renewable Energy and Island Sustainability group); Michael J. Roberts (Department of Economics, University of Hawai’i Economic Research Organization, and Sea Grant College Program)
    Abstract: Solar and wind power are now cheaper than fossil fuels but are intermittent. The extra supply-side variability implies growing benefits of using real-time retail pricing (RTP). We evaluate the potential gains of RTP using a model that jointly solves investment, supply, storage, and demand to obtain a chronologically detailed dynamic equilibrium for the island of Oahu, Hawai’i. We find that RTP reduces costs in high-renewable systems by roughly 6 to 12 times as much as in fossil systems holding demand assumptions fixed, markedly lowering the cost of clean energy integration.
    Keywords: Renewable energy, real-time pricing, storage, demand response, optimization
    JEL: Q41 Q42 Q53
    Date: 2022–08
  12. By: Immervoll, Herwig (OECD); Linden, Jules (LISER (CEPS/INSTEAD)); O'Donoghue, Cathal (National University of Ireland, Galway); Sologon, Denisa Maria (LISER (CEPS/INSTEAD))
    Abstract: This paper lays out an approach, and a research agenda, for assessing the impact of carbon pricing on household budgets, and of possible compensatory government transfers that can be financed through carbon-tax revenues. It relies on a rich set of available data and policy models and combines them in a way that is informative for mapping the gains and losses at the household level in the short term as countries transition to a low-carbon economy. A particular focus is on linking information on carbon emissions and consumption patterns (which is needed for quantifying carbon-tax burdens), with income data and tax-transfer policy models (needed for assessing government policies that aim to cushion or offset carbon-tax burdens). The approach is illustrated for a carbon-tax scenario based on a recent proposal in Lithuania. Results confirm that direct burdens from higher fuel prices fall disproportionately on lower-income households. But indirect effects, from higher prices of goods other than fuel, are sizeable and broadly "flat" across the income distribution, which dampens regressivity. Low-income households are also found to respond more strongly to rising prices, reducing their burdens and, hence, regressivity. The total effect is only mildly regressive. Recycling carbon-tax revenues back to households allows considerable scope for avoiding or cushioning losses for large parts of the population, and existing policy models can be used to design compensation measures that facilitate majority support for carbon tax packages.
    Keywords: carbon tax, climate change, inequality, revenue recycling
    JEL: C8 D12 D31 H23 Q52
    Date: 2023–01
  13. By: Giovanardi, Francesco; Kaldorf, Matthias; Radke, Lucas; Wicknig, Florian
    Abstract: We study the preferential treatment of green bonds in the central bank collateral framework as an environmental policy instrument within a DSGE model with environmental and financial frictions. In the model, green and carbon-emitting conventional firms issue defaultable corporate bonds to banks that use them as collateral. The collateral premium associated to a relaxation in collateral policy induces firms to increase bond issuance, investment, leverage, and default risk. Collateral policy solves a trade-off between increasing collateral supply, adverse effects on firm risk-taking, and subsidizing green investment. Optimal collateral policy is characterized by modest preferential treatment, which increases the green investment share and reduces emissions. However, welfare gains fall well short of what can be achieved with optimal emission taxes. Moreover, due to elevated risk-taking of green firms, preferential treatment is a qualitatively imperfect substitute of Pigouvian taxation on emissions: if and only if the optimal emission tax can not be implemented, optimal collateral policy features preferential treatment of green bonds.
    Keywords: Green Investment, Collateral Framework, Environmental Policy
    JEL: E44 E58 E63 Q58
    Date: 2022
  14. By: -
    Date: 2022–05
  15. By: Kuosmanen, Natalia (ETLA - The Research Institute of the Finnish Economy); Maczulskij, Terhi (ETLA - The Research Institute of the Finnish Economy)
    Abstract: This paper explores the importance of firm dynamics, including entry and exit and the allocation of carbon emissions across firms, on the green transition. Using the 2000–2019 firm-level register data on greenhouse gas emissions matched with the Financial Statement data in the Finnish manufacturing sector, we examine the sources of carbon-productivity growth and assess the relative contributions of structural change and firm dynamics. We find that continuing firms were the main drivers of carbon productivity growth whereas the contribution of entering and exiting firms was negative. In addition, the allocation of emissions across firms appeared to be inefficient, with a negative impact on carbon productivity growth over the study period. Our analysis also revealed a positive relationship between labor-intensive firms and carbon productivity, but firms with a larger market share tended to be less productive in terms of carbon use.
    Keywords: carbon productivity, decomposition analysis, firm dynamics, firm-level data, manufacturing sector
    JEL: D24 L60 Q54
    Date: 2023–01
  16. By: ITF
    Abstract: This report reviews the effectiveness of carbon pricing, how it might be applied to the shipping sector and with what effects. It also evaluates recent proposals by countries to introduce a price on shipping’s carbon emissions and examines related policy issues.
    Date: 2022–12–14
  17. By: Geoff Boeing; Yougeng Lu; Clemens Pilgram
    Abstract: Vehicular air pollution has created an ongoing air quality and public health crisis. Despite growing knowledge of racial injustice in exposure levels, less is known about the relationship between the production of and exposure to such pollution. This study assesses pollution burden by testing whether local populations' vehicular air pollution exposure is proportional to how much they drive. Through a Los Angeles, California case study we examine how this relates to race, ethnicity, and socioeconomic status -- and how these relationships vary across the region. We find that, all else equal, tracts whose residents drive less are exposed to more air pollution, as are tracts with a less-White population. Commuters from majority-White tracts disproportionately drive through non-White tracts, compared to the inverse. Decades of racially-motivated freeway infrastructure planning and residential segregation shape today's disparities in who produces vehicular air pollution and who is exposed to it, but opportunities exist for urban planning and transport policy to mitigate this injustice.
    Date: 2023–01
  18. By: Simshauser, P.; Nelson, T.; Gilmore, J.
    Abstract: One of the most pronounced trends in Australian electricity markets over the past decade has been the rapid take-up rate of rooftop solar PV by households. In this article, we analyse the cause and effects of rooftop solar PV in the NEM’s Queensland region, which has the highest household take-up rate in the world. Initially sparked by a combination of sharply rising electricity tariffs and over-lapping rooftop PV subsidies, economic considerations soon took over. More than 43% of households have a behind-the-meter solar unit. Benefits to participating households are significant, while hidden costs remain for non-participants. Impacts on utilities are mixed, with retail supply businesses most adversely affected. Rooftop PV has displaced ~1500MW of base and peaking plant, equating to ~$3bn investment. Yet despite world-leading rates of rooftop solar, Queensland’s grid-supplied system peak demand continues to rise, albeit shifted to later in the evening.
    Keywords: rooftop solar PV, electricity utilities
    JEL: D25 D80 G32 L51 Q41
    Date: 2023–01–12
  19. By: Seonmin Will Heo; Koichiro Ito; Rao Kotamarthi
    Abstract: We study the international spillover effects of air pollution by developing a framework that integrates recent advances in atmospheric science into econometric estimation with microdata on mortality and health. Combining transboundary particle trajectory data with the universe of individual-level mortality and emergency room visit data in South Korea, we find that transboundary air pollution from China significantly increases mortality and morbidity in South Korea. Using these estimates, we show that a recent Chinese environmental policy “war on pollution” generated a substantial international spillover benefit. Finally, we examine China’s strategic pollution reductions and provide their implications for the potential Coasian bargaining.
    JEL: Q53
    Date: 2023–01
  20. By: Philipp Heimberger (The Vienna Institute for International Economic Studies, wiiw); Andreas Lichtenberger (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: While climate change has long called for a green shift in our economies, the current energy crisis leads to an increased urgency when it comes to transforming the energy and transportation systems. The Recovery and Resilience Facility (RRF), which was adopted to support recovery from the Covid-19 crisis, represents the first large-scale EU-wide investment initiative, including decarbonisation goals. Yet temporary RRF spending will not be sufficient to meet the climate targets in the coming decades, which will require additional public investment equivalent to at least 1% of EU economic output per year. Nor would the reform of EU fiscal rules under consideration enable a sufficient increase in public investment at the national level. What is needed is the establishment of a permanent EU climate and energy investment fund amounting to at least 1% of EU economic output to finance public investment, which could greatly enhance European sovereignty when it comes to ensuring strategic investment at the required scale. National budgets of EU member states would be substantially relieved, allowing governments to take an important step in the green transition while making it more realistic to comply with EU fiscal rules. Investment could also be increasingly directed toward genuinely European projects with EU added value. Such a permanent EU investment fund for climate and energy would not only strengthen the community of EU member states economically and politically from within, but also promote its geostrategic capacity to act.
    Keywords: Investitionen, EU, Europa, Klimawandel, Energiekrise, Finanzierung, RRF 2.0
    JEL: H54 H63 R42
    Date: 2023–01
  21. By: Jongrim Ha; M. Ayhan Kose; Franziska Ohnsorge; Hakan Yilmazkuday
    Abstract: This paper examines the global drivers of inflation in 55 countries over the 1970–2022 period. We estimate a Factor-Augmented Vector Autoregression model for each country and assess the importance of several global (demand, supply, and oil price) and domestic shocks. We report three main results. First, global shocks have explained about 26 percent of inflation variation in a typical economy. Oil price shocks accounted for only about 4 percent of inflation variation, but they had a statistically significant impact on inflation in three quarters of countries. Second, global shocks have become more important in driving inflation variation over time. The share of inflation variance caused by oil price shocks increased from 4 percent prior to 2000 to roughly 9 percent over the 2001–2022 period. They also accounted for some of the steep runup in inflation between mid-2021 and mid-2022. Finally, oil price shocks tended to contribute significantly more to inflation variation in advanced economies; countries with stronger global trade and financial linkages; commodity importers; net energy importers; countries without inflation-targeting regimes; and countries with pegged exchange rate regimes. Our headline results are robust to a wide range of exercises—including alternative measures of global factors and oil prices—and aggregation of countries.
    Keywords: Inflation, oil prices, global shock, domestic shock, FAVAR, exchange rates
    JEL: E31 E32 Q43
    Date: 2023–01
  22. By: Davis, Adam W; Stark, Joshua; Garcia Sanchez, Juan Carlos
    Abstract: Zero-emission vehicles are a central component of plans to eliminate greenhouse gas emissions from California’s transportation sector. Because these vehicles generally have higher purchase prices than conventional vehicles and represent a new technology that many households are hesitant to adopt, it is important to find ways to incentivize the adoption of these vehicles. A range of methods have been tested globally, including monetary incentives and stickers that allow these vehicles to access high-occupancy vehicle lanes. This report assesses the potential use of express lane discounts as a driver of ZEV adoption by testing the effectiveness of a range of discount scenarios. These scenarios are built upon a baseline scenario that incorporates adoption drivers from existing policies and market growth trajectories. This analysis treats the express lane discount as a monetary incentive. The researchers find that providing even very large discounts for express lane usage to zero-emission vehicles would only slightly increase vehicle sales but would make these lanes much less capable of serving their other purposes. As part of this project, an Excel tool was developed that allows users to test their own scenarios. As an alternative to providing toll discounts to owners of new zero-emission vehicles, the authors recommend developing targeted incentives that focus on low-income and disadvantaged communities and are available to households that purchased pre-owned vehicles. View the NCST Project Webpage
    Keywords: Engineering, Social and Behavioral Sciences, managed lanes, zero-emission vehicles, electric vehicles, incentives
    Date: 2023–01–01
  23. By: Hameed, Z.; Pollitt, M.; Kattuman, P.; Træholt, C.
    Abstract: Ancillary services markets (ASMs) are gaining higher importance in renewable-based power systems. They, however, remain less explored than the energy markets (EMs) of different regions. For limited energy units, such as battery energy storage systems (BESSs), it is vital to investigate the relative predictability of the two markets as suitable bidding hours of a less predictable product are more challenging to identify, thus entailing less certain revenues. This paper develops forecast models of the two markets of three Nordic countries – Denmark, Finland, and Norway – to quantify the difference in their predictability. Frequency containment normal reserves (FCR-N) are considered as a case of the Nordic ancillary service product. The dataset of 315648 datapoints contains three years (2019 – 2021) of their hourly FCR-N, and spot market revenues. Generalized additive models (GAMs) are used to develop week-ahead forecasts using smooth curves of hourly and daily patterns. The forecast allows both inter country – between same markets of different countries – and intra country – between different markets of the same country – comparison. The results show that the FCR-N markets of the Nordic countries are less predictable than their respective spot markets except for the case of Denmark due to its fixed hourly volumes. Moreover, the smoothing curves of FCR-N forecast models differ for each Nordic country despite their similar market requirements. This is in contrast to the Nordic spot markets where the smoothing curves indicate similarity in inter-country mar-ket behaviors. Considering market predictability differences in addition to their hourly prices is thus vital for BESS units performing multi-market bidding.
    Keywords: Ancillary services, Spot markets, Forecast, Battery energy storage
    Date: 2023–01–12
  24. By: Joshua S. Graff Zivin; Gregor Singer
    Abstract: We examine how exogenous changes in exposure to air pollution over the past two decades have altered the disparities in home values between Black and White homeowners. We find that air quality capitalization rates are significantly lower for Black homeowners. In fact, they are so much lower that, despite secular reductions in the Black-White pollution exposure gap, disparities in housing values have increased during this period. An exploration of mechanisms suggests that roughly one-quarter of this difference is the result of direct discrimination while the remaining three-quarters can be attributed to systemic discrimination through differential access to complementary amenities.
    JEL: J15 Q53 R31
    Date: 2022–12
  25. By: Jan Fagerberg (Centre for Technology, Innovation and Culture, University of Oslo)
    Abstract: Transforming the economy to a state consistent with net-zero emissions is a very demanding task. Extensive change, i.e., innovation, in the way energy is provided, distributed, and used across all parts of society will be required. An important question, discussed in this paper, is how policy – and particularly innovation policy - can contribute to mobilize innovation for this purpose. It is pointed out that while innovation solves problems (in response to challenges), it also creates novel opportunities that policymakers may exploit to further their aims. The analysis presented in the paper shows that a global green shift, centred on production and use of renewable energy, is - greatly helped by past policies in a few countries - already well underway, and it is argued that this may create very important opportunities for policy makers in their attempts to support (and speed up) the transition. It is concluded that for policy to succeed in its aims, two elements are essential, (1) a broadly supported vision or strategy for change, exploiting the opportunities offered by the global green shift, and (2) a set of projects – or missions – aimed at addressing specific challenges of relevance for the countries in question. However, for such projects or missions to be successful, relevant stakeholders – also outside national boarders – may need to be included, challenging received innovation policy governance.
    Date: 2023–01
  26. By: Jeremi Assael (BNPP CIB GM Lab - BNP Paribas CIB Global Markets Data & AI Lab, MICS - Mathématiques et Informatique pour la Complexité et les Systèmes - CentraleSupélec - Université Paris-Saclay); Thibaut Heurtebize (BNP Paribas Asset Management, Quantitative Research Group, Research Lab); Laurent Carlier (BNPP CIB GM Lab - BNP Paribas CIB Global Markets Data & AI Lab); François Soupé (BNP Paribas Asset Management, Quantitative Research Group, Research Lab)
    Abstract: As of 2022, greenhouse gases (GHG) emissions reporting and auditing are not yet compulsory for all companies and methodologies of measurement and estimation are not unified. We propose a machine learning-based model to estimate scope 1 and scope 2 GHG emissions of companies not reporting them yet. Our model, specifically designed to be transparent and completely adapted to this use case, is able to estimate emissions for a large universe of companies. It shows good out-of-sample global performances as well as good out-of-sample granular performances when evaluating it by sectors, by countries or by revenues buckets. We also compare our results to those of other providers and find our estimates to be more accurate. Thanks to the proposed explainability tools using Shapley values, our model is fully interpretable, the user being able to understand which factors split explain the GHG emissions for each particular company.
    Keywords: sustainability, disclosure, greenhouse gas emissions, machine learning, interpretability, carbon emissions, scope 1, scope 2, interpretable machine learning
    Date: 2022–12–18
  27. By: Bulent Unel; Gregory B. Upton Jr.
    Abstract: We investigate effects of plausibly exogenous variation in the value of oil and natural gas production in local economies on self-employment in the United States. We find that self-employment is procyclical, i.e. self-employment increases during a business cycle expansion and is reduced during a contraction. This effect comes entirely from unincorporated self-employed workers (in lieu of incorporated self-employment). We also find that self-employment explains an economically meaningful share of the employment adjustment; point estimates suggest that approximately 8 to 9 percent of the employment adjustment comes from unincorporated self-employed individuals - a group that makes up about 6 percent of total employment.
    Date: 2021–11
  28. By: Baltag, Crina
    Abstract: This Perspective discusses the proposal under the Energy Charter Treaty reform to move the requirement of investors having "substantial business activity" from Article 17 to the definition of "investor" and proposes possible solutions to clarify how this new provision should be applied in practice.
    Date: 2022
  29. By: Johnson, Nicholas; Fitch-Polse, Dillon; Handy, Susan
    Abstract: E-bike incentive programs are being utilized across the United States to encourage the adoption of active transportation. This study assesses the impacts of three e-bike rebate programs in Northern California using survey results gathered by each agency. Three research questions are answered through this study: “How has e-bike ownership impacted the mode choices, trip purpose, and travel frequency of our sample?”, “How much do e-bike rebate recipients reduce their mobile greenhouse gases (GHGs)?”, and “How did the design of each program impact who was able to participate and the program outcomes?”. To answer these, the research team merged and cleaned the survey data from the three programs, explored descriptive statistics, and undertook an estimation of GHG emissions reductions. This analysis highlighted changes in travel behavior, car travel replacement, the impact of program designs, and various equity impacts. E-bike recipients reported more regular bike use after getting their e-bike, although their frequency of bike travel began to decline in the long-term. Respondents also reported high rates of occasional car trip replacement (1-3 times per week and 1-3 times per month). The vast majority of e-bike use in the sample was for recreational travel. Although the GHG reductions analysis estimated a monthly diversion of 12-44 kilograms of CO2 per rebate participant. The authors conclude with an equity analysis that explores how program design influenced who participated in these rebate programs. This found that low-income requirements are successful at targeting those with the most need for financial assistance, though these requirements do not help meet other equity metrics by association. View the NCST Project Webpage
    Keywords: Social and Behavioral Sciences, Bicycling behavior, e-bike, rebate, VMT
    Date: 2023–01–01
  30. By: Chaisse, Julien; Solanki, Arjun
    Abstract: Can countries fulfill their obligations under international environmental agreements in the presence of international investment agreements or vice versa? This Perspective offers recommendations for arbitrators and countries to harmonize their climate goals and investment obligations by moving from a strictly disciplinary view of investment law through the lens of general international law.
    Date: 2022
  31. By: Patozi, A.
    Abstract: In this paper, I investigate how the Net-Zero transition affects the transmission of monetary policy. I first document an upward trend in environmental performance among US publicly listed companies over the last decade. Second, I evaluate the implications of firms becoming ‘greener’ for the transmission of monetary policy on asset prices, credit risk and firm-level investment. In response to a shock to monetary policy, ‘green’ firms (with high environmental scores) are significantly less impacted than their ‘brown’ counterparts (with lower environmental scores). The dependence of monetary policy responses on firm-level greenness is not explained by intrinsic differences in firms’ characteristics. Instead, I show that the heterogeneous response is the result of investors’ preferences for sustainable investing. Using a stylized theoretical framework, I illustrate how incorporating such preferences attenuates the semi-elasticity of ‘green’ asset prices with respect to monetary policy shocks.
    Keywords: Climate Change, ESG, Heterogeneity, Monetary Policy, Sustainable Investing
    JEL: E52 G12 G14 G30
    Date: 2023–01–18
  32. By: Martin, Ralf; Verhoeven, Dennis
    Abstract: The UK government has committed to increase R&D support for clean technologies in an effort to meet its net-zero target by 2050. The opportunity cost of such programs crucially depends on the value of knowledge spillovers that accrue from clean relative to other (emerging) technologies. Using patent information to measure the value of direct and indirect knowledge spillovers, we derive estimates for the expected economic returns of subsidising a particular technology field. Our method allows comparing fields by the returns a hypothetical additional subsidy would have generated within the UK or globally. Clean technologies are top-ranked in terms of within-UK returns, with Tidal and Offshore Wind showing particularly high returns. In terms of global returns, emerging technologies such as Wireless, as well as Electrical Engineering outperform Clean by a small margin. We also find that cross-border knowledge spillovers are important for all technology fields, with global return rates over ten times larger than within-UK ones. In sum, our results suggest that the opportunity cost of R&D support programs for clean innovation in the UK is low at worst.
    Keywords: innovation; knowledge spillovers; clean technology; innovation policy; patent data
    JEL: R14 J01 J1
    Date: 2022–03–02
  33. By: Axel Ockenfels (University of Cologne)
    Abstract: Bisher ist unklar, wer wie viel Gas zu welchem Preis in einer Mangellage in Deutschland bekommt, wenn der Regulierer rationieren muss. Dies droht die Anreize in und im Vorfeld einer Mangellage zu verwässern. In diesem Beitrag wird die potenziell hilfreiche Rolle eines Zertifi katsmarktes für die Allokation und Bepreisung in der Mangellage in den Blick genommen.
    Date: 2022–11
  34. By: Nandrasa, Tiava (University of Toliara)
    Abstract: Climate change is requiring behavioral changes in finance. Households that are most impacted by climate change are adopting a financial resilience strategy to cushion the climate shock. Tontine, access to MFIs and VOAMAMI are the preferred ways for vulnerable households to cope. This article first outlines the resilience capacity of households and provides an analysis of the change in behavior of Malagasy households to mitigate the effects of climate change. Keywords: Climate change, Behavior, Tontine, VOAMAMI
    Date: 2022–02–13
  35. By: Florian Fizaine (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc)
    Abstract: The circular economy concept is currently being used in multiple ways. For some academics and organizations circular economy can be identified as a long term goal of achieved green growth while others argue that circular economy is fundamentally different from green growth. In this paper, we explore the conditions allowing green growth to be compatible with the concept of circular economy. Our model explicitly takes into account the possibility of a dematerializing of wealth production and raw material recycling through a green growth framework. We show that the reconciling of green growth with circular economy requires: (i) a fast decrease of the raw material intensity of economy far removed from present and past trajectories, (ii) the absence of a physical limitation to this decrease. This seems to indicate that green growth is essentially different from, and incompatible with the concept of circular economy.
    Abstract: Il existe une forte polysémie derrière l'expression « économie circulaire ». Certains identifient l'économie circulaire comme une forme finale de la croissance verte (croissance économique infinie dans un monde fini). D'autres, au contraire, perçoivent la croissance verte comme le prolongement d'un ancien modèle fondamentalement incompatible avec les limites de la géosphère et donc très différent de l'économie circulaire qui s'inscrit dans un mimétisme écologique. Dans cet article, nous explorons les hypothèses permettant de réconcilier la croissance verte avec l'économie circulaire via la dématérialisation. Nous montrons que la réconciliation de l'économie circulaire et de la croissance verte réclamerait (i) une vitesse de décroissance de l'intensité matérielle de l'économie à des niveaux jamais observés, mais également (ii) une absence de limite physique à cette décroissance. Cela laisse supposer que l'approche de la croissance verte est fondamentalement incompatible avec le concept d'économie circulaire.
    Keywords: sustainable development, decoupling, green growth, circular economy, natural resources, ressources naturelles, développement durable, découplage, croissance verte, économie circulaire
    Date: 2021–07
  36. By: Valeria Revilla Calderón (SDSN Bolivia)
    Abstract: El sector del turismo genera emisiones de GEI a la atmósfera impactando al cambio climático, y a su vez, es considerado como un sector altamente vulnerable a los efectos del cambio climático. A través de este estudio, se realiza una estimación de las emisiones de gases de efecto invernadero generadas por las actividades asociadas al turismo en Bolivia durante la gestión 2019, con el fin de contar con una línea de base y un diagnóstico que permita identificar oportunidades y acciones de mejora para todos los actores involucrados (hoteles, agencias de viaje, turistas, proveedores de servicios, etc.). Los resultados muestran que en la gestión 2019 se habrían generado 338.008 ton CO2eq, emisiones que equivalen a las emisiones que se generan por la deforestación de 749 hectáreas de bosque primario húmedo en Bolivia. La principal fuente de emisión es el transporte aéreo con el 63%, seguido de las emisiones por transporte terrestre con el 22%, las estadías en hoteles, residenciales y alojamientos con el 8%, la alimentación con el 7%, y la generación de residuos con el 0, 24%. En el documento se plantean acciones y lineamientos estratégicos de reducción a ser aplicados en distintos niveles y por diferentes actores.
    Keywords: Cambio climático, Emisiones de GEI, Huella de Carbono, Turismo
    JEL: Q54 Q56 L83
    Date: 2022–10
  37. By: Agatz, N.A.H.; Fleischmann, M.
    Abstract: Supply chain management (SCM) is about fulfilling demand. Based on given estimates of future demand, SCM invests the appropriate resources and then uses these resources to match supply to demand. The traditional SCM perspective takes demand as exogenous. The goal of SCM is then to serve the forecasted or materialized demand effectively and efficiently. How difficult it is to achieve this goal depends on the characteristics of that demand. For example, serving a stable, predictable demand is relatively cheap whereas serving an unpredictable, strongly fluctuating demand may imply less efficient operations characterized by high inventory built-up and low capacity utilization. In the same way, demand characteristics impact not only the financial performance of the supply process but also its environmental impact. For example, satisfying demand for fresh produce during the harvesting season results in lower emissions than serving off- season demand which requires substantial storage and/or long-distance shipments from other growing regions.
    Keywords: supply chain management, SCM, demand management, sustainability, supply chain operations
    Date: 2023–01–21
  38. By: Saalfield, Jon
    Abstract: This paper investigates Latin America and Caribbean (LAC)’s nationally determined contributions (NDCs) and their potential implications for the region’s balance of payments. The first section summarizes prevailing trade dynamics, finding that in LAC, exports of raw materials help to cover the cost of importing capital goods. The second section turns to the region’s NDCs to identify policies affecting import expenditure. The third section employs a similar methodology on the export side, tallying policies affecting output and global cost competitiveness in key sectors (crops, livestock, timber, metals and minerals, manufactured goods, fisheries, and tourism).
    Date: 2022–12–07
  39. By: Benoît Jonveaux
    Abstract: The country is therefore approaching the general elections of August 24, 2022 in a changing economic and political environment. Lourenço, who is running for president, will be able to claim that the economic situation has improved during his term. Indeed, 2021 was marked by a return to growth and comfortable external and fiscal surpluses, and it is expected that this performance will be consolidated in 2022. This improvement is mainly due to the rise in oil prices but also, in part, to the incipient transformation of the Angolan economic model. Between the end of 2018 and the end of 2021, Lourenço’s government brought in many reforms with the support of the International Monetary Fund (IMF). These measures are as much about improving the business climate and fighting corruption as they are about increasing the proportion of national revenue that does not come from oil, controlling public spending, and making the exchange rate more flexible.
    Keywords: Angola
    JEL: E
    Date: 2023–01–09
  40. By: Armin Falk (University of Bonn, briq Institute); Mark Fallak (Institute of Labor Economics); Lasse Stötzer (briq Institute)
    Abstract: Neun von zehn Deutschen sind bereit, für die Rettung des Klimas Kosten auf sich zu nehmen. In einer repräsentativen Umfrage für den briq policy monitor zeigte sich eine breite Mehrheit der Deutschen bereit, einen Teil eines frei verfügbaren Geldbetrags für den Klimaschutz zu spenden. Die Spendenbereitschaft steigt nicht nur mit höherem Einkommen, sondern hängt insbesondere von der altruistischen Disposition sowie der Parteipräferenz ab. Auch beim Konsum und der Mobilität achtet eine große Mehrheit der Deutschen inzwischen auf die Klimafolgen ihrer Entscheidungen.
    Date: 2022–09
  41. By: Barbosa de Santis, Rodrigo; Silveira Gontijo, Tiago; Azevedo Costa, Marcelo
    Abstract: Industrial maintenance has become an essential strategic factor for profit and productivity in industrial systems. In the modern industrial context, condition-based maintenance guides the interventions and repairs according to the machine’s health status, calculated from monitoring variables and using statistical and computational techniques. Although several literature reviews address condition-based maintenance, no study discusses the application of these techniques in the hydroelectric sector, a fundamental source of renewable energy. We conducted a systematic literature review of articles published in the area of condition-based maintenance in the last 10 years. This was followed by quantitative and thematic analyses of the most relevant categories that compose the phases of condition-based maintenance. We identified a research trend in the application of machine learning techniques, both in the diagnosis and the prognosis of the generating unit’s assets, being vibration the most frequently discussed monitoring variable. Finally, there is a vast field to be explored regarding the application of statistical models to estimate the useful life, and hybrid models based on physical models and specialists’ knowledge, of turbine-generators.
    Keywords: Condition based maintenance, hydroelectric, fault diagnostics, fault isolation, fault monitoring, fault prognostics, system health management
    JEL: C0 L6 Z0 Z00
    Date: 2021–07–27
  42. By: Wells, Louis T.
    Abstract: When a country has "critical minerals, " certain issues require special attention in the country's mining legislation or while negotiating contracts with potential mining investors. As well, to obtain maximum benefit the government should prepare for negotiations with investors' home governments, which have strategic interests in these minerals.
    Date: 2022

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