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on Energy Economics |
| By: | Nikita Belyak; Steven A. Gabriel; Nikolay Khabarov; Fabricio Oliveira |
| Abstract: | In light of increasing pressure to curb greenhouse gas emissions, many countries have focused on the development of strategies that encourage renewable generation in liberalised energy markets. This paper presents a modelling assessment of a renewable-driven expansion of the transmission system infrastructure that accounts for decentralized energy market settings. The mathematical optimisation problem formulation involves a bi-level model in which a welfare-maximizing transmission system operator makes investments in transmission lines at the upper level while considering power market dynamics at the lower level. To account for deregulated energy market structure, we assume that the generation companies at the lower level make generation capacity investment decisions as price-takers in perfect competition. Considering alternative levels for a transmission infrastructure expansion budget, carbon emission taxes and monetary incentives for renewable generation capacity expansion, we study how alternative compositions of these three factors affect the share of renewable generation in the total generation mix. We apply the proposed modelling assessment to an illustrative three-node instance and a case study considering a simplified representation of the energy system of the Nordic and Baltic countries. The results suggest the limited efficiency of three renewable-driven measures when applied individually. Nevertheless, applied in composition, these three measures demonstrated a positive impact on Nordics' and Baltics' energy system welfare, VRE share and total generation amount. However, the amplitude of this impact differs depending on the composition of values used for three renewable-driven measures. |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2302.10562&r=ene |
| By: | SCHMITZ Andreas (European Commission - JRC); DESPRÉS Jacques |
| Abstract: | This technical report provides a global collection of temporal data of the power sector covering about 60 countries and regions worldwide. This global collection makes available temporal data of electricity load as well as power generation from wind and solar. The temporal data consists of hourly time series and representative daily profiles. This wealth of data can be visualised in interactive data viewers publicly accessible online. The time series for electricity load cover at least a period of one year and up to 10 years. The time series for wind and solar generation span from 2004 to 2018 and are derived from meteorological data provided by satellite reanalysis data. The wind and solar time series are provided for different spatial distributions of generator locations in order to examine the effect of spatial capacity distributions on the time series. The representative daily profiles are calculated based on five different clustering methods. Different shares of wind and solar in the power mix are taken into account according to the 2°C scenario of Global Energy and Climate Outlook 2018 for scenario years 2010 to 2100. As a result, representative daily profiles (electricity load, wind & solar, net load) for almost any country or region of the world are made available for a range of spatial capacity distributions, clustering methods, wind & solar shares and number of representative daily profiles. |
| Keywords: | time series, hourly, solar, wind, electricity load, representative daily profiles, representative days, power generation, power system, residual load, net load, POLES, energy model, energy scenario, GECO, Global Energy and Climate Outlook |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc129563&r=ene |
| By: | Khan, Muhammad Tufail; Imran, Muhammad |
| Abstract: | This study delves into the intricate relationship between carbon dioxide (CO2) emissions and crucial variables in Europe and Central Asia from 1990-2021. By examining the impact of renewable energy, industry value added, foreign direct investment (FDI), gross domestic product (GDP) per capita, and population density on CO2 emissions using the autoregressive distributed lag (ARDL) method, the study uncovers intriguing findings. The study reveals a significant negative correlation between linear per capita income and CO2 emissions in both the short and long run. Moreover, it confirms the inverted N-shaped environmental Kuznets curve (EKC) relationship between the variables. The study further highlights the unfavorable impact of renewable energy and industry value added on CO2 emissions, pointing to the fact that their growth increases CO2 emissions. On the other hand, population density is found to be a vital factor in reducing CO2 emissions. FDI is identified to have a negative and insignificant impact on CO2 emissions, suggesting that it may not be an effective tool for reducing carbon emissions in the region. The insights from this study have significant implications for policymakers in the region to design and implement effective strategies to reduce CO2 emissions. |
| Keywords: | Carbon emissions; Economic growth; Renewable energy; FDI inflows; Industry value added, Population density; ARDL estimator. |
| JEL: | C32 |
| Date: | 2023–01–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:116484&r=ene |
| By: | Afia Malik (Pakistan Institute of Development Economics); Usman Ahmad (Pakistan Institute of Development Economics) |
| Abstract: | Gas is the third-largest energy source consumed around the world. Pakistan has less than a 1 per cent share in world gas consumption. It meets its energy demand through imported and indigenous resources in the ratio of 44:56. Natural gas and imported LNG contribute more than 40 per cent to the country’s current energy mix, including gas resources used in electricity generation. In recent years, the demand for gas has increased rapidly in Pakistan. However, gas exploration and production have declined, and the LNG operational and regulatory framework is weak, leading to a nationwide shortage and increased supply costs. |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:pid:kbrief:2022:83&r=ene |
| By: | Thang Nam Do (Crawford School of Public Policy, Australian National University); Paul J. Burke (Crawford School of Public Policy, Australian National University) |
| Abstract: | At the United Nations Framework Convention on Climate Change 26th Conference of the Parties (COP 26) in November 2021, Vietnam pledged to phase out unabated coal power by the 2040s or as soon as possible thereafter. Achieving this will require major efforts. This study investigates the drivers for Vietnam’s coal power phase-out decision, barriers to Vietnam achieving a successful unabated thermal coal phase out, and potential strategies to achieve the pledge. To this end, a survey of 43 experts from government agencies, research institutions, civil society, and industry was carried out, supplemented by 23 follow-up interviews. The results indicate that ambition to attract international support for green growth initiatives in a context of limited financing options for new coal power projects appears to have been the primary driver for the decision. Key barriers include concerns about electricity shortages and incomplete regulatory frameworks for new clean power options. Recommended strategies include: 1) reforming regulations to facilitate investments in clean energy, electricity transmission, and energy storage; 2) continuing political prioritisation; and 3) building broad-based support from the community and enterprises. Vietnam’s case is relevant to other developing countries and beyond. |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:2301&r=ene |
| By: | Ren\'e A\"id; Annika Kemper; Nizar Touzi |
| Abstract: | We investigate the optimal regulation of energy production reflecting the long-term goals of the Paris Climate Agreement. We analyze the optimal regulatory incentives to foster the development of non-emissive electricity generation when the demand for power is served either by a monopoly or by two competing agents. The regulator wishes to encourage green investments to limit carbon emissions, while simultaneously reducing intermittency of the total energy production. We find that the regulation of a competitive market is more efficient than the one of the monopoly as measured with the certainty equivalent of the Principal's value function. This higher efficiency is achieved thanks to a higher degree of freedom of the incentive mechanisms which involves cross-subsidies between firms. A numerical study quantifies the impact of the designed second-best contract in both market structures compared to the business-as-usual scenario. In addition, we expand the monopolistic and competitive setup to a more general class of tractable Principal-Multi-Agent incentives problems when both the drift and the volatility of a multi-dimensional diffusion process can be controlled by the Agents. We follow the resolution methodology of Cvitani\'c et al. (2018) in an extended linear quadratic setting with exponential utilities and a multi-dimensional state process of Ornstein-Uhlenbeck type. We provide closed-form expression of the second-best contracts. In particular, we show that they are in rebate form involving time-dependent prices of each state-variable. |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2302.12167&r=ene |
| By: | Pedro I. Hancevic (CIDE/Universidad Panamericana); Hector H. Sandoval (Bureau of Economic and Business Research) |
| Abstract: | We analyze the determinants of adoption of distributed solar photovoltaic systems, focusing on small and medium-sized commercial and service firms. We make use of monthly billing data that is perfectly matched with data from the ENCENRE-2019 –a novel survey that gathers data on electricity consumption, stock of electric equipment, and a rich set of firm characteristics in the Metropolitan Area of Aguascalientes, Mexico. Using an econometric model, we find evidence that a set of explanatory variables such as business characteristics, the economic sector, ownership status, stock and usage of equipment and appliances, presence of other solartechnologies, and views about the use of renewable energy are important determinants of the probability of adoption of solar panel systems. Furthermore, using machine learning methods to identify the best predictors of solar adoption, we indirectly validate the theory-driven empirical model by assessing a large set of explanatory variables and selecting a subset of these variables. In addition, we investigate relevant cases where a priory solar panel adoption seems to be costeffective but structural adoption barriers and adoption gaps might coexist for certain groups of electricity users. We also calculate the social cost savings and the avoided CO2 emissions. Finally, based on our results, we provide several policy implications and recommendations. |
| Keywords: | small and medium-sized enterprises (SMEs), distributed photovoltaic generation, electricity consumption, technology adoption, Mexico |
| JEL: | D22 O14 Q40 Q53 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:aoz:wpaper:222&r=ene |
| By: | Nicolas Guichard,; Christian de Gromard,; Jérémy Gasc,; Étienne Espagne,; Martin Buchsenschutz,; Benoît Gars,; Laetitia Labaute. |
| Abstract: | Despite its abundant solar resources, Africa currently has low solar photovoltaic (PV) power generation capacities compared to other continents. Yet, the International Renewable Energy Agency (IRENA) projects a scale-up in coming years, with a sharp increase in the rate of construction of grid-connected PV power plants to align with the Paris Agreement pathways and the Sustainable Development Goals (SDGs). |
| Keywords: | Afrique |
| JEL: | Q |
| Date: | 2023–02–28 |
| URL: | http://d.repec.org/n?u=RePEc:avg:wpaper:en14823&r=ene |
| By: | Timothy Fitzgerald; Casey B. Mulligan |
| Abstract: | Advocates in several countries have promoted a “green recovery” from the pandemic, with an emphasis on measures to address climate objectives. We evaluate proposals for the United States and find that as stated, ambitious plans to further cut emissions from transportation and electricity will require more inputs to produce the same outputs, resulting in recurring costs of up to $483 billion per year. We forecast that real GDP and consumption will be 2-3 percent less in the long run if policies are implemented as stated, underscoring the opportunity costs of achieving green objectives when resources might be more efficiently deployed. |
| JEL: | Q40 Q48 Q54 Q58 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30956&r=ene |
| By: | Jacquelyn Pless |
| Abstract: | More than 1, 500 organizations and investors representing over $40 trillion in assets have committed to fossil fuel divestment to combat climate change. Will it work? This chapter explores whether divestment might induce green innovation, a critical component of transitioning to a cleaner economy. Divestment could theoretically steer innovation by increasing the cost of capital for "dirty firms, " but it is unclear whether the effects will be large enough to significantly reduce investment opportunities. I argue that continuing to invest in dirty industries could drive green innovation conditional on investors being socially-conscious and governing through "voice." This hinges upon understanding which firm strategies actually foster green innovation, though, and the commonly-used ESG indicators come with several limitations. I demonstrate how decomposing them and using alternative approaches to measuring environmental performance can improve investment, strategy, and management decision-making and policy design. I examine the relationship between 14 specific practices and whether large firms in 16 pollution-intensive sectors are on track for meeting the Paris Agreement emissions targets ("carbon performance"). I find no correlation between carbon performance and the most basic practices, like disclosing emissions, but a positive correlation for five more explicit strategies: setting long-term quantitative emissions targets, having a third party verify emissions data, incorporating environmental performance into executive remuneration policies, supporting governmental climate change efforts, and setting an internal price of carbon. I construct a new best practices score based on these results and find that it has a much higher correlation with carbon performance than some other composite measures. |
| JEL: | G30 O32 O35 Q4 Q5 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30942&r=ene |
| By: | Adam Michael Bauer; Cristian Proistosescu; Gernot Wagner |
| Abstract: | We develop a financial-economic model for carbon pricing with an explicit representation of decision making under risk and uncertainty that is consistent with the Intergovernmental Panel on Climate Change’s sixth assessment report. We find that this approach provides economic support for the warming targets in the Paris Agreement across a variety of specifications. We show that risk associated with high damages in the long term leads to stringent mitigation of carbon dioxide emissions in the near term. Our results provide insight into how a systematic incorporation of climate-related risk influences ‘optimal’ emissions abatement pathways. |
| Keywords: | climate risk, asset pricing, cost of carbon |
| JEL: | G00 G12 Q51 Q54 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10278&r=ene |
| By: | Navarro, Adoracion M. |
| Abstract: | Nuclear energy remains a promising option for the Philippines. But as the International Atomic Energy Agency (IAEA) has reiterated, deciding to use nuclear energy is a long-term commitment and one that should consider a time frame of 100 years from construction to decommissioning and waste disposal or storage. Thus, it would do well for the Philippines to follow the IAEA's Milestones Approach and for every government administration to be consistent in seeking progress through this approach. As a demonstration of understanding the commitment involved in nuclear energy development, the positive national position adopted by the Duterte administration may have to be confirmed and reinforced by the Marcos Jr. administration by issuing a fresh mandate to the inter-agency committee for the nuclear energy program and by setting new targets and timetable for the requirements that remain unaddressed. The Philippines also needs to ratify the past international legal instruments it signed. The existing legal framework in the Philippines for nuclear energy development and regulation also needs to be updated. On the Bataan Nuclear Power Plant (BNPP), the decision on whether to rehabilitate it must be guided by project economics. Aside from the huge cost, the biggest hurdle in rehabilitating the BNPP is that the government is no longer allowed under the Electric Power Industry Reform Act to engage in power generation except for missionary electrification. Suppose the project economics of BNPP rehabilitation, or a new nuclear power plant at the same site with flexible dispatchability, would prove that this is worth undertaking. In that case, it is better to attract the private sector to the project economics of it through incentives rather than the government directly making the investments and competing in the generation sector. Lastly, the prospects for nuclear energy development in the Philippines must not only be well argued before policymakers but also be convincingly communicated to the general public. Comments to this paper are welcome within 60 days from the date of posting. Email publications@pids.gov.ph. |
| Keywords: | nuclear energy;nuclear power;Bataan Nuclear Power Plant;nuclear safety;generation mix;clean energy;energy transition |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:phd:dpaper:dp_2022-61&r=ene |
| By: | Bah, Muhammad Maladoh (University of Basel) |
| Abstract: | Since 2017, several U.S. states have put in place out-of-market financial support schemes for nuclear power plants operating in deregulated electricity markets. In late 2021, the federal government announced the introduction of two new support schemes to secure the continued operation of nuclear power plants. This policy paper evaluates the profitability of state subsidized nuclear plants in the NYISO and PJM markets over a five-year period between 2017 and 2021. Results indicate that apart from 2019, nuclear power plants were financially robust, relying solely on market revenues without the need for state support schemes. More importantly, the recent upswing in competitive electricity market prices suggests that additional federal-level support schemes are not economically justified in the current market conditions. I provide several suggestions to reconfigure the support schemes to reflect dynamic market conditions and ensure only vulnerable plants are granted out-of-market support. |
| Keywords: | nuclear support schemes, electricity market, excess profit, NYISO, PJM |
| JEL: | H71 Q41 Q48 |
| Date: | 2023–02–28 |
| URL: | http://d.repec.org/n?u=RePEc:bsl:wpaper:2023/05&r=ene |
| By: | Hélène Ollivier (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Geoffrey Barrows (CREST - Centre de Recherche en Economie et Statistique [Bruz] - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz], X - École polytechnique) |
| Abstract: | With asymmetric climate policies, regulation in one country can be undercut by missions growth in another. Previous research finds evidence that regulation erodes the competitiveness of domestic firms and leads to higher imports, but increased imports need not imply increased emissions if domestic sales are jointly determined with export sales or if emission intensity of manufacturing adjusts endogenously to foreign demand. In this paper, we estimate for the first time how production and emissions of manufacturing firms in one country respond to foreign demand shocks in trading partner markets. Using a panel of large Indian manufacturers and an instrumental variable strategy, we find that foreign demand growth leads to higher exports, domestic sales, production, and CO2 emissions, and slightly lower emission intensity. The results imply that a representative exporter facing the average observed foreign demand growth over the period 1995-2011 would have increased CO2 emissions by 1.39% annually as a result of foreign demand growth, which translates into 6.69% total increase in CO2 emissions from Indian manufacturing over the period. Breaking down emission intensity reduction into component channels, we find some evidence of product-mix effects, but fail to reject the null of no change in technology. Back of the envelope calculations indicate that environmental regulation that doubles energy prices world-wide (except in India) would only increase CO2 emissions from India by 1.5%. Thus, while leakage fears are legitimate, the magnitude appears fairly small in the context of India. |
| Keywords: | Globalization, Trade and environment, Product mix, Technological change |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-03029861&r=ene |
| By: | Wu, Lei; Lu, Shen; Chen, Yinong |
| Abstract: | Electric power transmission expansion planning (TEP), which involves identifying the areas where the existing transmission infrastructure is inadequate, determining the optimal locations and routes for new transmission lines and substations, and evaluating each option in detail. TEP is important for ensuring the reliable and cost-effective delivery of electricity to consumers, and it requires consideration of technical, economic, environmental, and social factors. In this paper, we briefly compare different TEP models, while addressing the advantages and disadvantages of each approach. |
| Keywords: | power system planning, transmission expansion planning, optimization models |
| JEL: | Q4 |
| Date: | 2022–02–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:116494&r=ene |
| By: | Johannes Stangl; Andr\'as Borsos; Christian Diem; Tobias Reisch; Stefan Thurner |
| Abstract: | A rapid decarbonization of the economy requires a massive reconfiguration of its underlying production networks. To reduce emissions significantly, many firms need to change production processes, which has major impacts on practically all supply chains. This restructuring process might cause considerable social distress, e.g. in the form of unemployment, if companies have to close down. Here, we use a unique dataset of the entire firm-level production network of a European economy and develop a network-theory-based measure to estimate the systemic social relevance of every single firm. It enables us to estimate the expected direct and indirect job losses in the supply chain triggered by every firm's default. For the largest CO2 emitting firms we link this measure of social relevance to their emissions. We identify firms with low social relevance and high emissions as potential decarbonization leverage points. We compare various decarbonization strategies by simultaneously capturing the social and environmental impact under the assumption that specific sets of firms would no longer produce. We find that a strategy based on the identified decarbonization leverage points could lead to a 20% reduction of CO2 emissions while putting 2% of jobs at risk. In contrast, targeting the largest emitters first, without considering their social relevance, results in 33% of jobs being at risk for comparable emission savings. Our results indicate that supply-chain sensitive CO2 taxation might reduce the social costs of the green transition considerably. |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2302.08987&r=ene |
| By: | Stefano Basilico (University of Bremen, Faculty of Business Studies and Economics, and Gran Sasso Science Institute, Social Sciences); Nils Grashof (Friedrich Schiller University Jena, Faculty of Economics and Business Administration) |
| Abstract: | Green innovations aim to improve and reduce the environmental impact of economic activities. Thus far, research focus on the positive trajectories of green transition. Recent studies focus also on the speed of transition and on its effects on economic outcomes. Continuing in this direction we focus on brown regions (i.e. specialized in fossil-fuel technologies) and the challenges that they face to become sustainable. Taking as example German Labour Market Regions we identify brown regions and measure their transition using an innovative approach based on Social Network Analysis and Knowledge Spaces. We find that the earlier a region transitioned to green technologies, the better it is for both its social and economic outcomes. Our findings imply that the transition of brown regions has effects on socio-economic outcomes not yet accounted for in the sustainability transition literature. |
| Keywords: | green transition, green technologies, knowledge spaces, network embeddedness, socio-economic development |
| JEL: | O32 O33 R11 |
| Date: | 2023–03–09 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2023-003&r=ene |
| By: | Flavio M. Menezes (Australian Institute for Business and Economics, University of Queensland, Brisbane, Australia); Jorge Pereira (School of Economics, University of Queensland, Brisbane, Australia) |
| Abstract: | This paper investigates the conditions under which the design of an emissions tax can align social and private interests. Our contribution is to determine the general conditions for firms' profits and social welfare to be higher under the implementation of an emissions tax than under no tax. We consider n firms producing an homogeneous product and competing over supply schedules, which covers a continuum of imperfect competition equilibria from Bertrand to Cournot. We show that, as competition intensifies, the pass-through of the tax to consumers increases, to a point where the price rises more than offsets the net result of the investment outlay. Our analysis provides new insights into the trade-off between environmental policy, market competition and the so-called "win-win" outcome for firms and society. |
| Keywords: | Technology; R&D; Environment; Policy; Emission tax; Subsidy; Porter Hypothesis |
| JEL: | H23 O32 O38 Q55 Q58 |
| Date: | 2023–02–28 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uqaibe:2&r=ene |
| By: | Manh-Hung Nguyen (TSE-R - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Chon van Le (VNU-HCM - Vietnam National University - Ho Chi Minh City); Scott Atkinson (University of Georgia [USA]) |
| Abstract: | The paper investigates the production inefficiency of the US electricity industry in the wake of restructuring and emission reduction regulations. |
| Keywords: | Technical inefficiency, Electricity industry, Restructuring, Emissions |
| Date: | 2022–11–24 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03980818&r=ene |
| By: | Rene Aid; Anupama Kowli; Ankur A. Kulkarni |
| Abstract: | Utilities and transmission system operators (TSO) around the world implement demand response programs for reducing electricity consumption by sending information on the state of balance between supply demand to end-use consumers. We construct a Bayesian persuasion model to analyse such demand response programs. Using a simple model consisting of two time steps for contract signing and invoking, and two states of the state of generation, we analyse the relation between the pricing of electricity and the incentives of the TSO to garble information about the true state of the generation. We show that if the electricity is priced at its marginal cost of production, the TSO has no incentive to lie and always tells the truth. On the other hand, we provide conditions where overpricing of electricity leads the TSO to provide no information to the consumer. |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2302.12770&r=ene |
| By: | Domenico Depalo (Bank of Italy, Labor Market Department); Alessandro Palma (Gran Sasso Science Institute (GSSI) & CEIS, Università di Roma ‘Tor Vergata’) |
| Abstract: | We estimate the effect of air pollution on work-related accidents using administrative data from Italy in a setting characterized by strict air pollution and work safety regulations. To address the potential endogeneity due to unobserved productivity shifts and firm-specific pollution sources, we use winter heating rules in highly urbanized areas as a exogenous sources of variation in pollution exposure. We find that a one unit increase in PM10 causes 0.014 additional accidents and 0.0013 additional disabilities. We also explore the theoretical implications of these findings in a setting where firms are risk carriers and fully bear the compensation costs of less severe accidents. We empirically confirm that firms have an incentive to deploy defensive investments also when the risk of accidents derives from external factors, as in the case of air quality. Our back-of-the-enveloped calculation shows that each additional unit in PM10 concentration would increase the total cost of an accident by about 1.7%. |
| Keywords: | air pollution, workplace safety, work accidents, IV, winter heating |
| JEL: | I18 J28 J81 Q51 Q53 |
| Date: | 2023–02–25 |
| URL: | http://d.repec.org/n?u=RePEc:rtv:ceisrp:554&r=ene |
| By: | Laura Cerami; Mr. Domenico Fanizza |
| Abstract: | This paper proposes a market solution to enhance the role of the financial sector in the green transition. Developing a secondary market for “brown exposures” can allow banks to dispose more quickly of stranded assets thereby increasing their capacity to finance green investments. Furthermore, newly created instruments – the brown assets backed securities (B-ABS) - can expand the diversification opportunities for specialized green investors and, thus, attract additional resources for new green investments. The experience of the secondary market for non-performing loans suggests that targeted policy and regulatory measures can simultaneously support the development of the secondary market for brown assets and green finance. |
| Keywords: | Green finance; financial innovation; greenium; financial sector; climate change; market solution; experience of the secondary market; green transition; policy simulation; Climate finance; Nonperforming loans; Securities markets; Climate policy; Global; Europe |
| Date: | 2023–01–20 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2023/011&r=ene |
| By: | Jean-Henry Ferrasse (M2P2 - Laboratoire de Mécanique, Modélisation et Procédés Propres - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Nandeeta Neerunjun (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique, M2P2 - Laboratoire de Mécanique, Modélisation et Procédés Propres - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Hubert Stahn (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | We analyze the integration of intermittent renewables-based technologies into an electricity mix comprising of conventional energy. Intermittency is modeled by a contingent electricity market and we introduce demand-side flexibility through the retailing structure. Retailers propose diversified electricity contracts at different prices, but in an insufficient number to cover intermittent production. These delivery contracts are modeled similarly to numeraire assets. We study the competitive equilibrium of the state-contingent wholesale electricity markets and the delivery contract markets. We also provide an analysis linking the delivery contracts to social welfare. Finally, we discuss the conditions under which changing the delivery contracts improve penetration of renewables and increases welfare. These provide useful insights for managing intermittency and achieving renewable capacity objectives. |
| Keywords: | Electricity markets, Renewables, Intermittency, Incomplete markets |
| Date: | 2022–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03979827&r=ene |
| By: | Adrian Fernandez-Perez (AUT - Auckland University of Technology); Ana-Maria Fuertes (Bayes Business School); Joelle Miffre (Audencia Business School) |
| Abstract: | This paper sheds light on the negative pricing of the May 2020 WTI futures contract (CLK20) on April 20, 2020. The super contango of early 2020, triggered by COVID-19 lockdowns and geopolitical tensions, incentivized cash and carry (C&C) traders to be long CLK20 and short distant contracts, while simultaneously booking storage at Cushing. Our investigation reveals that C&C arbitrage largely contributed to the lack of storage capacity at Cushing in April 2020 and the price crash relates to the reversing trades of many long CLK20 traders without pre-booked storage. Additional aggravating factors included a liquidity crush, staggering margin calls and potential price distortions due to the trade-at-settlement mechanism. The analysis suggests that claims from experts that hold index trackers responsible for the crash are unwarranted: Index trackers did not trigger the negative pricing, nor widen the futures-spot spread by rolling their positions to more distant contracts ahead of maturity. |
| Keywords: | WTI crude oil futures contract, Negative price, Contango, Cash and carry, Index trackers, Disinformation |
| Date: | 2023–01–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03933797&r=ene |
| By: | Hlongwane, Nyiko Worship; Daw, Olebogeng David; Sithole, Mixo Sweetness |
| Abstract: | The study analysed renewable electricity generation and government expenditure on economic growth of South Africa and Botswana. The study utilizes time series data from 1980 to 2021 collected from the World Bank and International Energy. The study performed the DF-GLS and PP unit root test, ARDL Bounds tests and related diagnostics tests. Empirical evidence revealed that renewable electricity generation has a favourable impact in South Africa and a detrimental effect in Botswana on economic growth. The study only found long run relationship between the variables in South Africa with the aid of the bounds test results. Related policies were given in the study based on statistical evidence. |
| Keywords: | Renewable Electricity Generation Government Expenditure Economic Growth South Africa Botswana |
| JEL: | O4 Q4 Q42 |
| Date: | 2023–01–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:116497&r=ene |
| By: | Miriam Fritzsche; Nikolaus Wolf |
| Abstract: | Fossil fuels have shaped the European economy since the industrial revolution. In this paper, we analyse the effect of coal and oil on long-run economic growth, exploiting variation at the level of European NUTS-2 and NUTS-3 regions over the last century. We show that an “oil invasion†in the early 1960s turned regional coal abundance from a blessing into a curse, using new detailed data on carboniferous strata as an instrument. Moreover, we show that human capital accumulation was the key mechanism behind this reversal of fortune. Not only did former coal regions fail to accumulate sufficient levels of human capital, but pre-industrial human capital helped declining regions to reinvent themselves. Without sufficient human capital, fossil fuels did never generate sustainable growth. |
| Keywords: | Coal, Oil Invasion, Education, Reinvention, Economic Growth |
| JEL: | O13 Q32 N13 R10 I25 |
| Date: | 2022–11–29 |
| URL: | http://d.repec.org/n?u=RePEc:bdp:dpaper:0003&r=ene |
| By: | Sebastian VALDECANTOS |
| Abstract: | This paper explores the tensions that the transition toward a zero-carbon economy entails forcountries relying on natural resources exploitation as the main drivers of (net) exports, as is the case of most South American economies. Given their relatively low diversification and high technology gaps compared to advanced economies, attaining higher prosperity levels driven by sustained economic growth has recurrently been hampered by balance of payments crises. Using a simple long-run demand-led theoretical model with balance of payments constrained growth we show that if the structural limitations in their productive structure are not overcome, the decarbonization of the economy, be it exogenously imposed by the rest of the world or sovereignly decided by each South American country, will be exposed to the dilemma of increasing growth or reducing greenhouse gas emissions. Underpinning this dilemma is the essential role of exports and their associated carbon intensity. Finally, we show that to solve this green transition dilemma, even a process of structural change like the one proposed by the old Latin American structuralist school might not be sufficient – it is only through a “big environmental push” that the long-lastingly desired prosperity of South American countries can cease to be an impossible quest. |
| Keywords: | Amérique latine |
| JEL: | Q |
| Date: | 2023–02–28 |
| URL: | http://d.repec.org/n?u=RePEc:avg:wpaper:en15195&r=ene |
| By: | Breckenfelder, Johannes; Maćkowiak, Bartosz; Marqués-Ibáñez, David; Olovsson, Conny; Popov, Alexander; Porcellacchia, Davide; Schepens, Glenn |
| Abstract: | Climate change and the public policies to arrest it are and will continue reshaping the global economy. This Discussion Paper draws on economic research to identify some key medium- and long-run economic implications of these developments. It explores implications for growth, innovation, inflation, financial markets, fiscal policy, and several socio-economic outcomes. The main message that emerges is that climate change will cause income divergence across individuals, sectors, and regions, adjustment in energy markets, increased inflation variability, financial markets stress, intensified innovation, increased migration, and rising public debt. These challenges appear manageable for EU member states, especially under an early and orderly transition scenario. At the same time, the direction, scope, and speed of economic transformation is subject to large uncertainty due to two separate factors: the wide range of climate scenarios for a given trajectory of greenhouse gas emissions and the exact policy path governments choose, especially in the context of the ongoing Russian aggression in Ukraine. JEL Classification: D6, E3, F2, G2, O1, Q5 |
| Keywords: | climate change, financial markets, growth, inflation, socio-economic implications |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20232793&r=ene |
| By: | Hafez Ghanem |
| Abstract: | Humanity is losing the climate battle, and existing international institutions are not delivering on climate change. Hence, there is a need for a new international institution that would be a repository for global knowledge on climate change, and would advise governments on climate policies, develop green projects across the Global South, mobilize financing for those projects, and support project implementation. The proposed Green Bank would be different from existing multilateral development banks: (1) it would include private shareholders as well as governments; (2) voting rights would be organized so that countries of the Global South would have the same voice as countries of the Global North and private shareholders; and (3) it would only finance green projects which could be national, regional, or global. The Green Bank would primarily support private green investments through equity contributions, loans, and guarantees. It could also support public investments by using grants to buy-down the interest on other multilateral development bank loans that finance projects that support adaptation to climate change. The Loss and Damage Fund agreed at COP27 could be the source of those grants. This proposal builds on the Bridgetown Initiative, with the aim of mobilizing private funding, in addition to the public trust fund that the initiative proposes. The Green Bank would partner with other institutions and complement the work of existing multilateral development banks, and of specialized funds. |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:ocp:ppaper:pb06-23&r=ene |
| By: | Noam Angrist; Kevin Winseck; Harry A. Patrinos; Joshua S. Graff Zivin |
| Abstract: | Addressing climate change requires individual behavior change and voter support for pro-climate policies, yet surprisingly little is known about how to achieve these outcomes. In this paper, we estimate causal effects of additional education on pro-climate outcomes using new compulsory schooling law data across 16 European countries. We analyze effects on pro-climate beliefs, behaviors, policy preferences, and novel data on voting for green parties – a particularly consequential outcome to combat climate change. Results show a year of education increases pro-climate beliefs, behaviors, most policy preferences, and green voting, with voting gains equivalent to a substantial 35% increase. |
| JEL: | D72 H41 I20 I28 P16 Q01 Q5 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31000&r=ene |
| By: | KITANO Taiju |
| Abstract: | Vehicle scrappage programs (SPs) have been a common policy tool to replace aged and/or fuel-inefficient vehicles with fuel-efficient ones, recently adopted to make national vehicle fleets greener. This study evaluates the impacts of the SPs by examining the Japanese private passenger vehicle market in which the government allocated the second-largest program expenditure during the financial crisis. The evaluation is conducted based on the structural model of oligopolistic competition in the presence of the SP, which is estimated using market-level sales, price, and attribute data for each car model from FY2006 to FY2009. To conduct the structural analysis, this study develops a simple method to estimate the demand side in the presence of the SP, which incorporates data on aggregate program outcomes such as the program expenditure in the estimation of the discrete choice models. Given the estimates of the structural model, I simulate counterfactual outcomes under alternative SP designs and discuss program designs that could cost-effectively improve the environmental quality of vehicle fleets, considering the welfare and fiscal stimulus impacts. |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:23014&r=ene |
| By: | Ronzheimer, Ira Nadine; Durán Lima, José Elías; Budnevich, Cristóbal; Gomies, Matthew |
| Abstract: | En este documento, elaborado en el marco de un proyecto de colaboración entre la Comisión Económica para América Latina y el Caribe (CEPAL) y la Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), se presenta una metodología para desagregar los autobuses eléctricos y convencionales en sus distintas piezas, con el fin de analizar los flujos de comercio internacional de los componentes relacionados con la electromovilidad. Los vectores desarrollados se basan en la edición de 2017 de la nomenclatura del Sistema Armonizado de Designación y Codificación de Mercancías (SA) e incluyen todas las partes necesarias para construir autobuses eléctricos convencionales (diésel). Esta metodología contribuye a medir la proporción del comercio internacional relacionada con dichas partes en tres niveles: materias primas, partes elaboradas y partes semielaboradas. La desagregación permite, además, reconstruir las cadenas globales de valor de los autobuses eléctricos y determinar cuáles son los proveedores de insumos clave en los tres niveles. La metodología puede emplearse también para estimar el potencial de integración productiva en la fabricación de autobuses en América Latina y el Caribe. |
| Keywords: | TRANSPORTE, ENERGIA ELECTRICA, COMERCIO INTERNACIONAL, AUTOBUSES, INNOVACIONES TECNOLOGICAS, RECICLAJE, COSTOS, POLITICA COMERCIAL, TRANSPORT, ELECTRIC POWER, INTERNATIONAL TRADE, BUSES, TECHNOLOGICAL INNOVATIONS, RECYCLING, COSTS, TRADE POLICY |
| Date: | 2022–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col022:48598&r=ene |
| By: | Nathalie Touratier-Muller (ESC PAU - Ecole Supérieure de Commerce, Pau Business School); Karim Machat (LIREM - Laboratoire de Recherche en Management (LIREM) - UPPA - Université de Pau et des Pays de l'Adour); Jacques Jaussaud (TREE - Transitions Energétiques et Environnementales - UPPA - Université de Pau et des Pays de l'Adour - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This article explores the behaviour of small- and medium-sized enterprises (SMEs) regarding mandatory and voluntary measures established by the French government to reduce carbon dioxide (CO2) emissions generated by freight transport operations. Through semi-structured interviews with fourteen SMEs (five shippers, eight carriers and a consultant) located throughout France, this research examines the integration of sustainable development into organizational and decision-making practices since the introduction of these programmes on the French territory. Our qualitative study suggests that active environmental implications stem mainly from the company's internal dynamics, driven by its management, as well as end customers' expectations. The voluntary policies seem to appeal more to SMEs than the mandatory measures implemented since 2013. This research shows that the carriers surveyed are highly environmentally proactive, regardless of their size. It also sheds light on techniques that could increase the efficiency and widespread adoption of governmental measures, in particular through the increasing use of on-board telematics. |
| Abstract: | Cet article explore le comportement des petites et moyennes entreprises (PME) suite aux dispositifs obligatoires et volontaires mis en place par le gouvernement français pour réduire les émissions de CO2 générées par le transport de marchandises. Grâce à des entretiens semi-directifs réalisés auprès de quatorze entreprises réparties sur le territoire français (cinq chargeurs, huit transporteurs et un consultant), nous examinons la prise en compte du développement durable dans les pratiques organisationnelles et décisionnelles des PME depuis l'apparition de ces dispositifs. Notre étude qualitative suggère que les implications environnementales actives découlent principalement de la dynamique interne de l'entreprise, pilotée par sa direction, ainsi que des attentes des clients finaux. Ce sont les démarches volontaires qui semblent séduire davantage les PME par rapport aux dispositifs obligatoires mis en place depuis 2013. Nous identifions une forte proactivité environnementale des transporteurs interrogés, quelle que soit leur taille. Notre travail apporte également un éclairage sur les techniques qui permettraient d'accroître l'efficacité et l'adoption des dispositifs gouvernementaux, notamment via une utilisation croissante de la télématique embarquée. |
| Keywords: | Sustainable transport, government programmes, freight transport, SME, CO2 emissions reduction, Transport durable, dispositifs gouvernementaux, transport de fret, PME, réduction des émissions de CO2 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03691089&r=ene |
| By: | Afaf Zarkik |
| Abstract: | This year, the Conference of the Parties (COP27) will be held in in Sharm el-Sheikh, Egypt. On the outset of this auspicious occasion, it is befitting to reflect upon contemporary climate adaptation and mitigation policies, from a southern and African point of view. Indeed, climate change is one of the stickiest policy problems of the 21st century, because it is inherently a global and multidimensional problem entailing a bundle of policy features. Following the consecutives shocks to the global economy caused by fossil fuels, the timing has never been better to melt the polarization around climate change politics and propose innovative solutions to surf the uncertainty and complexity of this intractable policy problem. |
| Date: | 2022–11 |
| URL: | http://d.repec.org/n?u=RePEc:ocp:ppaper:pb63-22&r=ene |
| By: | Rim Berahab |
| Abstract: | Les fluctuations que connaissent les marchés de l'énergie depuis le début de la pandémie de la Covid-19 en 2019/2020 se sont prolongées, avec une incertitude sans précédent, sur l'approvisionnement énergétique mondial, qui s'est développée au cours de 2022 Ã la suite de l'invasion de l'Ukraine par la Russie, dans un contexte d'affaiblissement de la macroéconomie et d'inflation élevée. Alors que certains voyaient en ce contexte un risque de ralentissement de la transition énergétique, d’autres y ont vu une opportunité pour s’affranchir des énergies fossiles et accélérer le développement des technologies propres. Ce Policy Brief explore cinq tendances récentes qui sont susceptibles de façonner la transformation du système énergétique en 2023 et met l’accent sur les enjeux des technologies propres qui seront nécessaires pour accélérer la transition vers un avenir plus vert. |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:ocp:ppaper:pb04-23&r=ene |
| By: | Yves Jégourel |
| Abstract: | Le cuivre est assureÌ ment le meÌ tal de la transition eÌ nergeÌ tique, preÌ sent dans l’ensemble des systeÌ€mes permettant la deÌ carbonation de notre monde, du veÌ hicule eÌ lectrique aux infrastructures eÌ nergeÌ tiques. Alors que ses reÌ serves minieÌ€res sont limiteÌ es, que sa demande devrait eÌ‚tre deÌ multiplieÌ e au cours des deux prochaines deÌ cennies et que les volumes provenant du recyclage interrogent encore, le meÌ tal rouge semble devoir offrir aux entreprises et aux pays producteurs des lendemains treÌ€s favorables. AÌ€ long terme, aÌ€ tout le moins, car les cours du cuivre ont chanceleÌ en 2022 en raison de leur forte exposition aÌ€ la demande chinoise, elle-meÌ‚me bien incertaine. Les perspectives macroeÌ conomiques n’eÌ tant gueÌ€re favorables pour 2023, un rebond semble bien improbable mais, soumis aux quatre vents de la geÌ opolitique et de l’eÌ conomie, le monde des matieÌ€res premieÌ€res peut reÌ server bien des surprises ! |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:ocp:ppaper:pb03-23&r=ene |
| By: | Mounia Boucetta |
| Abstract: | Le marcheÌ de l’hydrogeÌ€ne vert1 est appeleÌ aÌ€ connaitre de grands bouleversements dans les anneÌ es aÌ€ venir avec l’eÌ mergence de nouveaux acteurs de la transition eÌ nergeÌ tique. NeÌ anmoins, ce marcheÌ est encore tributaire du deÌ veloppement de la demande, de la baisse des couÌ‚ts de production, de transport et de stockage, du deÌ veloppement d’une chaiÌ‚ne logistique treÌ€s compeÌ titive et de la mise en place de cadre juridique et reÌ€glementaire approprieÌ . |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:ocp:ppaper:pb01-23&r=ene |
| By: | Bardt, Hubertus |
| Abstract: | Nordrhein-Westfalen ist wie Gesamtdeutschland in einer wirtschaftlichen Krisensituation. Schon im ersten Halbjahr 2022 war das Wirtschaftswachstum leicht unter dem Bundestrend, ähnlich zur Situation der anderen großen Flächenländer. Die Einschätzungen der Unternehmen sind für das Jahr 2023 von Pessimismus geprägt. Insbesondere die zukünftige Investitionstätigkeit wird stark negativ eingeschätzt, deutlich schlechter noch als im Bundesdurchschnitt. Die Landespolitik ist neben der Begleitung kurzfristiger Unterstützungsmaßnahmen vor allem bei der Verbesserung der Investitionsbedingungen gefordert, um die Basis für zukünftige Produktion und zugleich für die notwendige Dekarbonisierung am Standort NRW zu ermöglichen. |
| JEL: | R11 O4 Q43 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwkrep:62023&r=ene |
| By: | Liu, Ziheng (University of Wisconsin-Madison); Chen, Xi (Yale University); Lu, Qinan (University of Wisconsin-Madison) |
| Abstract: | In light of the low public awareness of ozone pollution and the potential health threats posed by long-term ozone exposure, this study estimates the causal effect of long-term ozone exposure on respiratory mortality. By employing an instrumental variable based on the long-distance transmission of ozone from upwind neighbor counties, we discover that an increase of one standard deviation in the average concentrations of ozone in the preceding five years increases respiratory mortality by 0.062–0.066 standard deviations. The findings indicate that long-term ozone exposure increases mortality from both acute and chronic respiratory diseases and has significant adverse effects on vulnerable groups. Furthermore, we discover that the respiratory mortality rate responds to long-term ozone exposure nonlinearly, and that there is a critical threshold at which the adverse effects of ozone exposure commence. Our bootstrap simulation results suggest that if ozone concentrations in the preceding five years decrease by 10 percent, 11, 391 deaths from respiratory diseases could be avoided in the United States annually, with resulting health benefits valued at around $106.85–113.67 billion. Our further estimates suggest that, consistent with general respiratory diseases, long-term ozone exposure also contributes to deaths from COVID-19 during the pandemic. |
| Keywords: | long-term exposure, ozone, respiratory diseases, nonlinear responses, health benefits, COVID-19 |
| JEL: | I15 J14 Q51 Q53 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15981&r=ene |
| By: | Tajul Masron (School of Management, Universiti Sains Malaysia); Mduduzi Biyase (College of Business and Economics, School of Economics, University of Johannesburg); Talent Zwane (College of Business and Economics, School of Economics, University of Johannesburg); Thomas Udimal (Southwest forestry University); Frederich Kirsten (College of Business and Economics, School of Economics, University of Johannesburg) |
| Abstract: | This study investigates the relationship between ecological footprint and health outcomes in E7 countries from 1990 to 2017. The study makes use of panel fully modified ordinary least square (FMOLS) and dynamic ordinary least square (DOLS) models to assess the relationship between the ecological footprint and health outcomes. Although the findings show that ecological footprint has a positive effect on life expectancy, implying that the current levels of ecological footprints support life expectancy, failure to strictly observe the level of ecological footprint in the long run may result in a negative impact on life expectancy. Therefore, a more serious efforts and strategies are needed to keep the size of ecological footprints to be favorable to human life. |
| Keywords: | Ecological footprint, CO2, CH4, N2O, life expectancy, mortality, E7 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ady:wpaper:edwrg-07-2023&r=ene |
| By: | Hensen, Julia |
| Abstract: | Beim Kauf von Haushaltsgeräten ist der Verbraucher mit vielen Entscheidungskriterien konfrontiert. Um die Kaufentscheidung stärker auf Energieeffizienz zu lenken, gibt es seit einigen Monaten ein neues EU-Label für bestimmte Produktgruppen. Studien zeigen jedoch, dass die Energieeffizienz der Geräte in der Kaufentscheidung eine untergeordnete Rolle einnimmt und der Anschaffungspreis übermäßig Berücksichtigung findet. Kann die Neuskalierung der EU-Label Abhilfe schaffen? |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwkkur:112023&r=ene |
| By: | Catherine Wolfram; Edward Miguel; Eric Hsu; Susanna B. Berkouwer |
| Abstract: | There is limited causal evidence on the effects of different public procurement regulations on project quality and value-for-money for projects funded by national governments and foreign aid donors. This paper uses policy and experimental variation to study how two key contracting features—namely, contract bundling and monitoring—affect outcomes of a large economic development project. We leverage an unusual feature of Kenya’s nationwide electrification program: the quasi-random allocation of multilateral funding sources across nearby villages. African Development Bank (AfDB) projects used bundled contracts while the World Bank (WB) employed unbundled contracts together with strengthened inspections. To measure impacts, we collect on-the-ground engineering assessments, power quality data, household surveys, and analyze original contracts. The analysis suggests a stark trade-off: WB procedures delayed construction completion by 16 months relative to AfDB sites but improved construction quality by a sizeable 0.6 standard deviations. To disentangle the effects of contract bundling versus monitoring, we conducted randomized audits that enhanced monitoring. The audits improve household connectivity, network size, and voltage at AfDB sites, but have no impact at WB sites, suggesting monitoring and unbundling contracts may be substitutes. Given the apparent trade-off, we investigate how net benefits depend on policymaker time preferences and infrastructure longevity. |
| JEL: | D73 F35 H5 L94 O19 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30948&r=ene |