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on Energy Economics |
| By: | Jerry Anunrojwong; Santiago R. Balseiro; Omar Besbes; Bolun Xu |
| Abstract: | Electric power systems are undergoing a major transformation as they integrate intermittent renewable energy sources, and batteries to smooth out variations in renewable energy production. As privately-owned batteries grow from their role as marginal "price-takers" to significant players in the market, a natural question arises: How do batteries operate in electricity markets, and how does the strategic behavior of decentralized batteries distort decisions compared to centralized batteries? We propose an analytically tractable model that captures salient features of the highly complex electricity market. We derive in closed form the resulting battery behavior and generation cost in three operating regimes: (i) no battery, (ii) centralized battery, and (ii) decentralized profit-maximizing battery. We establish that a decentralized battery distorts its discharge decisions in three ways. First, there is quantity withholding, i.e., discharging less than centrally optimal. Second, there is a shift in participation from day-ahead to real-time, i.e., postponing some of its discharge from day-ahead to real-time. Third, there is reduction in real-time responsiveness, or discharging less in response to smoothing real-time demand than centrally optimal. We quantify each of the three forms of distortions in terms of market fundamentals. To illustrate our results, we calibrate our model to Los Angeles and Houston and show that the loss from incentive misalignment could be consequential. |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2406.18685 |
| By: | Julian Radek; Marco Sebastian Breder; Christoph Weber (Chair for Management Sciences and Energy Economics, University of Duisburg-Essen) |
| Abstract: | To ensure sustainable green hydrogen (H2) production, the European Union (EU) has introduced regulatory frameworks, such as the Delegated Act on Renewable Hydrogen. These regulations aim to ensure positive environmental effects through green hydrogen by establishing criteria of additionality, as well as spatial and temporal correlation. However, concerns have arisen among stakeholders regarding the potential barriers these criteria may pose to the growth of the EU hydrogen economy. Our analysis examines the implications of these regulations, analyzing the effects of the criteria on green hydrogen production from a system perspective. By doing that, we can assess the interplay with hydrogen production in European non-EU countries, as well as the role of third country import prices and quantities, while accounting for the EU objective of achieving net zero emissions by 2050. Our findings indicate that the EU hydrogen economy may be substantially affected by restrictive criteria for green hydrogen. Policy makers are therefore advised to carefully assess whether a level playing field can be established and to avoid overly restrictive unilateral measures. |
| Keywords: | Hydrogen economy, Green Hydrogen, Energy market modeling, Regulation |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:dui:wpaper:2402 |
| By: | Wang, Yuhan; Novan, Kevin |
| Keywords: | International Development, Resource/Energy Economics And Policy, Research And Development/ Tech Change/Emerging Technologies |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea22:343621 |
| By: | Opokua Asare (University of Oldenburg, Department of Economics); Laura Schuerer (University of Oldenburg, Department of Economics) |
| Abstract: | While Tanzania’s greenhouse gas emission levels still seem low by international comparison, the country is rapidly carbonizing, and most households still rely on kerosene, charcoal, and firewood for cooking and lighting. Carbon pricing can be an effective tool to discourage the creation of high carbon lock-ins, to generate substantial revenues, and to channel them toward sustainable development. Employing a microsimulation approach that integrates multiregional input-output and household-level data, we examine the distributional impacts of four different carbon pricing designs and five compensation schemes on Tanzanian households. We find that national carbon pricing would have progressive effects but with large horizontal differences. Revenue-financed cash or infrastructure transfers would effectively mitigate adverse impacts on low- and middle-income households. We suggest the use of carbon pricing revenues to provide low-income households with access to renewable energy appliances such as solar lights and solar cookers to empower them through long-term cost and time savings as well as health benefits. This would contribute not only to alleviating poverty but also to achieving Tanzania’s electrification and clean cooking objectives. |
| Keywords: | Climate policy, Carbon pricing, Tax incidence, Distributional effect, Inequality, Sustainable development, Renewable energy, Sub-Saharan Africa, Tanzania |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:old:dpaper:446 |
| By: | Dugoua, Eugenie; Dumas, Marion |
| Abstract: | Significant progress reconciling economic activities with a stable climate requires radical and rapid technological change in multiple sectors. Here, we study the case of the automotive industry’s transition to electric vehicles, which involved choosing between two different technologies: fuel cell electric vehicles (FCEVs) or battery electric vehicles (BEVs). We know very little about the role that such technological uncertainty plays in shaping the strategies of firms, the efficacy of technological and climate policies, and the speed of technological transitions. Here, we explain that the choice between these two technologies posed a global and multisectoral coordination game, due to technological complementarities and the global organization of the industry’s markets and supply chains. We use data on patents, supply-chain relationships, and national policies to document historical trends and industry dynamics for these two technologies. While the industry initially focused on FCEVs, around 2008, the technological paradigm shifted to BEVs. National-level policies had a limited ability to coordinate global players around a type of clean car technology. Instead, exogenous innovation spillovers from outside the automotive sector played a critical role in solving this coordination game in favor of BEVs. Our results suggest that global and cross-sectoral technology policies may be needed to accelerate low-carbon technological change in other sectors, such as shipping or aviation. This enriches the existing theoretical paradigm, which ignores the scale of interdependencies between technologies and firms. |
| Keywords: | energy innovation; electric cars; fuel cells; coordination; low-carbon transitions |
| JEL: | J1 |
| Date: | 2024–06–24 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:124029 |
| By: | Chen, Ze; Cheng, MingDa; Zhou, Xiaohe |
| Keywords: | Health Economics And Policy, Environmental Economics And Policy, Resource/Energy Economics And Policy |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea22:343625 |
| By: | Duy Pham, Son (University of Aberdeen Business School, Dunbar Street, Aberdeen, UK); Do, Hung Xuan (School of Economics and Finance, Massey University, New Zealand); Nepal, Rabindra (Faculty of Business and Law, School of Business, University of Wollongong, Australia); Jamasb, Tooraj (Department of Economics, Copenhagen Business School) |
| Abstract: | The tail risks can exhibit different and important features than average measures of risk in interconnected electricity markets. This paper examines the interconnectedness of tail risks within the regionally interconnected Australian National Electricity Market. We use the Conditional Autoregressive Value-at-Risk (CAViaR) and time-varying parameter vector autoregression (TVP-VAR) connectedness approach. Analysing historical data between 01 January 2006 and 04 February 2024. The results show significant levels of connectedness for both negative and positive tail risks, highlighting the dynamic and interdependent nature of these markets. Notably, we identify asymmetries in the transmission of tail risks and their key drivers, including oil market volatility and global geopolitical risks. Our findings show that some regions play a pivotal role in the risk dynamics across the regions of the network and the influence of energy source diversity on risk profiles. The study underscores the complexity of managing the expected increase in tail risks in interconnected electricity markets, emphasizing the need for adaptive, forward-thinking strategies tailored to evolving global and local conditions. |
| Keywords: | Electricity markets; Tail risk; TVP-VAR connectedness; Australia; CAViaR |
| JEL: | D40 L94 Q43 |
| Date: | 2024–07–02 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:cbsnow:2024_009 |
| By: | Becka Brolinson (Federal Housing Finance Agency); Jessica Shui (Federal Housing Finance Agency); November Wilson (Federal Housing Finance Agency) |
| Abstract: | We estimate residential energy use and CO2 emissions for single-family homes using administrative data from approximately 45 million property appraisals, or 1.8 billion property-month observations. First, we find that from 2013 to 2021, CO2 emissions decreased by 11.5 percent in aggregate in our sample. Emissions from electricity use decreased by 20.8 percent, while emissions from natural gas use for home heating increased by 11 percent over the same time. Second, we estimate that the majority of the decline in CO2 emissions from properties in our sample can be attributed to the greening of US energy generation, rather than changes over time to property-level characteristics. Third, we show that aggregate emissions estimates from the property-level data closely align with aggregate emissions estimates using publicly available state-level data in 2020, providing validation of our approach using property-level data and demonstrating that for aggregate estimates, state-level data is sufficient. |
| Keywords: | energy use, carbon emissions, housing |
| JEL: | Q54 R11 R30 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:hfa:wpaper:24-05 |
| By: | Katarzyna Chec; Bartosz Uniejewski; Rafal Weron |
| Abstract: | Recent studies provide evidence that decomposing the electricity price into the long-term seasonal component (LTSC) and the "residual", predicting both separately, and then combining their forecasts can bring significant accuracy gains in day-ahead electricity price forecasting. However, not much attention has been paid to predicting the LTSC, and the last 24 hourly values of the estimated pattern are typically copied for the target day. To address this gap, we introduce a novel approach which extracts the trend-seasonal pattern from a price series extrapolated using price forecasts for the next 24 hours. Analyzing data from the German and Spanish markets, and considering parsimonious autoregressive and LASSO-estimated models, we find that improvements in predictive accuracy can be as high as 16% over a 5-year test period covering the Covid-19 pandemic, the 2021/2022 energy crisis, and the war in Ukraine. |
| Keywords: | Electricity price forecasting; Long-term seasonal component; Day-ahead market; Combining forecasts |
| JEL: | C22 C51 C53 Q41 Q47 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ahh:wpaper:worms2404 |
| By: | Kai Lessmann; Friedemann Gruner; Matthias Kalkuhl; Ottmar Edenhofer |
| Abstract: | We analyze how conventional emissions trading schemes (ETS) can be modified by introducing ”clean-up certificates” to allow for a phase of net-negative emissions. Clean-up certificates bundle the permission to emit CO2 with the obligation for its removal. We show that demand for such certificates is determined by cost-saving technological progress, the discount rate and the length of the compliance period. Introducing extra clean-up certificates into an existing ETS reduces near-term carbon prices and mitigation efforts. In contrast, substituting ETS allowances with clean-up certificates reduces cumulative emissions without depressing carbon prices or mitigation in the near term. We calibrate our model to the EU ETS and identify reforms where simultaneously (i) ambition levels rise, (ii) climate damages fall, (iii) revenues from carbon prices rise and (iv) carbon prices and aggregate mitigation cost fall. For reducing climate damages, roughly half of the issued clean-up certificates should replace conventional ETS allowances. In the context of the EU ETS, a European Carbon Central Bank could manage the implementation of clean-up certificates and could serve as an enforcement mechanism. |
| JEL: | H23 Q54 Q58 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11167 |
| By: | Rainald Borck; Peter Mulder |
| Abstract: | We study the effect of energy and transport policies on pollution in two developing country cities. We use a quantitative equilibrium model with choice of housing, energy use, residential location, transport mode, and energy technology. Pollution comes from commuting and residential energy use. The model parameters are calibrated to replicate key variables for two developing country cities, Maputo, Mozambique, and Yogyakarta, Indonesia. In the counterfactual simulations, we study how various transport and energy policies affect equilibrium pollution. Policies may be induce rebound effects from increasing residential energy use or switching to high emission modes or locations. In general, these rebound effects tend to be largest for subsidies to public transport or modern residential energy technology. |
| Keywords: | pollution, energy policy, discrete choice, developing country cities |
| JEL: | Q53 Q54 R48 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11152 |
| By: | Elisa Belfiori; Daniel R. Carroll; Sewon Hur |
| Abstract: | We study climate policy in an economy with heterogeneous households, two types of goods (clean and dirty), and a climate externality from the dirty good. Using household expenditure and emissions data, we document that low-income households have higher emissions per dollar spent than high-income households, making a carbon tax regressive. We build a model that captures this fact and study climate policies that are neutral with respect to the income distribution. A central feature of these policies is that resource transfers across consumers are ruled out. We show that the constrained optimal carbon tax in a heterogeneous economy is heterogeneous: Higher-income households face a higher rate. Our main result shows that when the planner is limited to a uniform carbon tax, the tax follows the Pigouvian rule but is lower than the unconstrained carbon tax. Finally, we embed this model into a standard incomplete markets framework to quantify the policy effects on the economy, climate and welfare, and we find a Pareto-improving result. The climate policy is welfare-improving for every consumer. |
| Keywords: | carbon tax; inequality; consumption; welfare; climate change |
| JEL: | D62 H23 Q54 |
| Date: | 2024–07–16 |
| URL: | https://d.repec.org/n?u=RePEc:fip:feddgw:98565 |
| By: | Frondel, Manuel |
| Abstract: | Dieser Beitrag nimmt eine Kosten-Nutzen-Abwägung des Ausbaus der Erneuerbaren-Energietechnologien zur Stromerzeugung in Deutschland vor. Im Ergebnis zeigt sich, dass dieser Ausbau die Stromverbraucher seit Einführung des Erneuerbaren-Energien-Gesetz (EEG) im Jahr 2000 knapp 300 Mrd. Euro gekostet hat. Für die kommenden beiden Jahrzehnte stehen zudem Zahlungsverpflichtungen in ähnlicher Größenordnung bereits fest. Mit dem nach Russlands Angriff auf die Ukraine forcierten Erneuerbaren-Ausbau nimmt die Politik aber noch deutlich über diese rund 600 Milliarden hinaus gehende Kosten in Kauf. Eine Kosten-Nutzen-Analyse ist vor diesem Hintergrund unabdingbar, nicht zuletzt auch deshalb, weil weitere Kosten in dreistelliger Milliardenhöhe nicht in den 600 Milliarden enthalten sind, etwa die Kosten für den ohne Erneuerbare-Expansion nicht in so starkem Maße nötigen Netzausbau. Vor diesem Hintergrund sollte beim weiteren Erneuerbaren-Ausbau streng auf Kostendisziplin geachtet werden, indem die Bundesnetzagentur künftig ausschließlich technologieneutrale, statt technologiespezifischer Ausschreibungen für den Erneuerbaren-Ausbau vornimmt. Dadurch kommen zwar nur die kosteneffizientesten regenerativen Technologien zum Zuge, aber es bleiben im Klima- und Transformationsfonds Spielräume für Zukunftsinvestitionen, die das Wachstumspotential der deutschen Volkswirtschaft stärker beflügeln könnten als der Ausbau der erneuerbaren Energien. Im Gegensatz zu den hohen Kosten nimmt sich der Nutzen des Ausbaus der erneuerbaren Energien bescheiden aus. So belief sich der Anteil der Erneuerbaren am Primärenergieverbrauch im Jahr 2022 auf lediglich rund 17 %. Die Treibhausgasneutralität im Jahr 2045 allein mit Erneuerbaren erreichen zu wollen, erscheint bei einem solch geringen Anteil als eine schwer bewältigbare Herausforderung. |
| Abstract: | This article weighs up the costs and benefits of the expansion of renewable energy technologies for electricity generation in Germany. According to calculations of the German Ministry of Economic Affairs, this expansion has cost electricity consumers almost 300 billion euros since the introduction of the Renewable Energy Sources Act (EEG) in 2000. Moreover, payment obligations of a similar magnitude are already in place for the next two decades. However, with the accelerated expan¬sion of renewables following Russia's attack on Ukraine, politicians are accepting costs well in excess of this approximately 600 billion. Given the costs already incurred, a cost-benefit analysis is imperative, not least because further costs in the three-digit billion range are not included in the 600 billion figure, such as the costs for grid expansion, which would not be necessary to the same extent without the expansion of renewables. Against this backdrop, strict attention should be paid to cost discipline in the further expansion of renewables by ensuring that the Federal Network Agency only issues technology-neutral rather than technology-specific tenders for the expansion of renewables in future. This means that only the most cost-efficient renewable technologies will be installed. Consequently, there will be budgetary scope for future investments that could boost the growth potential of the German economy more than the expansion of renewable energies. Contrasting with the high costs, the benefits of expanding renewable energies are modest. For example, the share of renewables in primary energy consumption in 2022 was only around 17 %. With such a low share, achieving greenhouse gas neutrality in 2045 with renewables alone appears to be a tremendous challenge. |
| Keywords: | Energiewende, Photovoltaik, Wärmewende |
| JEL: | Q21 I38 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:rwimat:300232 |
| By: | Ahmed Mohamed (G2Elab-SYREL - G2Elab-SYstèmes et Réseaux ELectriques - G2ELab - Laboratoire de Génie Electrique de Grenoble - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes, G2ELab - Laboratoire de Génie Electrique de Grenoble - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes); Rémy Rigo-Mariani (G2Elab-SYREL - G2Elab-SYstèmes et Réseaux ELectriques - G2ELab - Laboratoire de Génie Electrique de Grenoble - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes, G2ELab - Laboratoire de Génie Electrique de Grenoble - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes); Vincent Debusschere (Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes); Lionel Pin (Atos Worldgrid [Grenoble]) |
| Abstract: | As renewable energy sources become more prevalent, effective grid balancing becomes crucial due to their inherent uncertainty. Battery Energy Storage Systems (BESS) can enhance grid reliability and efficiency by complementing these variable sources. However, to encourage investments in BESS, market participation must be economically viable for owners. Energy arbitrage is one of the main revenue streams for BESS allowing them to buy electricity when prices are low and sell it when they become higher, thus optimizing the revenues. However, in energy markets such as the Day-Ahead market (DA), the BESS owners submit their bids/offers one day before delivery, without perfect foresight of the future rates. This uncertainty poses a challenge that limits the energy provision capabilities and can incur a loss of profit due to the imperfect price forecast. Tailored strategies are then needed to mitigate those uncertainties and minimize the profit loss. This article proposes different operational planning strategies for a BESS participating in DA. Specific interest is attached to the explainability of the proposed methods to assure high profits while reducing the model's complexity and computational time. The proposed strategies include 1) price forecast and scenario generation, using Geometric Brownian Motion (GBM) based either on a single-point forecast or historical data; 2) optimization process; and 3) choice of a single BESS bidding and operating schedule that is ultimately applied in real-time. Two baselines are introduced, one relying on a back-casting method, and a second based on traditional stochastic optimization. Several studies have neglected to thoroughly assess the bidding strategies by evaluating the profit against the actual prices. Hence, this study assesses the performance of the proposed methods and the baselines relative to the profit obtained in an ideal scenario with a perfect forecast in the French market over 2021 |
| Keywords: | energy markets, energy storage, price uncertainty, optimization, Bidding strategy |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04628352 |
| By: | Gray, Wayne; Linn, Joshua (Resources for the Future); Morgenstern, Richard D. (Resources for the Future) |
| Abstract: | The industrial sector is an increasingly important area of focus for national-level greenhouse gas (GHG) emissions mitigation policies. Modeling specific industrial sector mitigation options requires data to estimate both benchmark emissions in the absence of the policies and marginal abatement costs.Major emitting manufacturing industries in the United States include iron and steel, cement, pulp and paper, petroleum refining, organic chemicals, and nitrogenous fertilizer. These industries use complex production processes, manufacturing a wide array of products involving multiple technologies and inputs. Unlike the power sector, where much of the technical and economic information needed to construct credible models is in the public domain, much of the relevant industry data are proprietary, with limited public access. The most comprehensive industrial data sources for the United States are the Economic Censuses conducted every five years, although the publicly available information is limited.A potential solution to these limitations is via access to the confidential plant-level data collected by the Census Bureau and available to qualified researchers. These data permit examination of the range of emissions from individual plants within an industry as well as changes in those emissions over time. The data from Economic Census years also contain information on physical output quantities for some products manufactured by these industries.This paper reports on our efforts to develop the databases and estimate separate models for each of the six noted industries and includes both descriptive and econometric analyses, along with simulations of alternative policies.The descriptive analysis reveals substantial within-industry heterogeneity in GHG emissions intensity, measured as the ratio of GHG emissions to output. This heterogeneity reflects plant-level differences in technologies, fuels, specific products manufactured, and other factors. In the econometric analysis, energy prices affect energy intensity and profits, and the responsiveness varies substantially across industries. For example, the response of GHG intensity (not total emissions reduction)to changes in fuel prices is about twice as large in the petroleum and cement industries as in the other industries studied.Based on the econometric results, the simulations reveal that carbon prices of $20 per metric ton of GHG reduce emissions by 8–32 percent across the industries considered. These reductions reflect short- and medium-run responses such as input substitution and limited technology adoption. The total emissions reductions vary across industries in accordance with their estimated responsiveness to energy prices; we estimate the largest total emissions reductions for cement and fertilizers and the smallest total emissions reductions for pulp and paper. |
| Date: | 2024–07–15 |
| URL: | https://d.repec.org/n?u=RePEc:rff:dpaper:dp-24-10 |
| By: | Sen, Anupama (Smith School of Enterprise and the Environment, University of Oxford); Jamasb, Tooraj (Department of Economics, Copenhagen Business School); Brandstätt, Christine (Department of Economics, Copenhagen Business School) |
| Abstract: | EU electricity infrastructure will need to undergo significant expansion to meet future demand for green energy, as member countries seek to meet their 2050 net zero targets. Meeting these targets requires the development of cross-border transmission networks, as high shares of offshore renewables need to be integrated in energy “hubs” and into mainland markets. However, the current liberalised national, but integrated, energy markets present challenges to the efficient development of the hubs. In the emerging offshore multi-vector renewable system, a simple allocation of the investment costs of a “hub” among its beneficiaries is not necessarily proportionately aligned with the benefits drawn from it. This challenge is exacerbated by the allocation of property rights to operate regulated natural monopolies of national Transmissions System Operators (TSOs), creating a fragmented ownership structure. We propose a solution based on the logic of collective action – namely, that a subset of EU member states have the shared incentive to cooperate on the joint development of assets. We then outline a Joint Venture framework that decouples the decision to invest from the decision on the allocation of costs and benefits across beneficiaries, enabling essential investments to proceed. This model also exhibits favourable dynamic properties for gradual development of hubs. |
| Keywords: | Cost allocation; decarbonisation; electricity; networks; climate; energy; security |
| JEL: | L50 L51 L94 Q40 Q48 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:cbsnow:2024_010 |
| By: | Kento Ichii; Toshiki Muraoka; Nobumichi Shinohara; Shunsuke Managi; Shutaro Takeda |
| Abstract: | In order to explore the possibility of carbon credits for greening projects, which play an important role in climate change mitigation, this paper examines a formula for estimating the amount of carbon fixation for greening activities in urban areas through tree planting. The usefulness of the formula studied was examined by conducting calculations based on actual data through measurements made by on-site surveys of a greening companie. A series of calculation results suggest that this formula may be useful. Recognizing carbon credits for green businesses for the carbon sequestration of their projects is an important incentive not only as part of environmental improvement and climate change action, but also to improve the health and well-being of local communities and to generate economic benefits. This study is a pioneering exploration of the methodology. |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2407.05596 |
| By: | Saussay, Aurelien; Sato, Misato |
| Abstract: | This study examines the influence of relative energy prices on the geographical distribution of industrial investments across 41 countries. Employing a gravity model framework to analyse firms’ investment location decisions, we estimate the model using global bilateral investment flows derived from firm-level M&A data. Our findings reveal that a 10% increase in the energy price differential between two countries results in a 3.2% rise in cross-border acquisitions. This effect is most pronounced in energy-intensive industries and transactions targeting emerging economies. Furthermore, policy simulations suggest that the impact of unilateral carbon pricing on cross-border investments is modest. |
| Keywords: | FDI; mergers and aquistions; energy prices; firm location; competitiveness impacts; carbon leakage; Elsevier deal |
| JEL: | F21 H23 Q52 |
| Date: | 2024–04–23 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:123034 |
| By: | Shaun D. McRae; Frank A. Wolak |
| Abstract: | Recent energy shortfalls in renewables-dominated electricity markets call for a mechanism to ensure demand is met under all system conditions. We demonstrate severe shortcomings of an increasingly popular mechanism—reliability options—caused by its interaction with fixed-price forward contracts for energy. Large generators can trigger the option exercise, weakening the short-term incentive to sell output provided by forward contracts alone. In the longer term, hydro generators sell more forward contracts and store less water, reducing system reliability. We empirically show that Colombian generators respond to these incentives. We analyze a standardized energy contracting approach to long-term resource adequacy that does not create these economic incentives. |
| JEL: | L13 Q40 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32616 |
| By: | Misev, Marina A. (University of Basel); Balles, Patrick (University of Basel) |
| Abstract: | This study examines how the occurrence of natural disasters in the U.S. influences investor interest in green assets and actual investments, focusing on inflows into green ETFs as a proxy for non-fundamental demand. Event study analyses demonstrate both increases in investor interest in eco-friendly investments (proxied by Google searches) and inflows into green ETFs following disasters, driven by the period following the 2015 Paris Agreement. The additional inflows average about USD 4.3 million in the week directly following disasters, compared to average inflows of around USD 1.1 million in the non-disaster reference window. Importantly, both effects disappear when other attention-grabbing events, such as terrorist attacks or mass shootings, occur simultaneously with disasters. Analysis of climate change coverage across U.S. media suggests that media attention devoted to climate change concerns drives the documented shifts in investor behavior towards green investments. Furthermore, analysis of flows in brown ETFs (e.g., the oil and gas sector) reveals analogous disinvestments in the wake of disasters, but notably, only in the absence of concurrent distracting events. |
| JEL: | G14 G41 |
| Date: | 2024–07–03 |
| URL: | https://d.repec.org/n?u=RePEc:bsl:wpaper:2024/07 |
| By: | Majeed, Fahd; Khanna, Madhu; Miao, Ruiqing |
| Keywords: | Resource/Energy Economics And Policy, Environmental Economics And Policy, Agricultural And Food Policy |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea22:344043 |
| By: | Lassi Ahlvik; Matti Liski; Mikael Mäkimattila |
| Abstract: | This paper develops a mechanism design approach to study externalities and re-distribution. The mechanism screens individuals’ social weights to strike a balance among broad distributional objectives, incentives to work, and incentives to reduce externalities. The welfare-optimal allocation can be decentralized through income taxation, defining income-dependent externality payments. Two applications use individual-level administrative data on incomes, pollution measures, and financial burdens to demonstrate how population characteristics shape the optimal policy on carbon emissions. |
| Keywords: | Pigouvian taxation, optimal income taxation, inequality, climate change |
| JEL: | D82 H21 H23 Q54 Q58 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11174 |
| By: | Camacho, Samuel E.; Penn, Jerrod |
| Keywords: | Resource/Energy Economics And Policy, Environmental Economics And Policy, Research Methods/Statistical Methods |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea22:343837 |
| By: | Christiansen, Anna Gade (Department of Economics, Copenhagen Business School); Llorca, Manuel (Department of Economics, Copenhagen Business School); Jamasb, Tooraj (Department of Economics, Copenhagen Business School); Zhao, Tian (School of Economics and Management, Beihang University, China) |
| Abstract: | This paper investigates how energy networks in the European Union can be encouraged to increase innovation to reach the decarbonisation goals. We design and analyse a tripar-tite evolutionary game model with the European Commission, national energy regulators, and energy network companies being the groups of players in the game. We find that the only evolutionary stable state of the game is where the three groups of players choose cooperation strategies. For the Commission and the national regulatory authorities, induc-ing innovation involves adopting new policy and regulatory mechanisms, respectively. For the energy networks, it involves investing in innovation with decarbonisation goals. We assume that the initial probability of the Commission choosing its cooperation strategy is relatively high and the initial probabilities of the regulators and the energy networks choosing cooperation strategies is relatively low. Numerical simulations suggest that the convergence rate to the evolutionary stable state can be increased if the Commission in-creases the probability of energy networks receiving external funding and penalty im-posed on regulators to adapt their incentive mechanisms to induce innovation. The Com-mission clearly plays a key role in reaching the stable state. |
| Keywords: | Energy networks; innovation; regulation; green transition; tripartite evolutionary game |
| JEL: | C70 L50 L90 O30 Q40 Q50 |
| Date: | 2024–06–24 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:cbsnow:2024_011 |
| By: | Guerin, Adrian; Najjar, Nouri; Schaufele, Brandon |
| Keywords: | Environmental Economics And Policy, Land Economics/Use, Resource/Energy Economics And Policy |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea22:343660 |
| By: | Shi, Hongxu; Chen, Kelin; Zhang, Jun |
| Keywords: | Environmental Economics And Policy, Community/Rural/Urban Development, Resource/Energy Economics And Policy |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea22:343702 |
| By: | Sanjit Dhami (University of Leicester); Paolo Zeppini (Université Côte d'Azur, CNRS, GREDEG, France) |
| Abstract: | We consider firms' choices between a clean technology that benefits, and a dirty technology, that harms, the environment. Green firms are more suited to the clean, and brown firms are more suited to the dirty technology. We use a model derived from complexity theory that takes account of true uncertainty and increasing returns to technology adoption. We examine theoretically, the properties of the long-run equilibrium, and provide simulated time paths of technology adoption, using plausible dynamics. The long-run outcome is an 'emergent property' of the system, and is unpredictable despite there being no external technological or preference shocks. We describe the role of taxes and subsidies in facilitating adoption of the clean technology; the conflict between optimal Pigouvian taxes and adoption of clean technologies; the optimal temporal profile of subsidies; and the desirability of an international fund to provide technology assistance to poorer countries. |
| Keywords: | Technology choice, climate change, complexity, lock-in e ects, increasing returns, green subsidies, public policy, Pigouvian taxes, stochastic dynamics |
| JEL: | B2 B21 B4 D9 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:gre:wpaper:2024-20 |
| By: | Ghozi Naufal Ali (Department of Economics, Faculty of Economics & Business, Universitas Gadjah Mada); Ester Dwi Sabtu (Department of Economics, Faculty of Economics & Business, Universitas Gadjah Mada); Muhammad Putra (Department of Economics, Faculty of Economics & Business, Universitas Gadjah Mada); Qisha Quarina (Department of Economics, Faculty of Economics & Business, Universitas Gadjah Mada) |
| Abstract: | Pollution (in this term, air pollution) is an environmental phenomenon that negatively impacts the lives of the broader community and harms all aspects of the human dimension, such as health and the economy. This study aims to quantify the impact of pollution on worker productivity in developing countries using longitudinal data from Indonesia in two periods (2007 and 2014) and utilizing satellite data to represent air pollution data better. This study uses an instrumental variable (IV) approach and expands it by quantifying health aspects as one of the transmissions in the relationship between pollution and productivity. The result is that pollution negatively impacts worker productivity, with a dominant negative effect transmitted by health factors and determines their productivity. For this reason, the government is involved in tackling increasing pollution to minimize the increase in disease cases while minimizing economic losses from this phenomenon in the future. |
| Keywords: | Pollution; Labor Productivity; Instrumental Variable (IV); Mediation Analysis; Developing Country |
| JEL: | J21 J22 J24 Q52 Q53 |
| Date: | 2024–03 |
| URL: | https://d.repec.org/n?u=RePEc:gme:wpaper:202403004 |
| By: | Raisa Sherif; Sven A. Simon |
| Abstract: | Today’s environmental challenges prompt individuals to take personal actions, though motivations vary. This paper presents causal evidence of a trade-off between two motivations behind pro-environmental behaviors (PEBs): maximizing environmental impact or being seen as green. In an experiment on voluntary carbon offsetting, we first isolate each motivation and quantify their impact. We then investigate whether individuals deliberately trade-off impact for the visibility of their actions, and why they do so. Our results show that while individuals respond to salient differences in efficiency and visibility, visible PEBs crowd out efficient alternatives, indicating a preference for being seen as green over actual environmental impact. We disentangle two motivations driving this preference for visible actions: social image concerns and role model aspirations. Role model aspirations exert a stronger influence, leading individuals to choose visible PEBs over efficient ones more frequently. |
| Keywords: | Pro-environmental behavior, Efficient behavior, Visible behavior, Role-model aspirations, Social image, Green preferences |
| JEL: | C90 D90 Q50 |
| Date: | 2023–06–01 |
| URL: | https://d.repec.org/n?u=RePEc:mpi:wpaper:tax-mpg-rps-2023-27 |
| By: | Shifrah Aron-Dine; Johannes Beutel; Monika Piazzesi; Martin Schneider |
| Abstract: | This paper studies green investing in a quantitative asset pricing model with heterogeneous investors calibrated using high-quality, representative survey data of German households. We find substantial heterogeneity in green taste for both safe and risky green assets throughout the wealth distribution. Model counterfactuals show nonpecuniary benefits and hedging demands currently make green equity more expensive for firms. Yet, these taste effects are dominated by optimistic expectations about green equity returns, lowering firms' cost of green equity to a greenium of 1%. Looking ahead, we use our model to trace out the aggregate effects of information provision in an RCT and find green equity investment could potentially double when information about green finance spreads across the population. Regarding safe green assets, our model counterfactuals show that if green deposits could be offered at a 50 basis point interest rate spread, aggregate green investments in the economy could quadruple in the medium run. |
| JEL: | E0 F0 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32615 |
| By: | Lange, Jan-Hendrik; Speth, Daniel; Plötz, Patrick |
| Abstract: | Battery electric trucks (BETs) are the most promising option for fast and large-scale CO2 emission reduction in road freight transport. Yet, the limited range and longer charging times compared to diesel trucks make long-haul BET applications challenging, so a comprehensive fast charging network for BETs is required. However, little is known about optimal truck charging locations for longhaul trucking in Europe. Here we derive optimized truck charging networks consisting of publicly accessible locations across the continent. Based on European truck traffic flow estimates for 2030 and actual truck stop locations we construct a long-term minimum charging network that covers the expected charging demand. Our approach introduces an origin-destination pair sampling method and includes local capacity constraints to compute an optimized stepwise network expansion along the highest demand routes in Europe. For an electrification target of 15% BET share in long-haul and without depot charging, our results suggest that about 91% of electric long-haul truck traffic across Europe can be enabled already with a network of 1, 000 locations, while 500 locations would suffice for about 50%. We furthermore show how the coverage of origin-destination flows scales with the number of locations and the size of the stations. Ideal locations to cover many truck trips are at highway intersections and along major European road freight corridors (TEN-T core network). |
| Keywords: | charging infrastructure, battery trucks, megawatt charging |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:fisisi:300275 |
| By: | Cheng, Yang; Hu, Lianyi |
| Keywords: | Research And Development/ Tech Change/Emerging Technologies, Labor And Human Capital, Resource/Energy Economics And Policy |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea22:343645 |
| By: | Montag, Felix; Sagimuldina, Alina; Winter, Christoph |
| Abstract: | The widespread availability of digital technologies has made mandatory price disclosure policies (MPD) a convenient tool for policymakers to increase price transparency and foster competition. The literature has shown that these can increase or decrease prices. We shed light on the circumstances under which MPD lowers prices. We study the introduction of MPD in the German retail fuel market by combining a stylized theoretical model with detailed data on prices, seller characteristics and consumer information. We find that low levels of prior consumer information, a high number of sellers, and complementary information campaigns foster the procompetitive effects of MPD. |
| Keywords: | Mandatory price disclosure, consumer information, retail fuel market |
| JEL: | D83 L41 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cbscwp:300263 |
| By: | Giovanni Dosi; Federico Riccio; Maria Enrica Virgillito |
| Abstract: | This work assesses the double harm of Global Value Chain (GVC) integration. Firstly, we take a within-country structural change perspective and investigate how the internal structure of country production, and thus the ensuing emission profile, evolves across development phases. Assessing the structural change-emissions nexus is necessary to understand how to reconcile growth and sustainable development. Secondly, we look at the cross-country dimension, embracing how the changing geography of production affects the environment. We find evidence that the relocation of production toward developing countries via GVCs has negatively impacted worldwide emissions and document that GVCs are progressively becoming a carrier of industrial and ecological downgrading for developing countries. |
| Keywords: | Structural Change, CO2 Emissions, Global Value Chains |
| Date: | 2024–07–09 |
| URL: | https://d.repec.org/n?u=RePEc:ssa:lemwps:2024/17 |
| By: | Thierry Mayer; Vincent Vicard; Pauline Wibaux |
| Abstract: | The automotive industry faces two disruptions: China’s emergence as a leading global auto exporter, and the transition from internal combustion engine (ICE) to electric vehicles (EVs). Detailed data on sales by origin/destination/model show that the automotive market is primarily local or continental, with limited sales originating from distant countries for both ICE and EV. Accordingly, foreign direct investment (FDI) is an important mode of supply for foreign markets. Insights from Japanese and Korean brands’ market penetration in the 2000s and 2010s suggest that successful models are primarily sold through local assembly; the most successful Chinese EV models in Europe are close or above the investment threshold. Examination of potential differences between EV and ICE indicates evolving comparative advantages: while EVs are not inherently more traded compared to other vehicles, China currently leads in cells and modules, but not yet in assembly. Down the value chain, the median distance between battery production and assembly is 215 km in 2022, suggesting localized sourcing in EV similar to combustion engines and larger than ICE transmissions. |
| Keywords: | Automotive industry;Electric vehicles;China;Protectionism;Foreign direct investment;Industrial policy |
| JEL: | F10 L62 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:cii:cepipb:2024-45 |
| By: | Wang, Linjie; Chavas, Jean-Paul; Li, Jian |
| Keywords: | Risk And Uncertainty, Agribusiness, Demand And Price Analysis |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea22:343541 |
| By: | CALDAROLA Bernardo; MAZZILLI Dario; NAPOLITANO Lorenzo (European Commission - JRC); PATELLI Aurelio; SBARDELLA Angelica |
| Abstract: | Economic Complexity (EC) methods have gained increasing popularity across fields and disciplines. In particular, the EC toolbox has proved particularly promising in the study of complex and interrelated phenomena, such as the transition towards a greener economy. Using the EC approach, scholars have been investigating the relationship between EC and sustainability, proposing to identify the distinguishing characteristics of green products and to assess the readiness of productive and technological structures for the sustainability transition. This article proposes to review and summarize the data, methods, and empirical literature that are relevant to the study of the sustainability transition from an EC perspective. We review three distinct but connected blocks of literature on EC and environmental sustainability. First, we survey the evidence linking measures of EC to indicators related to environmental sustainability. Second, we review articles that strive to assess the green competitiveness of productive systems. Third, we examine evidence on green technological development and its connection to non-green knowledge bases. Finally, we summarize the findings for each block and identify avenues for further research in this recent and growing body of empirical literature. |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:wpaper:202401 |
| By: | Olivier Chanel (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); Irène Cucchi (Service de l'air, du bruit et des rayonnements non-ionisants, Departement du Territoire, Republique et Canton de Geneve, Geneve) |
| Abstract: | Objectives: We propose a general framework for estimating long-term health and economic effects that takes into account four time-related aspects.We apply it to a reduction in exposure to air pollution in the Canton of Geneva. Study design: Methodological developments on the evaluation of long-term economic and health benefits, with an empirical illustration. Methods: We propose a unified frameworkdthe comprehensive impact assessment (CIA)dto assess the long-term effects of morbidity and mortality in health and economic terms. This framework takes full account of four time-related issues: cessation lag, policy/technical implementation timeframe, discounting and time horizon. We compare its results with those obtained from standard quantitative health impact assessment (QHIA) in an empirical illustration involving air pollution reduction in the canton of Geneva. Results: We find that by neglecting time issues, the QHIA estimates greater health and economic benefits than the CIA. The overestimation is about 50% under reasonable assumptions and increases ceteris paribus with the magnitude of the cessation lag and the discount factor. It decreases both with the time horizon and with the implementation timeframe. Conclusion: A proper evaluation of long-term health and economic effects is an important issue when they are to be used in cost-benefit analyses, particularly for mortality, which often represents the largest fraction. We recommend using the CIA to calculate more accurate values. |
| Keywords: | Quantitative health impact assessment, Comprehensive impact assessment, Air pollution, Long-term health effects, Economic assessment, Switzerland |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04616123 |
| By: | Andrei Renatovich Batyrov |
| Abstract: | There are several approaches to modeling and forecasting time series as applied to prices of commodities and financial assets. One of the approaches is to model the price as a non-stationary time series process with heteroscedastic volatility (variance of price). The goal of the research is to generate probabilistic forecasts of day-ahead electricity prices in a spot marker employing stochastic volatility models. A typical stochastic volatility model - that treats the volatility as a latent stochastic process in discrete time - is explored first. Then the research focuses on enriching the baseline model by introducing several exogenous regressors. A better fitting model - as compared to the baseline model - is derived as a result of the research. Out-of-sample forecasts confirm the applicability and robustness of the enriched model. This model may be used in financial derivative instruments for hedging the risk associated with electricity trading. Keywords: Electricity spot prices forecasting, Stochastic volatility, Exogenous regressors, Autoregression, Bayesian inference, Stan |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2406.19405 |
| By: | Jinniao Qiu; Antony Ware; Yang Yang |
| Abstract: | This paper is devoted to the price-storage dynamics in natural gas markets. A novel stochastic path-dependent volatility model is introduced with path-dependence in both price volatility and storage increments. Model calibrations are conducted for both the price and storage dynamics. Further, we discuss the pricing problem of discrete-time swing options using the dynamic programming principle, and a deep learning-based method is proposed for numerical approximations. A numerical algorithm is provided, followed by a convergence analysis result for the deep-learning approach. |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2406.16400 |
| By: | Davis, Eric; Sohngen, Brent; Lewis, David |
| Keywords: | Environmental Economics And Policy, Land Economics/Use, Resource/Energy Economics And Policy |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea22:343536 |
| By: | Rong, Rong; Crago, Christine L.; Wang, Rui |
| Keywords: | Resource/Energy Economics And Policy, Environmental Economics And Policy, Institutional And Behavioral Economics |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea22:343734 |
| By: | Mounia Boucetta |
| Abstract: | Au cours de la prochaine décennie, la transition énergétique transformera le paysage économique mondial en termes de régulations, d’investissements industriels et énergétiques et de solutions technologiques développées. Le continent africain est appelé à jouer un rôle important dans cette transition, tout en répondant à ses propres besoins de développement durable. Pour tirer pleinement profit de cette dynamique naissante, les pays africains devraient s'engager sur des chemins innovants et adaptés à leurs spécificités et à leurs contraintes. Ils devraient également identifier des leviers stratégiques pour stimuler l'avancement et l’accélération de leur transition énergétique, en maximisant les retombées économiques, sociales et environnementales. |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:ppaper:pb25-24 |
| By: | Xu, Yongdeng (Cardiff Business School); Guan, Bo (Cardiff Business School); Lu, Wenna (Cardiff Metropolitan University, Cardiff, United Kingdom); Heravi, Saeed (Cardiff Business School) |
| Abstract: | This paper introduces a novel model to analyse the impact of macroeconomic shocks on volatility spillovers within key financial markets, such as Stock, Bond, Gold and Crude Oil. By treating macroeconomic variables as external factors to financial market volatility, our study distinguishes between internal financial volatility spillovers and external shocks arising from macroeconomic changes. Our analysis reveals that without macroeconomic shocks, the Stock market predominantly acts as the main source of volatility spillovers, with Crude Oil being the principal spillover recipient. However, the Stock market’s role in driving volatility spillover, especially towards the Crude Oil market, changes markedly in the context of macroeconomic shocks. These shocks exert a more substantial impact on Crude Oil compared to other markets. In contrast, the Bond and Gold markets exhibit a lower level of volatility transmission and are less influenced by macroeconomic shocks, thereby reinforcing their roles as stabilizers within the financial system. |
| Keywords: | Volatility spillover, Macroeconomic shocks, Multiplicative error model, Realized volatility, Financial markets |
| JEL: | C32 C52 G14 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:cdf:wpaper:2024/15 |
| By: | Gleser, Michael |
| Abstract: | This dissertation investigates the topic of combined rail-road transport with a focus on Europe. In addition to an introduction to the subject and a description of the research design utilized, it consists of three distinct studies whose results build upon one another. In the first study, a Delphi study combined with a systematic literature review, explicit measures were identified on how combined transport can be strengthened from a practical perspective and which topic areas related research deals with. By synthesizing the results of both methods, a practice-oriented research agenda was created. It is intended to be a document of the current challenges of combined transport and an effective solution to them. The second study deals with port competition through hinterland connectivity, in which combined transport plays a major role. Using the example of the federal state of North Rhine-Westphalia, which is within the geographical scope of ports of the northern range, the influence of the CO2 tax introduced in 2021 is examined. A simulation model is used to investigate the impact of the tax, leading to interesting insights into the potential shift in competitive scope. The third and final study deals with the new possibilities of the China Railway Express, a direct train connection between Europe and China. Since the connection is enjoying increasing popularity, a simulation model, inspired by the second study, was used to examine which areas in China are economically accessible to exporters in Hesse utilizing this train connection. In addition, it was examined how this area would change if a (hypothetical) global carbon tax was introduced. All three studies together provide an overview of the current challenges of combined transport in Europe, its medium-term changes due to political and environmental regulations, and an outlook on the possibilities of intercontinental rail transport. |
| Date: | 2024–07–09 |
| URL: | https://d.repec.org/n?u=RePEc:dar:wpaper:146674 |
| By: | Baptista Palazzi, Rafael; Van Huellen, Sophie |
| Keywords: | Resource/Energy Economics And Policy, Demand And Price Analysis, Financial Economics |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea22:343668 |
| By: | Roxana Guti\'errez-Romero; Nayely Iturbe |
| Abstract: | Mexico has experienced a notable surge in assassinations of political candidates and mayors. This article argues that these killings are largely driven by organized crime, aiming to influence candidate selection, control local governments for rent-seeking, and retaliate against government crackdowns. Using a new dataset of political assassinations in Mexico from 2000 to 2021 and instrumental variables, we address endogeneity concerns in the location and timing of government crackdowns. Our instruments include historical Chinese immigration patterns linked to opium cultivation in Mexico, local corn prices, and U.S. illicit drug prices. The findings reveal that candidates in municipalities near oil pipelines face an increased risk of assassination due to drug trafficking organizations expanding into oil theft, particularly during elections and fuel price hikes. Government arrests or killings of organized crime members trigger retaliatory violence, further endangering incumbent mayors. This political violence has a negligible impact on voter turnout, as it targets politicians rather than voters. However, voter turnout increases in areas where authorities disrupt drug smuggling, raising the chances of the local party being re-elected. These results offer new insights into how criminal groups attempt to capture local governments and the implications for democracy under criminal governance. |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2407.06733 |
| By: | Markos Farag, Stephen Snudden, Greg Upton |
| Abstract: | Can futures markets provide useful real-time forecasts of period average commodity prices? We consider seventeen primary commodities across energy, metals, and agricultural markets and find that futures-based forecasts of period averages outperform the (end-of-period) random walk forecast for the majority of commodities. We document that the prior mixed evidence on the usefulness of futures-based forecasts was driven by the time-sampling of the futures and no-change benchmark data, as well as the forecast evaluation period examined. We show that non-parametric approaches based on the most recent trading data (in lieu of averaging) are the most accurate. Results suggest that academics, policymakers, and industry can consider utilizing futures prices as forecasts of commodity prices. |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:wlu:lcerpa:jc0145 |
| By: | Maria Laura Victoria Marques; Ronaldo Seroa da Motta; Daniel de Abreu Pereira Uhr; Julia Ziero Uhr |
| Abstract: | The journal Energy Economics, a leading international peer-reviewed outlet for economic theory in the energy sector, celebrates its 45th anniversary in 2024. This article uses a bibliometric approach to present a retrospective of the journal's contributions. The study includes all publications from the journal based on data from the Web of Science and Scopus databases. The resulting sample comprises 6, 563 documents covering the period from 1979 to April 2024. The annual publication rate increased by 1.02 percent, with an average of 40.07 citations per document. Institutions from the United States of America and China lead in the number of articles published in the journal. A co-occurrence analysis of keywords was conducted, complemented by a sub-sample analysis, to provide a detailed view of thematic development and evolution over time. Finally, the article highlights future thematic trends of the journal, offering insights for editorial guidelines and interested authors. |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2407.05974 |
| By: | Yannis Dafermos (Department of Economics, SOAS University of London) |
| Abstract: | The European Central Bank (ECB) has recently incorporated climate considerations into its operations. In this paper, I assess whether the ECB’s approach is consistent with the challenges of the climate crisis era. I first identify three transformative implications of the climate crisis for central banking. These are that central banks (i) are becoming less able to control inflation via monetary policy tools, (ii) can no longer ignore their responsibility to support decarbonisation, and (iii) cannot rely on traditional risk exposure approaches to prevent financial instability that stems from physical risks. I then analyse to what extent these implications are reflected in the ECB climate actions and plans, showing that there is a very significant gap between the ECB’s 'tinkering around the edges' approach and the central banking challenges posed by the climate crisis. Using post-Keynesian, critical macro-finance and political economy perspectives, I develop the theoretical underpinnings of a climate-aligned central banking paradigm and analyse the implications of this paradigm for the ECB policy toolbox and mandate. I also identify the ideological and political economy factors that prevent the ECB from undergoing a climate paradigm shift. |
| Keywords: | European Central Bank; monetary policy; financial stability; inflation; climate crisis |
| JEL: | E58 Q54 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:soa:wpaper:264 |
| By: | Muhammad Akmal Farouqi (Department of Economics, Faculty of Economics & Business, Universitas Gadjah Mada); Gigih Fitrianto (Department of Economics, Faculty of Economics & Business, Universitas Gadjah Mada) |
| Abstract: | The existence of heterogeneity in size and response in each sector cannot be neglected. Moreover, there is an interaction between sectors in the form of trade between intermediate input and intermediate output. This research offers a framework to mathematically and empirically prove the existence of systemic effects on intersectoral linkages in the economy. This research is the first to interpolate data by scaling and updating the IO table using the RAS procedure to obtain quarterly IO datasets from 2001 to 2022 timeframe. Mathematically, on simple deductive proofs that combine Cobb–Douglas and Leontief’s production function, research has revealed the propagation of systemic risk. Furthermore, by utilizing a previous literature model with data from Indonesia, empirical approaches simulate shocks, namely, crude oil prices and business confidence, by using the SVAR procedure. In this regard, the empirical results indicate that systemic effects on intersectoral linkages in Indonesia do exist. |
| Keywords: | Systemic Effect, Intersectoral Linkages, Input‒Output¸ SVAR |
| JEL: | D57 C67 C53 L16 |
| Date: | 2024–03 |
| URL: | https://d.repec.org/n?u=RePEc:gme:wpaper:202403001 |
| By: | Daniela Vidart (University of Connecticut) |
| Abstract: | The decline in fertility occurring throughout the first half of the 20th century in the United States and preceding the baby boom remains largely unexplored. This paper presents empirical and theoretical evidence linking this decline to the spread of electricity. Using data on early electrification e˙orts, I empirically disentangle two channels linking electrification and fertility: the introduction of time-saving appliances that reduce the time needed for child-rearing; and the rise in female wages which raises the opportunity cost of childcare. I then use these empirical estimates to calibrate a model that features both channels and quantifies the aggregate impact of electrification on fertility. I find that electrification explains 3.1% of the overall fertility decline in 1900–1940 in the US, corresponding to a magnitude of 0.047 fewer children born to each woman, and that this decline is driven by young childless women who can reap the labor market gains of electricity. |
| JEL: | J13 J16 J22 O33 E24 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:uct:uconnp:2024-03 |
| By: | Wang, Haoying; Young, Michael |
| Keywords: | Resource/Energy Economics And Policy, Environmental Economics And Policy, Land Economics/Use |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea22:343990 |
| By: | John Korngold |
| Abstract: | Alors que la communauté mondiale peine à mettre en œuvre une gouvernance efficace pour protéger le climat, cet article explore le potentiel des communs, à la fois comme pratiques et comme grille de lecture critique, pour contribuer à cette gouvernance. Il se base sur une revue approfondie de la littérature croisant le climat au champ sémantique des communs dans laquelle il distingue les études adoptant une approche analytique ou empirique des communs, abordés en tant que pratiques sociales situées, de ceux s’appuyant sur les communs dans une démarche normative, en vue de changements sociétaux profonds. La première partie revient sur les points les plus saillants de la gouvernance climatique telle qu’elle s’est construite au cours des trois dernières décennies, en portant une attention particulière aux enjeux d’action collective ainsi qu’aux théories conventionnelles qui fondent cette gouvernance. Ce travail met en évidence une gouvernance mondiale prenant lieu historiquement à l’échelle des États-nations et dominée par de nombreux mécanismes de marché, une gouvernance que nous qualifions de pluri-États / marché. La suite de ce papier effectue une analyse critique de cette gouvernance climatique à partir de la littérature des communs. Ce travail nous permet d’identifier de nombreux croisements, plus ou moins explorés dans la littérature, parmi lesquels l’existence de formes d’action collective se déployant par-delà les États et le marché, à des échelles variées, et œuvrant en faveur du climat, soit à travers des actions spécifiques de lutte contre le changement climatique, soit par des stratégies innovantes d’adaptation. Au-delà de ces formes empiriques d’action collective, le croisement entre communs et climat met également en avant des évolutions de la gouvernance climatique dans une perspective polycentrique, ainsi que des narratifs en construction autour de la notion de bien commun global. Nous concluons le papier en ouvrant sur un agenda de recherche qui s’avère très riche, tant dans une perspective empirique qu’avec des approches plus normatives. |
| JEL: | Q |
| Date: | 2024–07–24 |
| URL: | https://d.repec.org/n?u=RePEc:avg:wpaper:fr17044 |