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on Microeconomic European Issues |
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Issue of 2010‒08‒06
fifteen papers chosen by Giuseppe Marotta University of Modena and Reggio Emilia |
| By: | Dominguez, Ignacio Perez; Britz, Wolfgang |
| Abstract: | In this paper the agricultural sector model CAPRI is expanded to cover non-CO2 greenhouse gas emissions from agricultural sources in Europe and policy instruments for their reduction. A stylised spatial trade model for emission permits is methodologically described and applied to the assessment of three potential policy alternatives for enforcing emission reductions from European agriculture: the EU âeffort sharing agreementâ, an EU-wide emission trading scheme between regions inside each Member State and, finally, an EUwide emission trading scheme between all European regions. This paper builds in the experience accumulated by Pérez DomÃnguez et al. (2010) and provides a through review of the underlying methodology, a expansion of emission sources and a larger projection line (year 2020). Results shows the importance of selecting an adequate combination of instruments of emission abatement for the design of efficient emission reduction policies. |
| Keywords: | Copenhagen agreement, effort sharing agreement, agricultural policy, economic modelling, tradable emission permits, Agricultural and Food Policy, Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr10:91396&r=eur |
| By: | Jeremy Lawson |
| Abstract: | European energy policy faces a number of interrelated challenges, including making the transition to a low–carbon economy, increasing cross–border competition in electricity and gas markets and diversifying Europe’s energy supply. The EU has developed a comprehensive strategy in all of these areas, encapsulated in 2020 targets for reducing greenhouse gas emissions, raising renewable energy and increasing energy efficiency. These targets are underpinned by an Emissions Trading Scheme, legally binding reduction commitments by member states for the emissions not covered by the trading scheme, the third energy liberalisation package and the Energy Security and Solidarity Plan. The steps the EU have taken are worthwhile but there is also room for improvement. To ensure that the transition to a low–carbon economy is achieved at a low cost, the EU should seriously consider including all transport sectors in the Emissions Trading Scheme when practical and appropriate, and ensure that only sectors rigorously identified as being at genuine risk of carbon leakage should continue to receive free allowances until 2020. Consideration should be given to making use of an EU–wide market instrument to deliver the EU’s renewable energy target, and it will be important to ensure that the 10% renewable transport fuel target efficiently achieves its objectives of sustainability and security of supply given the high cost of many renewable transport fuels. Measures to raise energy efficiency will have to be designed carefully so that the overall cost of mitigation is not raised. The Commission’s third energy market liberalisation package should be strengthened by requiring full ownership unbundling of transmission service operators and ensuring the powers of the proposed Agency for Co–operation of Energy Regulators are broad enough to contribute effectively to a truly single European energy market. This Working Paper relates to the 2010 Economic Survey of the European Union. (www.oecd.org/eco/surveys/EuropeanUnion)<P>Politique énergétique européenne et le passage à une économie sobre en carbone<BR>La politique énergétique de l’Europe doit relever plusieurs défis interdépendants, dont le passage à une économie sobre en carbone, l’accentuation de la concurrence transfrontalière sur les marchés de l’électricité et du gaz et la diversification des sources d’énergie. Dans tous ces domaines, l’Union européenne a conçu une stratégie globale inscrite dans les objectifs de 2020 pour la réduction des émissions de gaz à effet de serre, qui fait une plus grande place aux énergies renouvelables et favorise l’augmentation de l’efficacité énergétique. Ces objectifs reposent sur plusieurs piliers : le système communautaire d’échange de quotas d’émission (SCEQE), des engagements de réduction légalement contraignants des États membres pour les émissions non couvertes par le système d’échange, le troisième paquet énergie et le Plan d’action européen en matière de sécurité et de solidarité énergétiques. Les mesures prises par l’Union européenne sont louables, mais des améliorations sont toutefois possibles. Pour passer au moindre coût à une économie sobre en carbone, l’UE devrait sérieusement envisager d’inclure tous les secteurs des transports dans le système d’échange de quotas d’émission lorsque c’est possible et judicieux, et veiller à ce que seuls les secteurs rigoureusement identifiés comme présentant un risque significatif de fuite de carbone continuent de recevoir des quotas gratuits jusqu’en 2020. Il faudrait envisager de mettre en place un instrument de marché à l’échelle européenne pour réaliser l’objectif de développement des énergies renouvelables, et vu le coût élevé de nombreux carburants de transport renouvelables, il conviendra de veiller à ce que l’objectif de 10 % de carburant renouvelable réponde à l’ambition d’assurer la durabilité et la sécurité des approvisionnements. Les mesures en faveur de l’efficacité énergétique devraient être conçues avec le plus grand soin si l'Europe veut éviter de payer un coût total plus important. Il faudrait renforcer le troisième paquet énergie de la Commission, en exigeant une séparation patrimoniale totale des exploitants de services de transport et en veillant à doter la future Agence de coopération des régulateurs de l’énergie de pouvoirs suffisamment importants pour qu'elle puisse efficacement travailler à la mise en place d'un véritable marché unique européen de l’énergie. Ce document de travail porte sur l'Étude économique de l'Union Européenne (www.oecd.org/eco/etudes/UnionEuropeénne ) |
| Keywords: | European Union, renewable energy, emissions trading, Climate change mitigation, energy market regulation, Union européenne, énergies renouvelables, Atténuation du changement climatique, échanges de droits d'émission, régulation du marché de l'énergie |
| JEL: | Q4 Q5 |
| Date: | 2010–06–08 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:779-en&r=eur |
| By: | Oberndorfer, Ulrich; Alexeeva-Talebi, Victoria; Löschel, Andreas |
| Abstract: | In making key decisions for the future phases of the European Union Emissions Trading Scheme (EU ETS), policy makers need to fully understand the competitiveness implications of these decisions on industrial sectors. In this paper, we conduct an empirical analysis of cost pass-through ability of producers of selected products within the sectors refineries, glass, chemicals and ceramics of the UK economy. Our results provide new insights into the debate on the ability of pass-through of costs generated by the EU ETS. They suggest that some of the sectors analysed have the ability to pass-through a portion of their carbon costs to the consumers: The UK sectors are not capable to completely pass-through their costs into output prices, with the exception of UK ceramic goods. -- |
| Keywords: | Emissions Trading,Competitiveness,Cost Pass-Through |
| JEL: | C22 D40 H23 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10044&r=eur |
| By: | Frey, Rainer |
| Abstract: | As, in Europe, many institutional reforms have been undertaken to establish an economic union, it can be expected that the relevance of borders has decreased over time. For the EU 15, we investigate the expected integration process of the market for corporate control - an illustrative market for studying integration issues - over the period from 1995 to 2007. Our gravity regressions show that borders lost relevance from 1995 up to the bursting of the new economy bubble. During this period, the transition from the European Economic Community to the European Union at the end of 1993 and the introduction of the euro may have led to accelerated integration. However, thereafter we find no evidence for further progress driven by institutional factors. On the other hand, geographical distance became less relevant for M&As for the entire time span from 1995 to 2007. The continued lack of full integration is also evidenced by heterogeneity inside Europe. This becomes apparent in differing and continuing bilateral border effects. Country pairs with supposedly liberal capital market thinking, such as the Netherlands, Germany and the UK are found to be divided by relatively small barriers. Hence, a still existing lack of integration in Europe may not be a result of missing institutional reforms. In the Poisson estimations, the results depend neither on the choice of the number of observations nor on the log of aggregated transaction value as the dependent variable; however, the use of the levels is inappropriate. -- |
| Keywords: | Integration,Europe,border effects,bilateral borders,distance,gravity,Poisson,panel,mergers and acquisitions |
| JEL: | F21 F23 F36 G15 G34 R12 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:bubdp1:201014&r=eur |
| By: | Astrid Krenz; Gerhard Rübel |
| Abstract: | The aim of this study is to empirically investigate the development of Industrial Localization and Countries\' Specialization Patterns in the European Union, to explain the driving forces behind and to find out dynamic tendencies. We extend existing research work by using a broader data set, covering a longer period of time and by applying several econometric methods in order to explain Localization and Specialization. Explanatory variables are derived from Traditional Trade Theory, New Trade Theories and the New Economic Geography. Taking EU-KLEMS data for 14 European countries covering 20 industries over the period from 1970 to 2005 we compute both regional and locational Gini coefficients. There is a clear increase in Industrial Concentration but only a slight increase in Countries\' Specialization in the EU evident over time. Especially, low technology or labor intensive industries experienced the highest increase in Industrial Concentration. New Trade Theory and New Economic Geography can explain both Industrial Concentration and Countries\' Specialization in the EU best. As regards Countries\' Specialization our results indicate that trade costs seem to have declined so much and European liberalization has proceeded so far that dispersion among countries occurs again. We show that it\'s important to consider multicollinearity problems of variables. Furthermore, we test for cointegration between our regression variables. For the EU, results of an error correction modeling framework show that imbalances in European Countries\' Specialization are being set off at a rate of about 68 to 105 percent (according to the regression framework taken) within the next period. New Economic Geography is the best explanatory force within the error correction model. Adjustments rates for Sweden and Italy appear to be much lower than for the EU as a whole. These results might be valuable for understanding agglomeration processes in the EU. Also, as European Integration continues to progress, it is important to know how and how quickly countries will specialize and industries will agglomerate. |
| Keywords: | New Economic Geography, Concentration, Specialization, European Integration, Cointegration |
| JEL: | C50 F14 F15 |
| Date: | 2010–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:got:cegedp:106&r=eur |
| By: | Becker, Arno; Adenauer, Marcel; Blanco Fonseca, Maria |
| Abstract: | Even though recent discussions on food prices and indirect land use change point at potential conflicts associated with the production of biofuels the appraisal of biofuels as an effective instrument to slow down climate change and reduce energy dependency still prevails. The EU Renewable Energy Directive (EUROPEAN COMMISSION, 2009) underlines this trend by setting a target of 10% share of energy from renewable sources in the transport sector by 2020. As economic competitiveness of biofuel production is still not given in most European countries, support policies are essential to achieve this target. Second generation technologies have still not attained marketability, wherefore biofuel consumption will continue to significantly affect agricultural markets. Furthermore, biofuel trade receives more attention. Apart from Brazil the USA has evolved to one of the key biofuel producer in recent years replacing the EU as the dominant biodiesel exporter. Those developments in regions outside the EU have to be considered within the evolution of biofuel markets. The primary objective of this paper is to analyse in detail impacts of future biofuel developments on agricultural markets under several assumptions regarding the availability of 2nd generation technologies, the EU support policy framework and the EU trade policy regime. Therefore, we developed an extended version of the comparative static agricultural sector model CAPRI which covers global biofuel markets with a detailed focus on Europe. The results supplement already existing model-based impact assessments while focussing on EU Member State level and introducing global bilateral trade of biofuels based on the Armington approach. The results of our scenario analysis presented in this paper indicate that the European 2020 biofuel target will significantly affect global and European biofuel- as well as agricultural markets. Thereby, global biofuel trade will notably increase, especially flows of biodiesel from the USA and Argentina and of ethanol from Brazil into the EU will increase accentuating the net-importing position of the EU by 2020. On the agricultural markets, we can observe that additional demand caused by European biofuel production will be, on the one hand, partially compensated by substitution effects on the feed market and, on the other hand, mainly filled by increasing imports. Thus, effects on agricultural product prices will also be significant, while effects on EU agricultural production will only be marginal. This leads consequently to only marginal environmental impacts within Europe and confirm the assumption that notable environmental effects caused by EU biofuel production and consumption will mainly take place outside Europe, especially in those countries which are important producers of biofuel feedstock. |
| Keywords: | Agricultural and Food Policy, Crop Production/Industries, Environmental Economics and Policy, International Relations/Trade, Land Economics/Use, Resource /Energy Economics and Policy, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr10:91395&r=eur |
| By: | Francesco Pecci (Department of Economics (University of Verona)); Elisa Montresor (Department of Economics (University of Verona)); Nicola Pontarollo (Department of Economics (University of Verona)) |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:ver:wpaper:08/2010&r=eur |
| By: | Oberhofer, Harald (University of Salzburg) |
| Abstract: | This paper examines the employment effects of acquisitions for acquired European firms taking non-random selection of acquisition targets explicitly into account. Following the empirical firm growth literature and theories put forward in the mergers and acquisition (M&A) literature we control for convergence dynamics in firm size and distinguish between different types of acquisitions. Empirically, we estimate an endogenous treatment model using accounting data for a newly created sample of acquired and non-acquired European firms. Our results reveal positive employment effects for all different types of acquisitions. |
| Keywords: | Acquisitions; employment effects; firm growth; endogenous treatment model |
| JEL: | C21 G34 L22 L25 |
| Date: | 2010–07–27 |
| URL: | http://d.repec.org/n?u=RePEc:ris:sbgwpe:2010_010&r=eur |
| By: | Kahn, Lawrence M. (Cornell University) |
| Abstract: | I review theories and evidence on wage-setting institutions and labor market policies in an international comparative context. These include collective bargaining, minimum wages, employment protection laws, unemployment insurance (UI), mandated parental leave, and active labor market policies (ALMPs). Since it is unlikely that an unregulated private sector would provide the income insurance these institutions do, these policies may enhance economic efficiency. However, to the extent that unemployment or resource misallocation results from such measures, these efficiency gains may be offset. Overall, Scandinavia and Central Europe follow distinctively more interventionist policies than the English speaking countries in the Northern Hemisphere. Possible explanations for such differences include vulnerability to external market forces and ethnic homogeneity. I then review evidence on the impacts of these policies and institutions. While the interventionist model appears to cause lower levels of wage inequality and high levels of job security to incumbent workers, it also in some cases leads to the relegation of new entrants (disproportionately women, youth and immigrants) as well as the less skilled to temporary jobs or unemployment. Making labor markets more flexible could bring these groups into the regular labor market to a greater extent, at the expense of higher levels of economic insecurity for incumbents and higher levels of wage inequality. The Danish model of loosening employment protections while providing relatively generous UI benefits with strict job search requirements holds out the possibility of reducing barriers for new entrants and the less skilled while maintaining some level of income insurance. |
| Keywords: | labor market flexibility |
| JEL: | J68 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5100&r=eur |
| By: | Astrid Krenz |
| Abstract: | Services sectors\' agglomeration in the European Union, its development over time, its driving factors and dynamic tendencies will be empirically investigated in this study. Locational gini coefficients are computed taking EU-KLEMS data for 14 European countries covering 22 services sectors over the period from 1970 to 2005. Services sectors\' agglomeration in the European Union decreased over the years between 1970 and 2005. Analysis shows that for most of the services sectors considered agglomeration decreased over time, leading to further dispersion of economic activities. Only the branches of retail trade, other water transport and financial intermediation record a significant increase in agglomeration. Agglomeration tendencies of services sectors can be best explained by Traditional and New Trade Theories, New Economic Geography appears to be not relevant. Theoretical work, incorporating services sectors\' activities in New Economic Geography models, is scarce and as Empirics show there is a justified reason for lack of research in that area. In a further step the interaction between industrial and services sectors\' agglomeration is investigated. Non-stationarity of variables is being checked for and error correction methods or regression in differences is employed. There exist several interactions between services and industrial sectors\' agglomeration in the European Union. In particular, agglomeration in retail trade is positively influenced by an increase in agglomeration in textiles industries over the years between 1970 and 2005. The existence of interaction effects justifies further enhancement of theoretical models. Further, the results are important for understanding agglomeration processes in the EU; interactions between services and industrial sectors are indicative for a highly dynamic region which might attract other activities, as well. |
| Keywords: | Services, Agglomeration, New Economic Geography, European Integration |
| JEL: | C50 F12 F14 F15 L80 |
| Date: | 2010–07–05 |
| URL: | http://d.repec.org/n?u=RePEc:got:cegedp:107&r=eur |
| By: | Martin Maegli; Christian Jaag; Martin Koller; Urs Trinkner |
| Abstract: | There is an increasing convergence between postal products and telecom applications which suggests the need for a co-evolution of regulation. But there is hardly any discussion in academia or in practice about the consequences for regulation. Relevant questions are: Which parts of current regulation will become redundant? Is there additional regulation needed due to new bottlenecks or changes in consumer behavior? In our qualitative analysis, we investigate the implications of intermodal competition and growing convergence between postal and telecommunications services on regulatory institutions and regimes. We set up a comparison between the networks and compare the scope of universal services and issues concerning market power regulation in the two different industries. |
| Keywords: | Convergence, Regulation, Post, Telecommunication, Universal service obligation, Access |
| JEL: | L41 L52 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:chc:wpaper:0023&r=eur |
| By: | Osberghaus, Daniel; Reif, Christiane |
| Abstract: | Adaptation to climate change is gaining increasing relevance in the public debate of climate policy. However, detailed and regionalised cost estimates as a basis for cost-benefit-analyses are rare. We compose available cost estimates for adaptation in Europe, and in particular Germany, Finland and Italy. Furthermore, a systematic overview on fiscal aspects of adaptation is provided, with focus on budgetary effects of adaptation in the different impact sectors. Combining cost estimates, considerations on fiscal aspects and governmental interventions in adaptation processes, we present data-based guesses of public adaptation costs in the EU, divided by impact sectors. The findings show an expectedly large public burden in the adaptation of transport infrastructure and coastal protection, while high adaptation costs in the agriculture sector are predominantly private. The change in energy demand may well lead to a significant decrease in public expenditure. Considering the regional heterogeneity of adaptation measures and the high uncertainty of quantitative adaptation analyses, further research in the form of bottom-up-studies is needed. -- |
| Keywords: | adaptation,climate change,adaptation costs,fiscal effects,governmental intervention |
| JEL: | H54 Q54 Q58 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10046&r=eur |
| By: | Juan S. Mora-Sanguinetti (Banco de España) |
| Abstract: | Compared with the rest of the European countries the weight of the house property market in Spain is very high, which is consistent with the weakness of the tenancy market. In this context, it has often been argued that an inefficient judicial system, implying a cumbersome procedure to evict a non-paying tenant or simply needing a long period to execute a decision, may be an important determinant of the tenancy market weakness, as it constrains the effective supply by reducing the profitability of landlords. This research has studied this effect econometrically using a panel data approach and exploiting the differences in the judicial efficiency that exists among the Spanish provinces. After controlling for several other factors, this study concludes that the degree of inefficiency of the judicial system has a positive, although minor, impact on the differences in the property share among provinces in Spain. |
| Keywords: | judicial efficiency, property market, tenancy market, contract enforcement |
| JEL: | K40 R21 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:1025&r=eur |
| By: | Zahniser, Steven; Arriola, Christine; Somwaru, Agapi |
| Keywords: | Agricultural and Food Policy, Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr10:91406&r=eur |
| By: | Schmid, Günther (WZB - Social Science Research Center Berlin) |
| Abstract: | This paper presents – in a new way of examination and portrayal – the extent and changes of nonstandard employment relationships (part-time work, fixed-term contracts, and self-employment) in 24 EU member states at two points of time, in 1998 and 2008, on the basis of the European Labour Force Survey. Apart from a detailed statistical description by gender, skills and branches, theoretical considerations explaining the development are also examined and tested in a preliminary way. Finally, the most important results and their challenges to the future labour market policy are emphasised again and discussed. The central outcome is neither the complaint of the eroding 'standard employment relationship' nor of its potential 'precariousness'; it is rather the requirement of increasing variability in employment relations due to rising employment participation of women (work-life-balance), mature aged workers, and persons with restricted work capacities. However, parallel to this development social risks are also spreading over the life course, especially the risk of great income volatility through multiple or long periods of unemployment, changing working times, obsolete skills or restricted work capacities due to ill health. In order to reduce or to avoid new social inequalities, future labour market reforms have to acknowledge this development by establishing new forms of social security or by constituting a more flexible standard employment relationship through adaptations in labour and social law. The contribution ends by providing some suggestions to such reforms. |
| Keywords: | non-standard employment, labour force participation, flexibility, labour market policy |
| JEL: | J21 J38 J41 J48 J68 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5087&r=eur |