|
on Regulation |
| By: | Magdalena Stadejek (Faculty of Business Administration and Economics, European University Viadrina, Frankfurt (Oder)); Alexander Haupt (School of Management (Plymouth Business School)) |
| Abstract: | We analyse optimal environmental policies in a market that is vertically differentiated in terms of the energy efficiency of products. Considering energy taxes, subsidies to firms for investment in more eco-friendly products, and product standards, we are particularly interested in how distributional goals in addition to environmental goals shape the choice of policy instruments. We Önd that an industry-friendly government levies an energy tax to supplement a lax product standard, but shies away from subsidies to firms. By contrast, a consumer-friendly government relies heavily on a strict product standard and additionally implements a moderate subsidy to firms, but avoids energy taxes. |
| Keywords: | Energy tax, energy efficiency standard, subsidy, vertically differentiated markets, product quality |
| JEL: | Q58 Q48 L13 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:euv:dpaper:006&r=reg |
| By: | Nils Axel Braathen |
| Abstract: | Well designed emission trading systems are environmentally effective and economically efficient instruments to address emissions of CO2 and other greenhouse gases. This paper discusses interactions that can occur when a cap-and-trade based emission trading system is combined with overlapping policy instruments (environmentally related taxes, subsidies, ‘command-and-control regulations, information instruments, etc.), addressing emissions stemming from the same sources. |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:oec:envddd:2011/2-en&r=reg |
| By: | Martin Drechsler; Jürgen Meyerhoff; Cornelia Ohl (Faculty of Business Administration and Economics, European University Viadrina, Frankfurt (Oder)) |
| Abstract: | Although wind power is currently the most efficient source of renewable energy, the cost of wind electricity still exceeds the market price. Subsidies in the form of feed-in tariffs (FIT) have been introduced in many countries to support the expansion of wind power. These tariffs are highly debated. Proponents say they are necessary to pave the way for decarbonising energy production. Opponents argue they prevent a welfare-optimal energy supply. Thus, in a case study we try to shed light on the welfare economic aspect of FIT by combining spatial modelling and economic valuation of landscape externalities of wind turbines. We show for the planning region West Saxony, Germany, that setting FIT in a welfare optimal manner is a challenging task. If set too high the production costs are overly increased, lowering social welfare. If set too low energy production targets may not be reached and/or external costs are overly increased, again lowering social welfare. Taking a closer look at the tariffs offered by the German Renewable Sources Energy Act we find for West Saxony that the tariffs quite well meet economic welfare considerations. One should note, however, that this finding might apply only to the present data set. |
| Keywords: | feed-in tariff, spatial allocation, wind power |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:euv:dpaper:007&r=reg |
| By: | Eva Camacho-Cuena (LEE & Economics Department, Universitat Jaume I, Castellón, Spain); Till Requate (Economics Department, University of Kiel, Germany); Israel Waichman (Department of Economics, University of Heidelberg, Germany) |
| Abstract: | This paper presents the results of an experimental investigation on incentives to adopt advanced abatement technology under emissions trading. Our experimental design mimics an industry with small asymmetric polluting firms regulated by different schemes of tradable permits. We consider three allocation/auction policies: auctioning off (costly) permits through an ascending clock auction, grandfathering permits with re-allocation through a single-unit double auction, and grandfathering with reallocation through an ascending clock auction. Our results confirm both dynamic and static theoretical equivalence of auctioning and grandfathering. We nevertheless find that although the market institution used to reallocate permits does not impact the dynamic efficiency from investment, it affects the static efficiency from permit trading. |
| Keywords: | Environmental policy, abatement technology, taxes, permit trading, auctions opportunity, Ultimatum Game |
| JEL: | C92 D44 L51 Q28 Q55 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:jau:wpaper:2012/22&r=reg |
| By: | Caroline Dieckhöner |
| Abstract: | Improving energy efficiency is one of the three pillars of the European energy and climate targets for 2020 and has led to the introduction of several policy measures to promote energy efficiency. The paper analyzes the effectiveness of subsidies in increasing energy efficiency in residential dwellings. An empirical analysis is conducted in which the effectiveness of subsidies on the number of dwelling modernizations is investigated. Next, the impact of renovations on energy consumption is analyzed using a differences-in-differences-in-differences approach for modernizations made in given subsidy program periods, as well as for ownership status and household types for more than 5000 German households between 1992 and 2010. By controlling for socio-economic status, dwelling characteristics and macro-indicators, it becomes apparent that homeowners invest significantly more and have significantly lower heating expenditures than their tenant counterparts. Thus, the landlord-tenant problem tends to broaden the energy efficiency gap. It is also found that the number of modernizations made by landlords does not increase with higher subsidies. However, the renovations made during the subsidy periods decrease the heating consumption of tenants. Given the conditions that homeowners already invest more in energy efficiency, they increase modernizations only slightly with increasing subsides. However, these modernizations during subsidy periods do not further decrease homeowners' energy consumption. Thus, the large part of the overall subsidies received by homeowners can be identified as windfall profits. |
| Keywords: | ousehold behavior, econometric analysis, energy effciency, demand modelling |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp527&r=reg |
| By: | Volodymyr Korniichuk |
| Abstract: | We propose a model for forecasting extreme electricity prices in real time (high frequency) settings. The unique feature of our model is its ability to forecast electricity price exceedances over very high thresholds, where only a few (if any) observations are available. The model can also be applied for simulating times of occurrence and magnitudes of the extreme prices. We employ a copula with a changing dependence parameter for capturing serial dependence in the extreme prices and the censored GPD for modelling their marginal distributions. For modelling times of the extreme price occurrences we propose an approach based on a negative binomial distribution. The model is applied to electricity spot prices from Australia's national electricity market. |
| Keywords: | electricity spot prices, copula, GPD, negative binomial distribution |
| JEL: | C53 C51 C32 |
| Date: | 2012–12–27 |
| URL: | http://d.repec.org/n?u=RePEc:cgr:cgsser:03-14&r=reg |
| By: | Andrea Beltramello |
| Abstract: | This report presents and analyses policies, programmes and approaches for the development, market introduction and diffusion of green cars. It reviews government policies in a number of OECD countries as well as a selection of non-OECD economies. The report attempts to provide: i) a better understanding of the growing market for green vehicles; ii) new analytical instruments to identify policies and approaches that could be designed and put in place, notably with the aim of fostering the uptake of green cars; and iii) to the extent possible, insights into the efficiency and effectiveness of existing policies, as well as guidance on how to assess the impact of future measures. |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:oec:envddd:2012/3-en&r=reg |
| By: | di Cosmo, Valeria; Malaguzzi Valeri, Laura |
| Abstract: | In a deregulated market, the decision to build new thermal power plants rests with private investors and they will decide whether to invest on the basis of expected profits. This paper evaluates how such profits are affected by the increasing presence of wind generation. We use hourly historical data for the Irish Single Electricity Market, a compulsory pool market with capacity payments, and simulate future series of electricity shadow prices, bids of representative plants and wind generation. We estimate the correlation between shadow price and installed wind capacity on the basis of past data, finding a negative correlation. We then evaluate the effects of increased wind capacity on thermal power plants' expected profits. We find that increasing installed wind from the current level of 2000MW to about 3000MW causes a larger decrease in profits for baseload gas plants and a smaller decrease for less flexible coal-fuelled plants. The decrease in profits is of the order of 1 to 2 per cent. |
| Keywords: | data/electricity/wind generation |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp446&r=reg |
| By: | Christopher R. Knittel |
| Abstract: | From 1864 to 1972, the real price of oil fell by, on average, over one percent per year. This trend dramatically broke when prices for crude increased by over 650 percent from 1972 to 1980. Policy makers adopted several policies designed to keep oil prices in check and reduce consumption. Missing from these policies were taxes on either oil or gasoline, prompting a long economics literature documenting the inefficiencies of these alternative policies. In this paper, I review the policy discussion related to the transportation sector that occurred during the time through the lens of the printed press. In doing so, I pay particular attention to whether gasoline taxes were "on the table," as well as how consumers viewed the inefficient set of policies that were ultimately adopted. The discussions at the time suggest that meaningful changes in gasoline taxes were on the table; the public discussion seemed to be much greater than it is today. Some in Congress and many presidential advisors in the Nixon, Ford, and, Carter administrations supported and proposed gasoline taxes. The main roadblocks for taxes were Congress and the American people. Polling evidence at the time suggests that consumers preferred price controls and rationing and vehicle taxes over higher gasoline taxes or letting gasoline prices clear the market. Given the saliency of rationing and vehicle taxes, it seems difficult to argue that these alternative polices were adopted because they hide their true costs. |
| JEL: | H23 K32 L50 L62 L91 Q38 Q41 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18685&r=reg |