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on Regulation |
| By: | Elettra Agliardi (Department of Economics, University of Bologna, Italy; The Rimini Centre for Economic Analysis, Italy); Luigi Sereno (Department of Economics, University of Bologna, Italy) |
| Abstract: | We develop a model on the optimal timing of switching from non-renewable to renewable energy sources with endogenous extraction choices under emission taxes, subsidies on renewable resources and abatement costs. We assume that non-renewable resources are "dirty" inputs and create environmental degradation, while renewable resources are more environmentally friendly, although they may be more or less productive than the exhaustible resources. The value of the switching option from non-renewable to renewable resources is characterized. Numerical applications show that an increase in emission taxes, abatement costs or demand elasticity slows down the adoption of substitutable renewable resources, while an increase in the natural rate of resource regeneration, the stock of renewable resources or the relative productivity parameter speeds up the investment in the green technology. |
| Keywords: | Non-renewable resources; Renewable resources; Environmentally friendly technologies; Abatement costs; Subsidies; Taxes; Optimal switching time; Real options |
| JEL: | D81 H23 Q28 Q38 Q40 Q50 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:11_13&r=reg |
| By: | Grischa Perino (University of East Anglia) |
| Abstract: | Private provision of public goods can only supplement government provision if individual actions affect the level of the public good. Cap-and-trade schemes reduce the overuse of common resources such as a stable climate or fish stocks by imposing a binding cap on total use by regulated agents. Any private contributions provided by means of e.g. green consumerism or life-style choices within such a scheme only impacts on who uses the resource but leaves total use unaffected. Perfect offsetting of marginal contributions is a key design element of cap-and-trade schemes. As real world cap-and-trade policies like the EU Emission Trading System have incomplete coverage, understanding what they cover is crucial for individuals aiming to contribute. Otherwise contribution efforts backfire. |
| Keywords: | cap-and-trade, green consumerism, emissions tax, crowding-out of private contributions, carbon labelling |
| JEL: | H23 H31 D64 H41 Q54 Q58 |
| Date: | 2013–01–24 |
| URL: | http://d.repec.org/n?u=RePEc:uea:wcbess:13-01&r=reg |
| By: | Miguel Vazquez; Michelle Hallack |
| Abstract: | Gas markets based on virtual hubs has been the preferred EU design. Such market designs are based on socializing network flexibility services. Nonetheless, shippers have different preferences about the network flexibility, which are not reflected in current allocation models. We propose the introduction of auction mechanisms to deal with network service allocation in the short term. The auction aims to represent simultaneously the diversity of players' preferences and the trade-offs implied by network constraints. Two sealed-bid auctions are proposed. On the one hand, an auction with one product allocates network services through the minimization of gas price differences. On the other, a multi-product (gas and line-pack storage) auction is designed to facilitate the revelation of preferences on line-pack storage. |
| Date: | 2012–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2012/43&r=reg |
| By: | Rafael Lalive; Simon Luechinger; Armin Schmutzler |
| Abstract: | Many governments subsidize regional rail service as an alternative to road traffic. This paper assesses whether increases in service frequency reduce road traffic externalities. We exploit differences in service frequency growth by procurement mode following a railway reform in Germany to address endogeneity of service growth. Increases in service frequency reduce the number of severe road traffic accidents, carbon monoxide, nitrogen monoxide, nitrogen dioxide pollution and infant mortality. Placebo regressions with sulfur dioxide and ozone yield no effect. Service frequency growth between 1994 and 2004 improves environmental quality by an amount that is worth approximately 28-40 % of total subsidies. An analysis of household behavior shows that the effects of railway services on outcome variables are driven by substitution from road to rail. |
| Keywords: | Railways, pollution, procurement, accidents |
| JEL: | Q53 R41 R48 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:zur:econwp:110&r=reg |
| By: | Ivo Bischoff; Peter Bönisch; Peter Haug; A. Illy |
| Abstract: | This paper analyses the impact of vertical grants on local public sector efficiency. First, we develop a theoretical model in which the bureaucrat sets the tax price while voters choose the quantity of public services. In this model, grants reduce efficiency if voters do not misinterpret the amount of vertical grants the local bureaucrats receive. If voters suffer from fiscal illusion, i.e. overestimate the amount of grants, our model yields an ambiguous effect of grants on efficiency. Second, we use the model to launch a note of caution concerning the inference that can be drawn from the existing cross-sectional studies in this field: Taking into account vertical financial equalization systems that reduce differences in fiscal capacity, empirical studies based on cross-sectional data may yield a positive relationship between grants and efficiency even when the underlying causal effect is negative. Third, we perform an empirical analysis for the German state of Saxony-Anhalt, which has implemented such a fiscal equalization system. We find a positive relationship between grants and efficiency. Our analysis shows that a careful reassessment of existing empirical evidence with regard to this issue seems necessary. |
| Keywords: | vertical grants, local public finance, efficiency, DEA, bureaucracy |
| JEL: | H11 H72 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:iwh:dispap:1-13&r=reg |