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on Regulation |
| By: | Meredith Fowlie; Nicholas Muller |
| Abstract: | Much of the air pollution currently regulated under U.S. emissions trading programs is non-uniformly mixed, meaning that health and environmental damages depend on the location and dispersion characteristics of the sources. Existing policy regimes ignore this fact. Emissions are penalized at a single permit price, regardless of the location of the source. In theory, differentiated policies can be designed to accommodate non-uniformly mixed pollution using emissions penalties that vary with emissions damages. Under perfect certainty, damage-based policy differentiation is unambiguously welfare improving. In the presence of uncertainty about damages and abatement costs, differentiated policies need not welfare dominate simpler, undifferentiated designs. Using rich data from a major U.S. emissions trading program, we estimate the welfare impacts of policy differentiation. Surprisingly, we find that differentiated emissions trading results in welfare loss as compared to the undifferentiated trading regime that was implemented. This result manifests because ex post realized abatement costs appear to have exceeded expectations. We further show that, in this context, a differentiated price-based policy welfare dominates the differentiated quantity-based alternative. |
| JEL: | Q58 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18801&r=reg |
| By: | Christine Brandstätt; Gert Brunekreeft; Nele Friedrichsen |
| Abstract: | Energy and climate policy drive large scale integration of distributed generation and demand side management, with massive consequences for distribution grids. New technologies and actors shape the transformation of electricity networks towards smart systems. We argue that future regulation of smart grids needs to allow more flexibility. Firstly, the core of network monopoly starts to weaken allowing for more third party involvement. Secondly, the increasing number and heterogeneity of stakeholders makes “one-size-fits-all” regulation simply less suitable, whilst regulation needs to take account of various interests. In this paper we discuss stakeholder involvement and make policy recommendations to render regulation of smart systems more flexible. |
| Keywords: | smart grids, regulation, information management, third-party involvement |
| JEL: | D02 D70 L51 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:bei:00bewp:0013&r=reg |
| By: | Gawel, Erik; Strunz, Sebastian; Lehmann, Paul |
| Abstract: | In this paper, we analyze the rationale for an energy policy mix when the European Emissions Trading scheme (ETS) is considered from a public choice perspective. That is, we argue that the economic textbook model of the ETS implausibly assumes 1) efficient policy design and 2) climate protection as the single objective of policy intervention. Contrary to these assumptions, we propose that the ETS originates from a political bargaining game within a context of multiple policy objectives. In particular, the emissions cap is negotiated between regulators and emitters with the emitters' abatement costs as crucial bargaining variable. This public choice view yields striking implications for an optimal policy mix comprising RES supporting policies. Whereas the textbook model implies that the ETS alone provides sufficient climate protection, our analysis suggests that support for renewable energies 1) contributes to a more effective ETS-design and 2) may even increase the overall efficiency of climate and energy policy if other externalities and policy objectives besides climate protection are considered. Thus, our analysis also shows that a public choice view not necessarily entails negative evaluations concerning efficiency and effectiveness of a policy mix. -- |
| JEL: | H23 Q42 Q48 Q58 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ufzdps:52013&r=reg |
| By: | Andreas Schröder; Thure Traber; Claudia Kemfert |
| Abstract: | EMELIE-ESY is a partial equilibrium model with focus on electricity markets. Private investors optimize their generation capacity investment and dispatch over the horizon 2010 to 2050. In the framework of the Energy Modeling Forum 28, we investigate how climate policy regimes affect market developments under different technology availabilities and climate policies on the European power markets. The model projects an only minor increase of power consumption because of higher wholesale prices or energy efficiency current climate policy, and a balanced consumption pathway under ambitious climate policy. These results contrast with findings of POLES and PRIMES models in the reference case that predict unexpected heavy consumption increases by 2050. By contrast, we find no investment into Carbon Capture and Storage (CCS) and a diminishing share of nuclear energy. We find that renewable energy supply extension as projected can sufficiently meet electricity consumption complemented by only few capacity investments in conventional technology. |
| Keywords: | Electricity markets, investment, climate policy |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1268&r=reg |
| By: | Laurens Cherchye; Bram De Rock; Barnabé Walheer |
| Keywords: | DEA; allocation efficiency; cost inefficiency; environment; CO2 emissions; electric utilities |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:eca:wpaper:2013/141151&r=reg |
| By: | Martin Wörter (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Tobias Stucki (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Christian Soltmann (Swiss Federal Institute of Intellectual Property, Switzerland) |
| Abstract: | While recent literature has focused on explaining the determinants of green innovations, it is not well understood how such innovations affect performance. To analyse the relationship between green innovation and performance, new industry-level panel data were exploited: these include 12 OECD countries, the whole manufacturing sector and a period of 30 years. The results show that green inventions are U-shape related to performance. However, the turning point is quite high and hence only relevant for a few industries. This indicates that - given the current level of green promotion - market incentives alone are not sufficient to allow the green invention activities of industries to rise considerably. |
| Keywords: | Innovation, R&D, patents, environment, technological change, performance |
| JEL: | O30 O34 Q55 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:kof:wpskof:13-330&r=reg |
| By: | Vilen Lipatov, Gregor Langus, Damien Neven (Graduate Institute of International Studies) |
| Abstract: | This paper analyzes the effect of injunctions on royalty negotiations for standard essential patents. We develop a model in which courts grant injunctions only when they have sufficient evidence that the prospective licensee is unwilling, in line with the way we understand Courts to operate in Europe. In such a framework the prospective licensee has a powerful strategic tool: the offers that he makes to the patent holder will affect the royalty rate that the Court may adopt as well as the probability of being subject to injunctions (and the liability for litigation costs). We find that despite the availability of injunctions, the holder of a sufficiently weak patent will end up accepting below FRAND rates, in particular when litigation cost are high. We also find that the prospective licensee will sometimes prefer to litigate and the holder of a sufficiently strong patent will always end up in litigation by rejecting offers below FRAND. This arises in particular when the prospective licensee has little to fear from being found unwilling, namely when the trial takes time (so that the threat of injunctions is less powerful), and when litigation costs are low. Importantly, we thus find that hold up (royalties above the fair rate) as well as reverse hold up (royalties below the fair rate) may arise in equilibrium. |
| Keywords: | standard essential patent, injunctions, hold up, reverse hold up |
| JEL: | K41 L49 O34 |
| Date: | 2013–02–26 |
| URL: | http://d.repec.org/n?u=RePEc:gii:giihei:heidwp04-2013&r=reg |