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on Regulation |
| By: | Oskar Lecuyer (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD : UMR56 - CNRS : UMR8568 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - AgroParisTech); Philippe Quirion (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD : UMR56 - CNRS : UMR8568 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - AgroParisTech) |
| Abstract: | This article constitutes a new contribution to the analysis of overlapping instruments to cover the same emission sources. Using both an analytical and a numerical model, we find that when the risk that the CO2price drops to zero and the political unavailability of a CO2tax (at least in the European Union) are taken into account, it can be socially beneficial to implement an additional instrument encouraging the reduction of emissions, for instance a renewable energy subsidy. Our analysis has both a practical and a theoretical purpose. It aims at giving economic insight to policymakers in a context of increased uncertainty concerning the future stringency of the European Emission Trading Scheme. It also gives another rationale for the use of several instruments to cover the same emission sources, and shows the importance of accounting for corner solutions in the definition of the optimal policy mix. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-00801927&r=reg |
| By: | Garth Heutel; David L. Kelly |
| Abstract: | Government policies that are not intended to address environmental concerns can nonetheless distort prices and affect firms' emissions. We present an analytical general equilibrium model to study the effect of distortionary subsidies on factor prices and on environmental outcomes. We model an output subsidy, a capital subsidy, relief from environmental regulation, and a direct cash subsidy. In exchange for receiving subsidies, firms must agree to a minimum level of labor employment. Each type of subsidy and the employment constraint create both output effects and substitution effects on input prices and emissions. We calibrate the model to the Chinese economy, where government involvement affects emissions from both state-owned enterprises and private firms. Variation in production substitution elasticities does not substantially affect input prices, but it does substantially affect emissions. |
| JEL: | H23 Q52 Q58 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18924&r=reg |
| By: | Färe, Rolf (Dept. of Economics, Oregon State University); Grosskopf, Shawna (Dept. of Applied Economics, Oregon State University); Lundgren, Tommy (CERE, Centre for Environmental and Resource Economics); Marklund, Per-Olov (CERUM); Zhou, Wenchao (CERUM) |
| Abstract: | The production of desirable (good) outputs is frequently accompanied by unintended production of undesirable (bad) outputs. If two or more of these undesirable outputs are produced as byproducts, one may ask: ‘Which bad is worst?’ By worst we mean which bad inhibits the production of desirable outputs the most if it is regulated. We develop a model based on Leif Johansen’s capacity framework by estimating the capacity limiting effect of the bads. Our model resembles what is referred to as the von Liebig Law of the Minimum, familiar from the agricultural economics literature. To illustrate our model we apply our approach to a firm level data set from the Swedish paper and pulp industry. |
| Keywords: | von Liebig Law of the Minimum; DEA; emissions; regulation |
| JEL: | D24 Q01 Q50 |
| Date: | 2013–03–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:slucer:2013_002&r=reg |
| By: | Tobias Fleitera (ISI - a Fraunhofer Institute for Systems and Innovation Research - a Fraunhofer Institute for Systems and Innovation Research); Joachim Schleich (MTS - Management Technologique et Strategique - Grenoble École de Management (GEM), ISI - Fraunhofer Institute for Systems and Innovation Research - Fraunhofer Institute for Systems and Innovation Research); Ployplearn Ravivanpong (ISI - Fraunhofer Institute for Systems and Innovation Research - Fraunhofer Institute for Systems and Innovation Research) |
| Abstract: | This paper empirically investigates the factors driving the adoption of energy-efficiency measures by small and medium-sized enterprises (SMEs). Our analyses are based on cross-sectional data from SMEs which participated in a German energy audit program between 2008 and 2010. In general, our findings appear robust to alternative model specifications and are consistent with the theoretical and still scarce empirical literature on barriers to energy efficiency in SMEs. More specifically, high investment costs, which are captured by subjective and objective proxies, appear to impede the adoption of energy-efficient measures, even if these measures are deemed profitable. Similarly, we find that lack of capital slows the adoption of energy-efficient measures, primarily for larger investments. Hence, investment subsidies or soft loans (for larger invest-ments) may help accelerating the diffusion of energy-efficiency measures in SMEs. Other barriers were not found to be statistically significant. Finally, our findings provide evidence that the quality of energy audits affects the adoption of energy-efficiency measures. Hence, effective regulation should involve quality standards for energy au-dits, templates for audit reports or mandatory monitoring of energy audits. |
| Keywords: | Energy efficiency in SMEs; adoption of energy-efficiency measures; barriers to energy efficiency; |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:hal:gemptp:hal-00805748&r=reg |
| By: | Tim Laing; Misato Sato; Michael Grubb; Claudia Comberti |
| Abstract: | As an increasing number of countries, regions, cities and states implement emission trading policies to limit cap CO2 emission, many turn to the experience of the European Union’s Emissions Trading System, as the largest greenhouse gas emissions trading system currently operating. The aim of this paper is to survey the literature conducted over the past eight years of the scheme’s existence, particularly those focusing on three key challenging areas of evaluation: emissions impacts in relation to the balance with economic objectives; investment and innovation impacts; and finally profits and price impacts. Among the key conclusions is that the lack of flexibility in the structure of the EU ETS cap, and its inability to adjust to radically shifted wider economic conditions, in the shape of the financial crisis, threatens to undermine its efficacy in providing incentives for abatement. |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp106&r=reg |
| By: | Suhui Li; Avi Dor |
| Abstract: | Regulatory entry barriers to hospital service markets, namely Certificate of Need (CON) regulations, are enforced in many states; although no longer federally mandated, policy makers in other states are considering reinstating CON policies in tandem with service expansions mandated under the Affordable Care Act. While numerous studies have examined the impacts of CON on hospital volumes, demand responses to actual hospital entry into local hospital markets are not well understood. In this paper, we empirically examine the demand-augmenting, demand-redistribution, and risk-allocation effects of hospital entry by studying the cardiac revascularization markets in Pennsylvania, a state in which dynamic market entry occurred after repeal of CON in 1996. Our findings with respect to demand-augmentation are mixed: we find robust evidence that high entrant market share mitigated the declining incidence of coronary artery bypass graft (CABG), but it had no significant effect on the rising trend in percutaneous coronary intervention (PCI) procedures, among patients with coronary artery disease. Consequently, incumbent hospitals experienced a decrease in the likelihood of PCI due to entry, thereby indicating a shift in demand away from incumbents to entrants, namely business-stealing. Results of our analyses further indicate that entry by new cardiac surgery centers tended to sort high-severity patients into the more invasive CABG procedure and low-severity patients into the less invasive PCI procedures. Thus, from a welfare perspective our results are mixed: on the one hand, free-entry may lead to improved access rather than business stealing for CABG procedures; on the other hand, the empirical evidence is in favor of business-stealing for PCI procedures. Moreover, free-entry improves the match between underlying medical risk and treatment intensity. These findings underscore the importance of considering market-level strategic responses by hospitals when regulatory barriers to entry are rescinded. |
| JEL: | I1 L4 L5 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18926&r=reg |
| By: | Arnaud De La Tour (CERNA - Centre d'économie industrielle - MINES ParisTech - École nationale supérieure des mines de Paris); Matthieu Glachant (CERNA - Centre d'économie industrielle - MINES ParisTech - École nationale supérieure des mines de Paris); Yann Ménière (CERNA - Centre d'économie industrielle - MINES ParisTech - École nationale supérieure des mines de Paris) |
| Abstract: | Except in few locations, photovoltaic generated electricity remains considerably more expensive than conventional sources. It is however expected that innovation and learning-bydoing will lead to drastic cuts in production cost in the near future. The goal of this paper is to predict the cost of PV modules out to 2020 using experience curve models, and to draw implications about the cost of PV electricity. Using annual data on photovoltaic module prices, cumulative production, R&D knowledge stock and input prices for silicon and silver over the period 1990 - 2011, we identify a experience curve model which minimizes the difference between predicted and actual module prices. This model predicts a 67% decrease of module price from 2011 to 2020. This rate implies that the cost of PV generated electricity will reach that of conventional electricity by 2020 in the sunniest countries with annual solar irradiation of 2000 kWh/year or more, such as California, Italy, and Spain. |
| Keywords: | Learning curve; solar photovoltaic energy; cost prediction |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00805668&r=reg |
| By: | Anil K Kashyap; Natalia Kovrijnykh |
| Abstract: | This paper analyzes a model where investors use a credit rating to decide whether to finance a firm. The rating quality depends on the unobservable effort exerted by a credit rating agency (CRA). We analyze optimal compensation schemes for the CRA that differ depending on whether a social planner, the firm, or investors order the rating. We find that rating errors are larger when the firm orders it than when investors do. However, investors ask for ratings inefficiently often. Which arrangement leads to a higher social surplus depends on the agents' prior beliefs about the project quality. We also show that competition among CRAs causes them to reduce their fees, put in less effort, and thus leads to less accurate ratings. Rating quality also tends to be lower for new securities. Finally, we find that optimal contracts that provide incentives for both initial ratings and their subsequent revisions can lead the CRA to be slow to acknowledge mistakes. |
| JEL: | D82 D83 D86 G24 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18923&r=reg |
| By: | Paul Madden; Mario Pezzino |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:man:sespap:1304&r=reg |
| By: | Ralf Martin; Mirabelle Muûls; Laure B. de Preux; Ulrich J. Wagner |
| Abstract: | When industry compensation is offered to prevent relocation of regulated firms, efficiency requires that payments be distributed across firms so as to equalize marginal relocation probabilities, weighted by the damage caused by relocation. We formalize this fundamental economic logic and apply it to analyze industry compensation rules proposed under the EU Emissions Trading Scheme, which allocate permits for free to carbon and trade intensive industries. We estimate that this practice will result in overcompensation in the order of €6.7 billion every year. Efficient allocation would reduce the aggregate risk of job loss by two thirds without increasing aggregate compensation. |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp85&r=reg |
| By: | Xavier Fageda (Faculty of Economics, University of Barcelona); Rafael Rubio (Faculty of Economics, University of Barcelona); Montserrat Termes (Faculty of Economics, University of Barcelona) |
| Abstract: | Previous studies have identified the rivalry among technological platforms as one of the main driving forces of broadband services penetration. This paper draws on data from the Spanish market between 2005 and 2011 to estimate the main determinants of broadband prices. Controlling for broadband tariffs features and network variables, we examine the impact of the different modes of competition on prices. We find that inter-platform competition has no significant effects over prices, while intra-platform competition is a key driver of the prices charged in the broadband market. Our analysis suggests that the impact of different types of competition on prices is critically affected by the levels of development of the broadband market achieved by the considered country. |
| Keywords: | broadband prices, inter-platform competition, intra-platform competition. JEL classification: L38, L51, L96 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:ira:wpaper:201303&r=reg |