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on Regulation |
| By: | Ralf Martin; Mirabelle Muûls; Laure B. de Preux; Ulrich J. Wagner |
| Abstract: | When regulated firms are offered compensation to prevent them from relocating, 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 analyzing compensation rules proposed under the EU Emissions Trading Scheme, where emission permits are allocated free of charge to carbon intensive and trade exposed industries. We show that this practice results in substantial overcompensation for given carbon leakage risk. Efficient permit allocation reduces the aggregate risk of job loss by more than half without increasing aggregate compensation. |
| JEL: | F18 H23 H25 Q52 Q54 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19097&r=reg |
| By: | Schober, Dominik |
| Abstract: | Ownership unbundling and third party access are discussed as two options of unbundling in both the literature and political discussions. Focusing on the South American electricity sector, I contrast static and dynamic impacts of ownership unbundling and third party access regimes on customer prices. Substantially different results are found using dynamic rather than static analysis. In particular, negative short term effects of ownership unbundling found in static models are approximately cancelled out by subsequent positive impacts in the dynamic model. Third party access seems to allow for similar benefits while avoiding the (restructuring) costs of ownership unbundling. Previously estimated static models thus appear to suffer from either omitted variable biases or endogeneity problems of static non-difference models. -- |
| Keywords: | (De)Regulation,dynamic panel data analysis,electricity markets,market organization,unbundling,non-discriminatory (third party) access |
| JEL: | L42 L51 L52 L94 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:13033&r=reg |
| By: | Curtis, John A.; di Cosmo, Valeria; Deane, Paul |
| Abstract: | This paper examines the effect on Ireland's Single Electricity Market (SEM) of the UK's unilateral policy to implement a carbon price floor for electricity generation based on fossil-fuel. We simulate electricity markets and find that, subject to efficient use of the interconnectors between the two markets, a carbon price floor will lead to carbon leakage, with associated emissions in the Republic of Ireland increasing by 8% and SEM's electricity prices increasing by 2.4%. As the carbon price floor does not affect the number of ETS allowances no change is anticipated in aggregate European emissions. We also find that the EU's proposal to postpone ETS allowance auctions will reduce Irish emissions somewhat but that the trade opportunities associated with the UK carbon price floor means that emissions reductions in Ireland will be lower than might have been otherwise. A carbon price floor will result in substantial tax revenues and had the carbon price floor been implemented in Northern Ireland the larger share of taxes remitted would be paid by Republic of Ireland customers within the SEM. A carbon price floor in the Republic of Ireland is a potential policy option that would generate revenues in excess of ?250 million but associated electricity prices increases in excess of 17% would have significant negative welfare and competitiveness effects. |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp458&r=reg |
| By: | Valentina Bosetti (Department of Economics, Bocconi University, Fondazione Eni Enrico Mattei and Euro-Mediterranean Center on Climate Change); Elena Verdolini (Fondazione Eni Enrico Mattei and Euro-Mediterranean Center on Climate Change) |
| Abstract: | This paper investigates the role of Intellectual Property Rights (IPR) protection and Environmental Policies (EPs) on clean (renewable) and dirty (fossil-based) technology diffusion from top-innovators. IPR protection and EPs are extensively debated policy tools, as IPR protection addresses knowledge market failure, while EPs respond to pressing local and global environmental externalities. A model of monopolistic competition inspired by the recent trade literature shows that the profits associated with exporting a blueprint are a function of the quality of the idea and of market and institutional characteristics of the receiving country. We test the empirical implications of our model using patent data in renewable and fossil efficient power technologies for 13 top innovating countries and 40 patenting authorities. We improve on previous contributions by accounting for unobserved heterogeneity and for the endogeneity of policy proxies through a Generalized Method of Moment estimator. We show that knowledge transfer through patent duplication increases with the level of IPR protection, but with slight diminishing marginal returns. The effect is stronger for clean technologies, which are arguably less mature and more sensitive to uncertainty. Commitment to EPs also increases the incentives for patent duplication. The magnitude of the effect is conditional on the nature of the technology and on the specific policy instrument. |
| Keywords: | Technology Diffusion and Transfer, Innovation, Patents, Energy Technologies, Environmental Policy, Intellectual Property Rights |
| JEL: | O33 O34 Q55 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2013.43&r=reg |
| By: | Fageda, Xavier, 1975-; Flores-Fillol, Ricardo |
| Abstract: | This paper provides a theoretical and empirical analysis of the relationship between airport congestion and airline network structure. We find that the development of hub-and-spoke (HS) networks may have detrimental effects on social welfare in presence of airport congestion. The theoretical analysis shows that, although airline pro ts are typically higher under HS networks, congestion could create incentives for airlines to adopt fully-connected (FC) networks. However, the welfare analysis leads to the conclusion that airlines may have an inefficient bias towards HS networks. In line with the theoretical analysis, our empirical results show that network airlines are weakly infl uenced by congestion in their choice of frequencies from/to their hub airports. Consistently with this result, we con firm that delays are higher in hub airports controlling for concentration and airport size. Keywords: airlines; airport congestion; fully-connected networks, hub-and-spoke net- works; network efficiency JEL Classifi cation Numbers: L13; L2; L93 |
| Keywords: | Línies aèries, Aeroports -- Direcció i administració, Oligopolis, Empreses -- Direcció i administració, Aviació comercial, 338 - Situació econòmica. Política econòmica. Gestió, control i planificació de l'economia. Producció. Serveis. Turisme. Preus, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:urv:wpaper:2072/211753&r=reg |
| By: | Silvester van Koten (European University Institute); Andreas Ortmann (The University of New South Wales) |
| Abstract: | We try to better understand the comparative advantages of structural and behavioral remedies of deregulation in electricity markets, an eminent policy issue for which the experimental evidence is scant and problematic. Specifically, we investigate theoretically and experimentally the effects on competition of introducing a forward market which the European Commission classifies as a behavioral remedy. We compare this scenario with its best alternative, the structural remedy of adding one more competitor by divestiture. Our study contributes to the literature by introducing more realistic cost configurations, by teasing apart competition effect and asset effect, and by investigating competitor numbers that reflect the market concentration in the European electricity industries. Our experimental data suggest that introducing a forward market has a positive effect on the aggregate supply in markets with two or three major competitors, configurations typical for the newly accessed and the old European Union member states, respectively. Introducing a forward market also increases efficiency. |
| Keywords: | experimental economics |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:swe:wpaper:2012-36&r=reg |
| By: | Arik Levinson |
| Abstract: | Starting in the 1970s California's residential electricity consumption per capita stopped increasing, while other states' electricity use continued to grow steadily. Similar patterns can be seen in non-electric energy, industry, and transportation. What accounts for California's apparent energy savings? Some credit the strict energy efficiency standards for buildings and appliances enacted by California in the mid-1970s. They argue that other states and countries could replicate California's gains, and that California should build on its own success by tightening those standards further. Skeptics might point to three long-run trends that differentiate California's electricity demand from other states: (1) shifting of the U.S. population towards warmer climates of the South and West; (2) relatively small income elasticity of energy demand in California's temperate climate; and (3) evolving differences between the demographics of households in California and other states. Together, these trends account for around 90 percent of California's apparent residential electricity savings, thus providing no lessons for other states or countries considering adopting or tightening their energy efficiency standards. |
| JEL: | Q4 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19123&r=reg |
| By: | Hüschelrath, Kai; Müller, Kathrin |
| Abstract: | We study the consumer welfare effects of mergers in airline networks. Based on the development of a general classification of affected routes, we apply a difference-indifferences approach to exemplarily investigate the price effects of the America West Airlines - US Airways merger completed in 2005. We find that although average prices increased substantially on routes in which both airlines competed either on a non-stop or one-stop basis prior to the merger, substantial average price reductions observed for routes without any premerger overlap suggest that the merger led to a net increase in consumer welfare. -- |
| Keywords: | Airline industry,merger,market power,consumer welfare,price effects |
| JEL: | L40 L93 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:13028&r=reg |