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on Regulation |
| By: | Tangerås, Thomas (Research Institute of Industrial Economics (IFN)) |
| Abstract: | I analyze renewable electricity policy in a multinational electricity market with transmission investment. If national policy makers choose support schemes to maximize domestic welfare, then a trade policy motive arises operating independently of any direct benefit of renewable electricity. The model predicts electricity importing (exporting) countries to choose policies which reduce (increase) electricity prices. A narrow pursuit of domestic objectives distorts transmission investment, thereby market integration, below the efficient level. Distortions cannot be corrected by imposing national renewable targets alone. Instead, subsidies to transmission investment and a harmonization of and reduction in the number of policy instruments can improve welfare. |
| Keywords: | Market integration; Renewable electricity; Trade policy; Transmission investment |
| JEL: | D23 F15 Q48 Q56 |
| Date: | 2013–06–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0968&r=reg |
| By: | Felix Munoz-Garcia; Sherzod Akhundjanov (School of Economic Sciences, Washington State University) |
| Abstract: | This paper investigates the production decisions of polluting and green fi?rms, and how their profi?ts are affected by environmental regulation. We demonstrate that emission fees entail a negative effect on fi?rms? profi?ts, since they increase unit production costs. However, fees can also produce a positive effect for a relatively inefficient ?firm, given that environmental regulation ameliorates its cost disadvantage. If such a disadvantage is sufficiently large, we show that the positive effect dominates, thus leading this ?firm to actually favor the introduction of environmental policy, while relatively efficient fi?rms oppose regulation. Furthermore, we show that such support can not only originate from green firms but, more surprisingly, also from polluting companies. |
| Keywords: | Cost asymmetries; Cost disadvantage; Emission fees; Green firms |
| JEL: | L13 D62 H23 Q20 |
| URL: | http://d.repec.org/n?u=RePEc:wsu:wpaper:munoz-13&r=reg |
| By: | Ronald Huisman (Erasmus School of Economics & IEB); Victoria Stradnic (Erasmus School of Economics); Sjur Westgaard (Norwegian University of Science and Technology) |
| Abstract: | Many countries have introduced policies to stimulate the production of electricity in a sustainable or renewable way. Theoretical and simulation studies provide evidence that the introduction of renewable energy promotion policies lead to lower electricity prices as sustainable energy supply as wind and solar have very low or even zero marginal costs. Empirical support for this result is relatively scarce. The motivation for this study is to provide additional empirical evidence on how the growth of low marginal costs renewable energy supply such as wind and solar influences power prices. We do so indirectly studying Nord Pool market prices where hydro power is the dominant supply source. We argue that the marginal costs of hydro production varies depending on reservoir levels that determine hydro production capacity. Hydro power producers have an option to produce or to delay production and the value of the option to delay increases when the reservoir levels decrease and the option to delay decreases in value when reservoir levels increase and producers face the risk of spillovers. Hence, an increase in reservoir levels mimics the situation of an increase of low marginal costs renewable energy in a market. Our results show that higher reservoir levels, more hydro capacity, lead to significant lower power prices. From this we conclude that an increase in low marginal costs renewable power supply reduces the power prices. The second contribution of this paper is that we develop a market clearing price model by modelling the supply curve of power that varies over time depending on fundamentals such as hydro capacity and the prices of alternative power sources and that deals with maximum prices which apply to all power markets that we know. With our result, we strengthen support for the view that an increase in wind and solar supply lowers the power price. This is good news for consumers, but it increases the costs of sustainable energy policies such as feed-in tariffs and at the same time lowers revenues and profits for power producers in case governments would abandon such policies. This effect makes the economic and policy support for renewable energy less sustainable. Policy makers have to account for this if they want to stimulate a sustainable growth of sustainable energy supply. |
| Keywords: | Energy policies, sustainable energy, market clearing price, supply curve model. |
| JEL: | C51 Q41 Q42 Q48 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2013/6/doc2013-24&r=reg |
| By: | Green, R; Staffell, I |
| Date: | 2013–07–18 |
| URL: | http://d.repec.org/n?u=RePEc:imp:wpaper:11641&r=reg |
| By: | Marius Ley (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Tobias Stucki (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Martin Wörter (KOF Swiss Economic Institute, ETH Zurich, Switzerland) |
| Abstract: | Based on patent data and industry specific energy prices for 18 OECD countries over 30 years we investigate on an industry level the impact of energy prices on green innovation activities. Our econometric models show that energy prices and green innovation activities are positively related and that energy prices have a significantly positive impact on the share of green innovations in non-green innovations. More concretely, our main model shows that a 10% increase of the average energy prices of the previous five years results in a 2.7% and 4.5% increase of the number of green innovations and the share of green innovations in non-green innovations, respectively. We also find that the impact of energy prices increases with an increasing lag between energy prices and innovation activities. Robustness tests confirm the main results. |
| Keywords: | Innovation, environment, energy prices |
| JEL: | O30 O34 Q55 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:kof:wpskof:13-340&r=reg |
| By: | OECD |
| Abstract: | This report examines the relationship between the prices for mobile communication services and some of the most popular handsets used to access these services, focusing on smartphones. The objective is to better understand different business models and how they may affect comparisons of prices. It looks at the question of how the different models for handset acquisition in different countries, and across different operators in these countries, may affect comparisons of service prices. As benchmarking of mobile communication prices provides an important indicator that is used to inform policy makers, regulators, industry and consumers, this paper examines the challenges for such price comparisons associated with handset discounts bundled with mobile communication plans. |
| Date: | 2013–07–02 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaab:224-en&r=reg |