nep-reg New Economics Papers
on Regulation
Issue of 2014‒04‒18
twelve papers chosen by
Natalia Fabra
Universidad Carlos III de Madrid

  1. Energy market liberalization and renewable energy policies in OECD countries By Francesco Vona
  2. Cost and benefit of regulatory oversight By Stan Veuger; Kristin Wilson
  3. European Energy Efficiency and Decarbonization Strategies Beyond 2030 – A Sectoral Multi-model Decomposition By Hannah Förster; Katja Schumacher; Enrica De Cian; Michael Hübler; Ilkka Keppo; Silvana Mima; Ronald D. Sands
  4. Does a Renewable Fuel Standard for Biofuels Reduce Climate Costs? By Mads Greaker; Michael Hoel; Knut Einar Rosendahl
  5. Regulating gasoline retail markets: The case of Germany By Wittmann, Nadine
  6. Product market regulation, innovation and productivity By Bruno Amable; Ivan Ledezma; Stéphane Robin
  7. On the properties of nodal price response matrix in electricity markets By Vadim Borokhov
  8. Taxing Carbon under Market Incompleteness By Valentina Bosetti; Marco Maffezzoli
  9. The Nexus between Electricity Consumption and Economic Growth: New Insights from Meta Analysis By Jamal BOUOIYOUR; Refk SELMI; Ilhan OZTURK
  10. Implications of integrating electricity supply dynamics into life cycle assessment: a case study of renewable distributed generation By Amor, Mourad Ben; Gaudreault, Caroline; Pineau, Pierre-Olivier; Samson, Réjean
  11. Transforming Power: social science and the politics of energy choices By Andy Stirling
  12. The Illiquidity of Water Markets By Donna, Javier; Espin-Sanchez, Jose

  1. By: Francesco Vona (OFCE SciencesPo)
    Abstract: We investigate the effect of energy liberalizations on policies that support renewable energy in a long panel of OECD countries. We estimate this effect accounting for the endogeneity of liberalization related to joint decisions within a country’s energy strategy. Using regulation in other industries as instruments, we find that energy liberalization increases the public support to renewable energy. The effect of liberalization is the second largest after the effect of per-capita income and is fully driven by reductions in entry barriers, while the effect of privatization is negative. Finally, our results are robust to dynamic specifications and various policy indicators.
    Keywords: Renewable energy policy, energy market liberalization, instrumental variables, applied political economy
    JEL: Q42 Q48 D72 O38
    Date: 2014
  2. By: Stan Veuger (American Enterprise Institute); Kristin Wilson
    Abstract: Can access to regulators provide operational benefits to firms?
    Keywords: Regulatory policy,Regulation,economics,commercial banking
    JEL: A
    Date: 2013–09
  3. By: Hannah Förster (Öko-Institut e.V., Germany); Katja Schumacher (Öko-Institut e.V., Germany); Enrica De Cian (Fondazione Eni Enrico Mattei (FEEM), Italy and Centro Mediterraneo per i Cambiamenti Climatici (CMCC), Italy); Michael Hübler (Centre for European Economic Research, Mannheim, Germany); Ilkka Keppo (University College London, UCL Energy Institute, UK); Silvana Mima (PACTE-EDDEN-CNRS-UPMF, France); Ronald D. Sands (U.S. Department of Agriculture, Economic Research Service, USA)
    Abstract: Energy efficiency and decarbonization are important elements of climate change mitigation. We draw on European mitigation scenarios from the EMF28 modeling exercise to decompose economy-wide and sectoral emissions into their main components. We utilize the Logarithmic Mean Divisia Index (LMDI) to gain insights into five effects: affluence, energy intensity, carbon intensity, conversion efficiency, and structural change. Economy-wide analysis suggests that energy efficiency improvements (including end-use efficiency of economic production and structural change of the economy) determine emission reductions short to medium term while decarbonization becomes more important in the long run. Sectoral analysis suggests that electricity generation holds the largest potential for decarbonization. Mitigation in the transport and energy-intensive sectors is limited by technology availability, forcing output and energy inputs to decline to meet the given mitigation pathways. We conclude that energy efficiency improvements could bridge the time until carbon-free technologies mature, while their quick development remains essential.
    Keywords: Decomposition Analysis, Decarbonization, Model Intercomparison
    JEL: Q4 Q5 Q51
    Date: 2014–03
  4. By: Mads Greaker (Statistics Norway); Michael Hoel (University of Oslo); Knut Einar Rosendahl (Statistics Norway)
    Abstract: Recent literature on biofuels has questioned whether biofuels policies are likely to reduce the negative effects of climate change. In this paper we make two contributions to the literature. First, we study the market effects of a renewable fuel standard in a dynamic model taking into account that oil is a non-renewable resource. Second, we model emissions from land use change explicitly when we evaluate the climate effects of the renewable fuel standard. We find that global extraction of oil is postponed as a consequence of the renewable fuel standard. Thus, if emissions from biofuels are negligible, the standard will have beneficial climate effects. Furthermore, we find that the standard also tends to reduce total fuel (i.e., oil plus biofuels) consumption initially. Hence, even if emissions from biofuels are non-negligible, a renewable fuel standard may still reduce climate costs. In fact our simulations show that even for biofuels that are almost as emissions-intensive as oil, a renewable fuel standard has beneficial climate effects.
    Keywords: Blending Mandate, Renewable Fuel Standard, Biofuels, Climate Costs
    JEL: Q27 Q41 Q54
    Date: 2014–03
  5. By: Wittmann, Nadine
    Abstract: In 2011, price peaks in retail gasoline prices caused public outrage and attracted the attention of German regulatory agencies. After having examined the market, competition authorities concluded that tacit collusion existed but could not easily be prosecuted under the given competition law. In several other countries, various types of regulatory schemes are implemented to tackle tacit collusive behavior. E.g. there are price ceilings established in Luxembourg or per day limits of price increases given in Austria. However, research has found that none of them has led to satisfactory results. Hence, the following paper proposes a different regulatory approach, i.e. the implementation of corrective taxes. Results show that a special type of variable tax scheme successfully manages to render collusion an unprofitable business. In addition, it is also easy to levy and monitor. Thereby, the inherent vice of the gasoline retail market, i.e. the transparency that enables tacit - and therefore non-prosecutable - collusion, could be turned into a regulatory virtue as it becomes a powerful means to help successfully tackle imperfect competition and to bring about a more efficient market outcome. --
    Keywords: gasoline retail market,regulation,market structure and antitrust,collusion
    JEL: Q48 D42 D43
    Date: 2014
  6. By: Bruno Amable (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris 1 - Panthéon-Sorbonne, CEPREMAP - Centre pour la recherche économique et ses applications, IUF - Institut Universitaire de France - Ministère de l'Enseignement Supérieur et de la Recherche Scientifique); Ivan Ledezma (LEDa - Université Paris-Dauphine, IRD - DIAL - UMR 225); Stéphane Robin (PRISM - Sorbonne - Pôle de Recherche Interdisciplinaire en Sciences du Management)
    Abstract: Several recent policy and academic contributions consider that liberalising product markets would foster innovation and growth. This paper analyses the innovation-productivity relationship at the industry-level for a sample of OECD manufacturing industries. We pay particular attention to the vertically-induced influence of product market regulation (PMR) of key input sectors of the economy on the innovative process of manufacturing and its consequences on productivity. We test for a differentiated effect of this type of PMR depending on whether countries are technological leaders or laggards in a given industry and for a given time period. Contrary to the most widespread policy claims, the innovation-boosting effects of liberalisation policies at the leading edge are systematically not supported by the data. These findings question the relevance of a research and innovation policy based on liberalisation.
    Keywords: Product market regulation; innovation; productivity; growth
    Date: 2014–03
  7. By: Vadim Borokhov
    Abstract: We establish sufficient conditions for nodal price response matrix in electric power system to be symmetric and negative semi-definite. The results are applicable for electricity markets with nonlinear and intertemporal constraints.
    Date: 2014–04
  8. By: Valentina Bosetti; Marco Maffezzoli
    Abstract: This paper is the first attempt, to the best of our knowledge, to study the impact of a carbon tax by means of a heterogeneous agents model. The objectives of the paper are two: i) To assess how the results of a representative agent model compare to those coming from a model accounting for heterogeneity across agents when evaluating aggregate economic and environmental impacts of a carbon tax; ii) To assess the distributional implications of a carbon tax and how they can be mitigated through different recycling schemes. We find that heterogeneous agents models may deliver different results from those derived using a representative agent model, the main tool used to guide policy making so far. In particular, we find evidence of a double dividend for several recycling schemes and carbon taxes as high as 20% of the energy price. In addition, we find the potential for redistributive channels related to carbon policies that can only be appreciated applying this type of modeling. JEL codes: Q58, Q54, E2.
    Date: 2014
  9. By: Jamal BOUOIYOUR; Refk SELMI; Ilhan OZTURK
    Abstract: The Nexus between Electricity Consumption and Economic Growth: New Insights from Meta Analysis
    Date: 2014–04
  10. By: Amor, Mourad Ben; Gaudreault, Caroline; Pineau, Pierre-Olivier; Samson, Réjean
    Abstract: Electricity supply is frequently cited as a significant hot spot in life cycle assessment (LCA) results. Despite its importance, however, LCA research continues to overuse simplified methodologies regarding electricity supply modeling. This work aims to demonstrate the usefulness of electricity trade analysis (proposed model) for integrating the short-term dynamics of electricity supply and refining LCA results. Distributed generation using renewable energy is applied as a case study to demonstrate how electricity trade analysis provides more refined estimates when environmental impact abatements are assessed compared with the conventional (simplified) approaches in LCA. Grid-connected photovoltaic panel (3 kWp mono- and poly-crystalline) and micro-wind turbine (1, 10 and 30 kW) environmental impact abatements are investigated by determining the displaced marginal electricity production on an hourly basis. The results indicate that environmental impact abatements calculated using the developed short-term time horizon approach can be significantly different (up to 200% difference) from those obtained using a simplified approach. Recommendations are provided to LCA practitioners to address this issue of differing results.
    Keywords: Life cycle assessment; Short-term marginal technology; Electricity dynamics; Wind; Solar.
    JEL: Q42 Q54 Q56
    Date: 2014–03–29
  11. By: Andy Stirling (SPRU, University of Sussex, UK)
    Keywords: power, social science, transformation, energy transitions, renewable energy, nuclear power, climate geoengineering, sustainability, reflexive governance, sociotechnical regimes, planetary boundaries
    Date: 2014–04
  12. By: Donna, Javier; Espin-Sanchez, Jose
    Abstract: We explore a particular historical episode that switched from a market institution (auctions) to a non-market institution (fixed quotas with a ban on trading) to allocate water. This water is used by farmers for agricultural purposes; some of the farmers are liquidity constraints. We present a model in which farmers face liquidity constraints to explain why the change took place. From a positive perspective, we show that demand is underestimated if these liquidity constraints are not taken into account. We use a dynamic discrete choice model to estimate demand during the auction period; we also estimate the probability of being liquidity constrained by a farmer. From a normative perspective, auctions achieve the first-best allocation only in the absence of liquidity constraints; the quota achieves the first best allocation only if farmers are homogeneous in productivity. We compute the welfare under both institutions using the estimated parameters of the structural model.
    Keywords: Organization of Production, Institutions, Financial Markets, Market Efficiency, Water
    JEL: D02 D53 G14 L23 Q25
    Date: 2014–02

This nep-reg issue is ©2014 by Natalia Fabra. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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