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on Regulation |
| By: | Stan Veuger (American Enterprise Institute); Kristin Wilson (American Enterprise Institute) |
| Abstract: | Can access to regulators provide operational benefits to firms? |
| Keywords: | Regulation, Regulatory policy, economics, commercial banking |
| JEL: | A |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:aei:rpaper:691&r=reg |
| By: | Christos Genakos; Pantelis Koutroumpis; Mario Pagliero |
| Abstract: | We study the repeal of a regulation that imposed maximum wholesale and retail markups for all but five fresh fruits and vegetables. We compare the prices of products affected by regulation before and after the policy change and use the unregulated products as a control group. We find that abolishing regulation led to a significant decrease in both retail and wholesale prices. However, markup regulation affected wholesalers directly and retailers only indirectly. The results are consistent with markup ceilings providing a focal point for collusion among wholesalers. |
| Keywords: | Markups, markup regulation, policy evaluation |
| JEL: | L0 L1 L4 L5 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1310&r=reg |
| By: | Janda, Karel; Krska, Stepan |
| Abstract: | This paper examines the regulation of distribution system operators (DSOs) focused on the Czech electricity market. It presents an international benchmarking study based on data of 15 regional DSOs including two Czech operators. The study examines the application of yardstick methods using data envelopment analysis (DEA) and stochastic frontier analysis (SFA). We find that the cost efficiency of each of the Czech DSOs is different, which indicates a suitability of introduction of individual efficiency factors in the regulatory process. |
| Keywords: | Regulation, benchmarking, electricity. |
| JEL: | K23 L43 L94 |
| Date: | 2014–10–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:59442&r=reg |
| By: | Wang, Hongbo |
| Abstract: | Renewable Portfolio Standards (RPS) are U.S. state mandates that utilities produce some of their electricity using renewable energy sources in an effort to reduce greenhouse gas emissions. While advocates highlight the potential long-term benefits of RPS, critics argue that RPS will increase electricity prices due to the higher costs of renewable energy generation. However, to date, there are no published empirical studies of the effect of RPS on electricity prices. Using state-level panel data from 1990 to 2011 and the difference-in-differences (DID) method, I find that implementation increases electricity prices when the RPS policy first becomes binding. |
| Keywords: | Renewable Portfolio Standards; State electricity prices |
| JEL: | Q42 Q48 |
| Date: | 2014–10–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:59165&r=reg |
| By: | ITO Koichiro; James M. SALLEE |
| Abstract: | This paper analyzes "attribute-based regulations," in which regulatory compliance depends upon some secondary attribute that is not the intended target of the regulation. For example, in many countries, fuel-economy standards mandate that vehicles have a certain fuel economy, but heavier or larger vehicles are allowed to meet a lower standard. Such policies create perverse incentives to distort the attribute upon which compliance depends. We develop a theoretical framework to predict how actors will respond to attribute-based regulations and to characterize the welfare implications of these responses. To test our theoretical predictions, we exploit quasi-experimental variation in Japanese fuel economy regulations, under which fuel-economy targets are downward-sloping step functions of vehicle weight. Our bunching analysis reveals large distortions to vehicle weight induced by the policy. We then leverage panel data on vehicle redesigns to empirically investigate the welfare implications of attribute-basing, including both potential benefits and likely costs. |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:14057&r=reg |
| By: | Frédéric Branger (AgroParistech ENGREF and CIRED (France)); Philippe Quirion (CIRED and CNRS (France)) |
| Abstract: | We develop a stochastic model to rank different policies (tax, fixed cap and relative cap) according to their expected total social costs. Three types of uncertainties are taken into account: uncertainty about abatement costs, business-as-usual (BAU) emissions and future economic output (the two latter being correlated). Two parameters: the ratio of slopes of marginal benefits and marginal costs, and the above-mentioned correlation, are crucial to determine which instrument is preferred. When marginal benefits are relatively flatter than marginal costs, prices are preferred over fixed caps (Weitzman’s result). When the former correlation is higher than a parameter- dependent threshold, relative caps are preferred to fixed caps. An intermediate condition is found to compare the tax instrument and the relative cap. The model is then empirically tested for seven different regions (China, the United States, Europe, India, Russia, Brazil and Japan). We find that tax is preferred to caps (absolute or relative) in all cases, and that relative caps are preferred to fixed caps in the US and emerging countries (except Brazil where it is ambiguous), whereas fixed cap are preferred to relative cap in Europe and Japan. |
| Keywords: | Instrument, Price, Quantity, Intensity Target, Regulation, post-Kyoto, Uncertainty, Climate Policy |
| JEL: | Q5 Q58 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2014.85&r=reg |
| By: | ZhongXiang Zhang (ZhongXiang Zhang, Fudan University, Shanghai (China)) |
| Abstract: | The Chinese leadership in November 2013 determined to embark upon a new wave of comprehensive reforms in China. This is clearly reflected by the key decision of the Third Plenum of the 18th Central Committee of Communist Party of China to assign the market a decisive role in allocating resources. To have the market to play that role, getting the energy prices right is crucial because it sends clear signals to both producers and consumers of energy. While the overall trend of China’s energy pricing reform since 1984 has been moving away from the pricing completely set by the central government in the centrally planned economy towards a more market-oriented pricing mechanism, the pace and scale of the reform differ across energy types. This paper discusses the evolution of price reforms for coal, petroleum products, natural gas and electricity in China, provides some analysis of these energy price reforms, and suggests few areas of reforms could take place in order to have the market to play a decisive role in allocating resources and to help China’s transition to a low-carbon economy. |
| Keywords: | Energy Prices, Tiered Prices, Differentiated Tariffs, Subsidies, Coal, Electricity, Natural Gas, Petroleum Products, Resource Taxes, Desulfurization and Denitrification, State-Owned Enterprises, China |
| JEL: | H23 H71 O13 O53 Q43 Q48 Q53 Q58 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2014.72&r=reg |
| By: | Brown, David (University of Alberta, Department of Economics); Sappington, David (University of Florida, Department of Economics) |
| Abstract: | Electricity customers who install solar panels often are paid the prevailing retail price for the electricity they generate. We show that this "net metering" policy typically is not optimal. A payment for distributed generation (w) that is below the retail price of electricity (r) will induce the welfare-maximizing level of distributed generation (DG) when centralized generation and DG produce similar (pollution) externalities. However, w can optimally exceed r when DG entails a substantial reduction in externalities. We demonstrate that the optimal DG policy varies considerably as prevailing production technologies change and that a restriction to net metering policies can both reduce aggregate welfare and have substantial distributional effects. |
| Keywords: | electricity pricing; distributed generation; net metering |
| JEL: | L11 L50 L94 Q40 Q58 |
| Date: | 2014–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:albaec:2014_012&r=reg |
| By: | Ian Cochran; Romain Hubert; Virginie Marchal; Robert Youngman |
| Abstract: | Public financial institutions (PFIs) are well-positioned to act as a key leverage point for governments’ efforts to mobilise private investment in low-carbon projects and infrastructure. The study identifies the tools, instruments and approaches used by five PFIs to directly support and scale-up domestic private sector investment in sustainable transport, energy-efficiency and renewable energy in OECD countries. Between 2010-2012, these five institutions – Group Caisse des Dépôts in France, KfW Bankengruppe in Germany, the UK Green Investment Bank, the European Investment Bank, and the European Bank for Reconstruction and Development – have provided over 100 billion euros of equity investment and financing for energy efficiency, renewable energy and sustainable transport projects. They use both traditional and innovative approaches to link low-carbon projects with finance through enhancing access to capital; facilitating risk reduction and sharing; improving the capacity of market actors; and shaping broader market practices and conditions. Les institutions financières publiques (IFP) sont particulièrement bien placées pour compléter les efforts des pouvoirs publics visant à mobiliser les investissements privés dans des projets et des infrastructures sobres en carbone. Cette étude identifie les outils, instruments et méthodes dont se servent cinq IFP pour financer et / ou accroître les investissements du secteur privé au niveau national dans les transports durables, l’efficacité énergétique et l’énergie renouvelable dans des pays membres de l’OCDE. De 2010 à 2012, ces cinq institutions – le Groupe Caisse des Dépôts en France, la KfW Bankengruppe en Allemagne, l’UK Green Investment Bank, la Banque européenne d’investissement, et la Banque européenne pour la reconstruction et le développement – ont apporté un total de plus de 100 milliards EUR d’investissements en fonds propres et de financement en faveur de projets d’efficacité énergétique, d’énergies renouvelables et de transports durables. Elles font appel à des méthodes à la fois traditionnelles et nouvelles pour lier des projets aux moyens de financement, en améliorant l’accès aux capitaux ; en facilitant la réduction et le partage des risques ; en renforçant les capacités des acteurs de marché et, dans un cadre plus large, en mettant en place des pratiques et des conditions de marché. |
| Keywords: | climate change, renewable energy, energy efficiency, climate finance, low-carbon, investment, infrastructure, public financial institutions, institutions financières publiques, finance climat, bas carbone, efficacité énergétique, changement climatique, investissement, infrastructure, énergie renouvelable |
| JEL: | G11 G18 G23 G28 O44 Q01 Q54 |
| Date: | 2014–11–06 |
| URL: | http://d.repec.org/n?u=RePEc:oec:envaaa:72-en&r=reg |
| By: | Gregmar Galinato; Hayley Chouinard (School of Economic Sciences, Washington State University) |
| Abstract: | We provide a model of environmental regulation to control transboundary pollution while considering the role of neighboring country regulations and measures of the quality of own and neighboring country government institutions. We apply a Spatial Durbin model to identify the determinants of the environmental regulations of several OECD countries. We do not find evidence of strategic interaction as the regulations of a neighbor do not significantly impact the own country regulations. However, the higher the quality of government institutions in a country, the more stringent the implementation of regulations. Additionally, government institutional quality significantly positively impacts the stringency of regulations in neighboring countries indirectly, possibly through technology choices. |
| Keywords: | Environmental regulations, institutions, spatial model, strategic interaction, spillovers |
| JEL: | H2 Q5 |
| URL: | http://d.repec.org/n?u=RePEc:wsu:wpaper:galinato-12&r=reg |
| By: | Odolinski , Kristofer (VTI); Smith , Andrew S.J. (University of Leeds, UK) |
| Abstract: | This is the first paper in the literature to formally study the cost impact of competitive tendering in rail maintenance. Sweden progressively opened up the market for rail maintenance services, starting in 2002. We study the cost impacts based on an unbalanced panel of contract areas between 1999 and 2011, using econometric techniques. We conclude that competitive tendering reduced costs by around 12%. This cost reduction was not associated with falling quality as measured by track quality class, track geometry or train derailments. We conclude that the gradual exposure of rail maintenance to competitive tendering in Sweden has been beneficial. |
| Keywords: | Railway; Infrastructure; Maintenance; Tendering; Contract; Cost |
| JEL: | H54 L92 |
| Date: | 2014–09–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ctswps:2014_017&r=reg |
| By: | Markus Groth (Leuphana University Lueneburg, Germany); Jörg Cortekar (Climate Service Center 2.0, Germany) |
| Abstract: | The option of adapting to climate change is becoming more important in climate change policy. Hence, responding to climate change now involves both mitigation to address the cause and adaptation as a response to already ongoing or expected changes. These changes are also of relevance for the energy sector in Germany. An energy sector that in the course of the German “Energiewende”, also has to deal with a fundamental shift in energy supply from fossil fuel to renewable energies in the next decades. Based on a synthesis of the current knowledge regarding the possible influences of climate change on the German energy sector along its value-added chain, the paper points out, that the possible impacts of a changing climate should be taken into account in the upcoming infrastructure projects in the course of the Energiewende. The main question here is, whether adaptation options will be implemented voluntarily by companies or not. The paper argues that this has to be the case, when the measure is a private good. If, on the contrary, the measure is a public good, additional incentives are needed. For the German energy sector, the paper shows, that governmental intervention are for example justifiable regarding measures to adapt the grid infrastructure as a critical infrastructure that needs to be protected against current and future impacts of climate change. |
| Keywords: | adaptation, climate change, critical infrastructures, environmental policy instruments, energy sector, energy transition, market failures, mitigation, private goods, public goods |
| JEL: | A11 H20 H41 L94 Q40 Q48 Q54 Q58 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:315&r=reg |
| By: | Yana Rubashkina; Marzio Galeotti; Elena Verdolini |
| Abstract: | This paper represents an empirical investigation of the “weak” and “strong” Porter Hypothesis (PH) focusing on the manufacturing sectors of European countries between 1997 and 2009. By and large, the literature has analyzed the impact of environmental regulation on innovation and on productivity generally in separate analyses and mostly focusing on the USA. The few existing studies focusing on Europe investigate the effect of environmental regulation either on green innovation or on performance indicators such as exports. We instead look at overall innovation and productivity impact that are the most relevant indicators for the “strong” PH. This approach allows us to account for potential opportunity costs of induced innovations. As a proxy of environmental policy stringency we use pollution abatement and control expenditures (PACE), which represent one of the few indicators available at the sectoral level. We remedy upon its main drawback, that of potential endogeneity of PACE, by adopting an instrumental variable estimation approach. We find evidence of a positive impact of environmental regulation on the output of innovation activity, as proxied by patents, thus providing support in favor of the “weak” PH in line with most of the literature. On the other front, we find no evidence in favor or against the “strong” PH, as productivity appears to be unaffected by the degree of pollution control and abatement efforts. |
| Keywords: | Environmental Regulation, Innovation, Productivity, Competitiveness, Porter Hypothesis |
| JEL: | Q50 Q52 Q55 Q58 O31 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:bcu:iefewp:iefewp69&r=reg |
| By: | Julien Daubanes; Pierre Lasserre |
| Abstract: | There exists no formal treatment of non-renewable resource (NRR) supply, systematically deriving quantity as function of price. We establish instantaneous restricted (fixed reserves) and unrestricted NRR supply functions. The supply of a NRR at any date and location not only depends on the local contemporary price of the resource but also on prices at all other dates and locations. Besides the usual law of supply, which characterizes the own-price effect, cross-price effects have their own law. They can be decomposed into a substitution effect and a stock compensation effect. We show that the substitution effect always dominates: a price increase at some point in space and time causes NRR supply to decrease at all other points. This new but orthodox supply setting extends to NRRs the partial equilibrium analysis of demand and supply policies. The properties of restricted and unrestricted supply functions are characterized for Hotelling (homogenous) as well as Ricardian (non homogenous) reserves, for a single deposit as well as for several deposits that endogenously come into production or cease to be active. |
| Keywords: | Allocating inventories, allocating reserves, supply theory, price effect, substitution effect, stock compensation effect; green paradox; spatial leakage, |
| JEL: | Q38 D21 H22 |
| Date: | 2014–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2014s-42&r=reg |