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on Regulation |
| By: | Han Phoumin (Economic Research Institute for ASEAN and East Asia) |
| Abstract: | Only about one-third of households in Cambodia have access to commercial energy. Full rural electrification remains far from being achieved, and energy services are mainly delivered through fuel-based engines or generators to produce electricity that can then be stored in batteries, while biomass rather than electricity is used to power many small industrial processes. The current electricity cost in Cambodia is very high, ranging from US$0.15/kWh in Phnom Penh to US$1.00/kWh in rural areas. This high cost of electricity in rural areas provides an opportunity for the Solar Home System (SHS) to be competitive, although the installed system price of SHS remains high despite a decline in global SHS prices. This study aims to (i) review the current Renewable Energies (RE) policies in Cambodia, and (ii) analyse the cost structure through the levelised cost of electricity (LCOE) of HSH compared with current electricity costs in rural areas. The results indicate that the LCOE of SHS (without any government subsidy) is about 50 percent cheaper than the current electricity price in rural areas. When factoring in a government subsidy of US$100 per SHS unit, the LCOE of SHS drops to about one third of the current electricity price in rural areas. These results imply that promoting SHS would enable rural households to cut spending on electricity, thus increasing deposable incomes and social wellbeing of rural communities. Policy support for SHS is needed from the Royal Government of Cambodia (RGC) to ensure that the upfront costs remain comparable to other countries. It is therefore important for the state-owned electricity utility, Electricité du Cambodge, and the Rural Electricity Department to look into the whole value chain of SHS from procurement through to installation. In order to achieve savings it may be necessary to make large purchases directly from manufacturers, and increase transparency in the bidding and procurement process, together with the removal of import taxes on Renewable Energy equipment, including SHS. Furthermore, providing training to local technicians and small business entrepreneurs will be necessary to promote the solar energy business in rural Cambodia. This will help to drive down the unit costs of SHS, and promote the widespread use and application of SHS in rural Cambodia. |
| Keywords: | : Government policy, Solar Home System, Solar PV, rural electrification |
| JEL: | Q42 L11 Q48 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2015-64&r=all |
| By: | Joan Batalla-Bejerano (Rovira i Virgili University); Elisa Trujillo-Baute (University of Warwick & IEB) |
| Abstract: | A successful deployment of power generation coming from variable renewable sources (VRES-E), such as wind and solar photovoltaic, strongly depends on the economic cost of system integration. This paper, in seeking to look beyond the impact of RES-E generation on the evolution of the total economic costs associated with the operation of the electricity system, aims to estimate the sensitivity of balancing market requirements and costs to the variable and non-fully predictable nature of intermittent renewable generation. The estimations reported in this paper for the Spanish electricity system stress the importance of both attributes as well as power system flexibility when accounting for the cost of balancing services. |
| Keywords: | Electricity market design, balancing services, renewable energy, variable and intermittent generation, system flexibility |
| JEL: | L51 Q41 Q42 Q47 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:doc2015-17&r=all |
| By: | Marc Baudry |
| Abstract: | Renewable energy technologies are called to play a crucial role in the reduction of greenhouse gas emissions. Since most of these technologies are immature, public policies provide for two types of support: technology push and market pull. The latter aims at creating demand for new technologies and at stimulating their diffusion. Nevertheless, due to the complex self-sustained dynamics of diffusion it is hard to determine whether newly installed capacities are imputable to the impulse effect of instruments at the beginning of the diffusion process or to the current support. The paper addresses this problem. A micro-founded model of technology diffusion is built to estimate the impact of the yearly average Return-on-Investment (RoI) on the yearly count of commissioned wind farms in six European countries over the last decade. A counter-factual analysis is carried out to assess the impact of policy instruments on the RoI and, indirectly, on diffusion. |
| Keywords: | Renewable energy; technology diffusion; wind power; market pull; technology push. |
| JEL: | O33 Q42 Q55 H23 C61 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2015-18&r=all |
| By: | Michael Pahle; Wolf-Peter Schill; Christian Gambardella; Oliver Tietjen |
| Abstract: | We analyze the interactions between different renewable support schemes and the benefits of real-time pricing (RTP) using a stylized economic model with a detailed demand-side representation calibrated to the German market. We find that there are considerable differences between a market premium on energy and capacity regarding wholesale prices, support levies and market values, which are all related to induced negative wholesale prices in case of the former. This comes along with overall higher welfare as it allows RTP consumers to increase their consumption in periods of high renewable availability. Moreover, increasing RTP shares also incurs higher welfare gains in case of a premium on energy, with the deployment-relevant group of consumers that switch from a flat-rate tariff to RTP benefiting most. Our analysis thus puts the widespread notion that higher market values are instrumental for the deployment of high shares of RES into perspective. |
| Keywords: | RES support schemes, demand side response, market value, negative prices, Germany |
| JEL: | D02 Q21 Q28 Q42 Q58 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1507&r=all |
| By: | Yu-Wen Huang (Dept. of Transportation and Communcation Management Science, Institute of Telecom Management, National Cheng Kung University) |
| Abstract: | Mobile broadband services play a key role of our daily communication, operation and entertainment. More than 393 4G/LTE networks have been commercially launched in 138 countries by March 2015 (GSA 2015). According to Vanson Bourne’s survey of 2014, six in ten UK organisations hope to harness the potential of the 4G coverage, but only one in ten orgnisations have already started making changes in recognition of 4G coming into place. Taiwan joins the high speed mobile broadband club with its 4G/LTE commercially launch in May 2014. This paper examines the mobile broadband service market in Taiwan, illustrating the development of Taiwan’s broadband market and its connection with the progress of digital convergence. It aims to draw a general picture of existing broadband market and how potential competition can be developed in responding to both market and legal viewpoints. This paper is based on four parts. The first part provides a brief introduction of Taiwan’s broadband market. The second part analyses Taiwan’s mobile broadband environment and its competition aspects, which include the dramatic 4G license auction in 2013 and the reshuffle of Taiwan’s existing mobile broadband market. The third part provides an initial analysis on the business strategies and market deployment of existing 4G/LTE operators, demonstrating the 4G operator’s efforts towards competition in a digital convergence era. The final part of this paper discusses the legal environment and regulatory issues in Taiwan, which includes on-going regulatory reform and recent legislative evolvement. The controversial licensing policy for 4G/LTE broadband and the hardship case of Taiwan’s Wi-MAX operators are also discussed in this section. This paper concludes with views which reflect remaining concerns and deficits in law and regulation in creating a competitive broadband market environment. These, above all, include reassessing regulatory control and market definition in a digital convergence epoch; accelerating regulatory reform in order to promote cross-sectorial competition and innovative service deployment. Last but not least, we strongly suggest that predictable and sustainable spectrum policy, law and enforcement are the key towards a flourishing mobile broadband service market. In this, it is critical for the regulator to take innovative thinking and a brave leap to create a healthy and competitive legal environment, so that the existing and prospective market players, as well as the end users can all benefit from. |
| Keywords: | 4G/LTE, Mobile Broadband Service, Digital Convergence, Regulatory Reform, Telecom Law and Regulation, Wi-MAX. |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:2705157&r=all |
| By: | Dejan Trifunovic (University of Belgrade, Faculty of Economics); Djordje Mitrovic (University of Belgrade, Faculty of Economics); Bojan Ristic (University of Belgrade, Faculty of Economics) |
| Abstract: | Telecommunication industry has probably the highest level of direct network effects. Direct externalities are related to the number of consumers using the same service, and indirect externalities stem from the availability of supporting services. Apart from network externalities, in telecommunication call externalities also exist when user of one network benefits from receiving free calls from users of other networks. Serbian mobile phone telecommunication market was first a duopoly market with majority state- owned Telecom Serbia and privately owned Telenor. After that a third license was sold to VIP mobile. The two incumbents were well established in the market and have long time ago reached the critical mass of users. At the beginning, users of VIP mobile benefited mainly from call externalities and incumbents reacted by price discriminating between on-net and off-net calls aiming to deter entry of new rival in the market. The entrant succeeded in obtaining new users mainly by offering lower prices than incumbents. The subsequent decision of regulatory agency to permit changing operator without changing user’s number levelled the playing field, reduced user’s switching costs and the extent of user’s lock-in. The purpose of the paper is to analyse the current level of network and call externalities in Serbia using data from the Serbian mobile telephone market for the period 2003–2013 (number of subscribers, providers’ market shares and mobile call prices per minute). We show that the number of subscribers that changed their operator increased with the growing size of the new comer’s network installed base. Also, we have found that implicit price discrimination between on-net and off-net calls could be identified both in pre-paid and post-paid packages. In the former case, all operators offer cheap additional packages with large number of minutes for on-net calls. In the latter case, post-paid users can use additional large number of free minutes for on-net calls after they spent all the minutes available for calls to all networks from their existing subscription packages. |
| Keywords: | Network externalities, Call externalities, Price discrimination |
| JEL: | L14 L96 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:2704575&r=all |
| By: | Böhringer, Christoph (University of Oldenburg, Oldenburg / Germany); Rosendahl, Knut Einar (School of Economics and Business, Norwegian University of Life Sciences); Briseid Storrøsten, Halvor (Statistics Norway, Oslo / Norway) |
| Abstract: | Unilateral climate policy induces carbon leakage through the relocation of emission-intensive and trade-exposed industries to regions with no or more lenient emission regulation. Both analytical and numerical studies suggest that emission pricing combined with border carbon adjustment is a secondbest instrument, and more cost-effective than output-based rebating, in which case domestic output is indirectly subsidized. No country has so far imposed border carbon adjustment, while variants of output-based rebating have been implemented. In this paper we show that combining output-based rebating for emission-intensive and trade-exposed goods with a consumption tax on the same goods can be equivalent with border carbon adjustment. Moreover, we demonstrate that it is welfare improving for a region which has already implemented emission pricing along with output-based rebating to also introduce such a consumption tax. We conclude that supplementing output-based rebating with a consumption tax constitutes smart hedging against carbon leakage: Compared to output-based rebating stand-alone it constitutes a robust strategy for improving cost-effectiveness of unilateral climate policy; compared to border carbon adjustment it limits the risks of potentially detrimental trade disputes. |
| Keywords: | Carbon leakage; output-based rebating; border carbon adjustment; consumption tax |
| JEL: | D61 H23 Q54 |
| Date: | 2015–09–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nlsseb:2015_014&r=all |
| By: | Pozzi, Andrea; Schivardi, Fabiano |
| Abstract: | We survey the empirical literature analyzing the consequences of entry regulation in retail industries. We begin by providing some background on the most common forms of entry regulation and their rationales. We use OECD data to show evidence of a general trend towards less stringent entry regulation in the past 15 years. However, substantial heterogeneity persists across countries. Next, we review a number of empirical contributions that analyze the effects of entry regulation on market outcomes. We compare studies relying on quasi-experimental variation in regulation to those based on structural models and comment on strengths and challenges of each approach. We summarize the results obtained by the literature with respect to several important outcomes that entry regulation can be expected to affect, such as market structure, entry, productivity and employment. We conclude presenting a few relevant topics that the literature has yet to address and, therefore, represent promising avenues for future research. |
| Keywords: | entry regulation; retail trade |
| JEL: | L5 L81 R52 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10836&r=all |
| By: | Sumit Agarwal; Souphala Chomsisengphet; Neale Mahoney; Johannes Stroebel |
| Abstract: | We examine the ability of policymakers to stimulate household borrowing and spending during the Great Recession by reducing banks’ cost of funds. Using panel data on 8.5 million U.S. credit card accounts and 743 credit limit regression discontinuities, we estimate the marginal propensity to borrow (MPB) for households with different FICO credit scores. We find substantial heterogeneity, with a $1 increase in credit limits raising total unsecured borrowing after 12 months by 59 cents for consumers with the lowest FICO scores (≤ 660) while having no effect on consumers with the highest FICO scores (> 740). We use the same credit limit regression discontinuities to estimate banks’ marginal propensity to lend (MPL) out of a decrease in their cost of funds. For the lowest FICO score households, higher credit limits quickly reduce marginal profits, limiting the pass-through of credit expansions to those households. We estimate that a 1 percentage point reduction in the cost of funds raises optimal credit limits by $127 for consumers with FICO scores below 660 versus $2,203 for consumers with FICO scores above 740. We conclude that banks’ MPL is lowest exactly for those households with the highest MPB, limiting the effectiveness of policies that aim to stimulate the economy by reducing banks’ cost of funds. |
| JEL: | D82 E5 G01 G2 L1 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21567&r=all |
| By: | Iwata, Kazuyuki; Managi, Shunsuke |
| Abstract: | This study advocates a multi-dimensional urban planning strategy to help combat climate change under local—and not national—policies. However, the literature does not provide adequate guidance to local governments seeking to enhance urbanization and in turn reduce vehicular carbon dioxide (CO2) emissions. Therefore, this study sheds light on the effects of the following four urban planning instruments on vehicular CO2 emissions: urbanization promoting areas, urbanization control areas, urban planning taxes and property taxes. Using Japanese city-level data from 1990 to 2010, we find that the two urbanization area planning instruments and the urban planning taxes help lower emissions by increasing population density in low-density cities and that property taxes help reduce emissions in high-density cities. However, the increased population density associated with these instruments can lead to other negative outcomes, including increased traffic accidents, increased crime and a decrease in the facility condition index. City governments should consider complementary policies to mitigate such negative outcomes when employing planning instruments aiming to increase population density. |
| Keywords: | urbanization, population density, land use taxes, land use regulations, carbon dioxide emissions, multiple outcome |
| JEL: | Q58 R52 R58 |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:66435&r=all |
| By: | Strausz, Roland |
| Abstract: | Uncertainty in election outcomes generates politically induced regulatory risk. Political parties' risk attitudes towards such risk depend on a fluctuation effect that hurts both parties and an output--expansion effect that benefits at least one party. Notwithstanding the parties' risk attitudes, political parties have incentives to negotiate away all regulatory risk by pre-electoral bargaining. Efficient pre-electoral bargaining outcomes fully eliminate politically induced regulatory risk. Political parties can implement such outcomes by institutionalizing politically independent regulatory agencies and endowing them with a specific objective. |
| Keywords: | electoral uncertainty; independent regulatory agency; regulation; regulatory risk |
| JEL: | D82 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10838&r=all |
| By: | Strömbäck, Elon (Department of Economics, Umeå School of Business and Economics) |
| Abstract: | Throughout the world, green public procurement (GPP) has become an established environmental policy instrument. Advocates of this purchasing policy argue that the public sector can use its buyer power to incentivize industries into becoming less environmentally damaging. I study how GPP is organized in Sweden and the potential supplier’s response to varying buyer market shares. The level of GPP stringency is found to vary systematically with authority type, buyer market share, and political coalition in the relevant council or the Swedish Parliament. The results indicate quite substantial dispersion in GPP stringency and suggest a low degree of coordination when implementing the policy. After controlling for GPP stringency and other covariates, buyer market share is positively associated with the probability of potential suppliers submitting a bid. |
| Keywords: | Environmental policy; Regulation; Compliance cost; Endogenous entry; Buyer market share; Supplier incentives |
| JEL: | D78 H57 O38 Q58 |
| Date: | 2015–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0913&r=all |
| By: | Pierre M. Picard (CREA, Université de Luxembourg); Alessandro Tampieri (CREA, Université de Luxembourg); Xi Wan (CREA, Université de Luxembourg) |
| Abstract: | This paper analyzes optimal slot allocation in the presence of airport congestion. We model peak and offpeak slots as vertically differentiated products, and congestion limits the number of peak slots that the airport can allocate. Inefficiency emerges when the airport does not exploit all its slots. We show that for a private airport, inefficiency may arise if the airport is not too congested and the per-passenger fee is small enough, while with a public airport it does not emerge. Furthermore the airport, irrespective of its ownership, tends to give different slots to flights with same destination if the underlying market is a duopoly, and a single slot if the underlying market is served by a monopoly. |
| Keywords: | Slot allocation, Airport congestion, Vertical differentiation |
| JEL: | R41 H23 H21 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:luc:wpaper:15-10&r=all |
| By: | Strömbäck, Elon (Department of Economics, Umeå School of Business and Economics, Umeå University) |
| Abstract: | In Paper [I], we theoretically assess green public procurement (GPP) as an environmental policy instrument and its ability to lead to the achievement of environmental objectives. Central to our analysis is the extent to which polluting firms choose to adapt to the public sector’s environmental requirements and to invest in greener technologies. Our main finding is that the potential of GPP to function as an objective-effective instrument of environmental policy is limited and can actually be counterproductive. From an environmental policy point of view, it is crucial that GPP aims for environmental standards beyond just the technology of the polluting firms and that it is designed with reference to defined environmental objectives. <p> In Paper [II], we use data on Swedish public procurement auctions for internal regular cleaning service contracts to provide novel empirical evidence regarding GPP and its effect on the potential suppliers’ decision to submit a bid and their probability of being qualified for supplier selection. We find only a weak effect on supplier behavior, and this suggests that GPP, as used in practice, does not live up to its political expectations. However, several environmental criteria appear to be associated with increased complexity, as indicated by the reduced probability of a bid being qualified in the postqualification process. As such, GPP appears to have limited or no potential to function as an environmental policy instrument. <p> In Paper [III], I examine how GPP is organized in Sweden and how the potential suppliers respond to varying buyer market shares using data on Swedish public procurement auctions for internal regular cleaning service contracts. The level of GPP stringency is found to vary systematically across authority types, buyer market share, and political coalition in the relevant council or in Parliament. The results also indicate quite a substantial dispersion in GPP stringency, suggesting a low degree of coordination among contracting authorities when implementing the policy. After controlling for GPP stringency and other covariates, increased buyer market share is associated with a significant increase in the probability of potential suppliers submitting a bid. <p> The European Commission encourages public authorities to split procurement contracts into multiple contracts in order to increase the competiveness of small and medium sized enterprises (SMEs). <p> In Paper [IV], I use data from Swedish public procurement auctions for internal regular cleaning service contracts to study the effect of contract size and number of contracts on SME participation and probability of winning. The results indicate that SME participation is negatively related to both contract size and the number of contracts in the procurement. A possible interpretation is that reduced contract size in order to stimulate SME participation is counteracted by reduced incentives for them to enter into procurements with multiple contracts. Medium-sized firms are also more successful when bidding for smaller contracts relative to large firms. Nevertheless, the results indicate that the award rate for SMEs is positively correlated with the number of contracts in the procurement. |
| Keywords: | Public Procurement Auction; Environmental Policy; Regulation; Sustainability; Competition; Compliance Cost; Endogenous Entry; Supplier Incentives; Buyer Market Share; Split Award; Small and Medium Sized Enterprises |
| JEL: | D44 H57 O38 Q58 |
| Date: | 2015–08–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0915&r=all |