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on Regulation |
| By: | Landis, Florian; Heindl, Peter |
| Abstract: | We study how European climate and energy policy targets affect different member states and households of different income quintiles within the member states. We find that renewable energy targets in power generation, by reducing EU ETS permit prices, may make net permit exporters worse off and net permit importers better off. This effect appears to dominate the effciency cost of increasing the share of energy provided by renewable energy sources in the countries that adopt such targets. While an increase in prices for energy commodities, which is entailed by the policies in question, affects households in low income quintiles the most, recycling revenues from climate policy allows governments to compensate them for the losses. If renewable targets reduce the revenues from ets permit auctions, member states with large allocations of auctionable permits will lose some of the ability to do so. |
| Keywords: | distributional effects,EU climate policy,renewable energy target |
| JEL: | H23 Q52 Q54 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:16026&r=reg |
| By: | Gert Brunekreeft; Marius Buchmann; Toru Hattori; Roland Meyer |
| Abstract: | The German energy transition massively alters the market structure of electricity supply and forces incumbent electric utilities to rethink their business strategies. We analyze three main developments that undermine the former market dominance of the “Big 4” incumbents in Germany. First, nuclear phase-out reduces their market shares and creates financial risk of nuclear waste decommissioning. Second, the large-scale integration of renewables fosters market entry from third parties and intensifies competition. Third, a possible coal-phase out in combination may have positive effects on market revenues but tends to increase regulatory risk. In total, incumbents face “disruptive Challenges” and need to find new value-creating products and services beyond sole energy supply. Promising focus areas are renewable energies, the distribution business, and smart, customer-oriented solutions. |
| Keywords: | Electric Utilities, Market Structure, Firm Strategy |
| JEL: | L94 L11 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:bei:00bewp:0023&r=reg |
| By: | Deane, Paul; FitzGerald, John; Malaguzzi Valeri, Laura; Tuohy, Aidan; Walsh, Darragh |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:rb2014/2/6&r=reg |
| By: | Emanuele Campiglio |
| Abstract: | It is widely acknowledged that introducing a price on carbon represents a crucial precondition for filling the current gap in low-carbon investment. However, as this paper argues, carbon pricing in itself may not be sufficient. This is due to the existence of market failures in the process of creation and allocation of credit that may lead commercial banks – the most important source of external finance for firms – not to respond as expected to price signals. Under certain economic conditions, banks would shy away from lending to low-carbon activities even in presence of a carbon price. This possibility calls for the implementation of additional policies not based on prices. In particular, the paper discusses the potential role of monetary policies and macroprudential financial regulation: modifying the incentives and constraints that banks face when deciding their lending strategy - through, for instance, a differentiation of reserve requirements according to the destination of lending - may fruitfully expand credit creation directed towards low-carbon sectors. This seems to be especially feasible in emerging economies, where the central banking framework usually allows for a stronger public control on credit allocation and a wider range of monetary policy instruments than the sole interest rate. |
| Keywords: | green investment; low-carbon finance; banking; credit creation; green macroprudential regulation; monetary policy |
| JEL: | E50 G20 Q56 |
| Date: | 2015–03–27 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:65146&r=reg |
| By: | Lynch, Muireann Á.; Curtis, John |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:rb2015/3/3&r=reg |
| By: | Iwata, Hiroki |
| Abstract: | This study investigates the effect of an environmental regulation on the innovation choice of firms in an oligopoly. Most existing studies on environmental regulations and innovations examine the optimal behavior of firms when one innovation project is feasible. In our model, firms are allowed to choose from multiple types of innovation projects. Our main contributions are that we derive the conditions under which environmentally friendly and cost reducing innovations are selected in Bertrand competition and we show how environmental regulation affects innovation choice. |
| Keywords: | environmental regulation; innovation; the Porter hypothesis |
| JEL: | D21 Q55 Q58 |
| Date: | 2016–03–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:70280&r=reg |
| By: | Kristoffersson, Ida (KTH); Engelson, Leonid (KTH) |
| Abstract: | Efficiency of congestion charging schemes has been extensively studied in road pricing literature. However, few studies analyze both efficiency and equity of congestion charging schemes. This paper shows the importance of conducting an equity analysis as a complement to an efficiency analysis. Comparing different charging scenarios for Stockholm, the paper shows that changing the location of the charging stations may alter the system from progressive to regressive. In the paper, the most efficient scenario is the least equitable. Indeed, the results of this paper show that moving towards a more efficient scheme design, where amounts are more closely related to congestion level, the charging system turns from progressive to regressive. The reason is the uneven distribution of workplaces and residential areas in Stockholm. Combined with richer socio-economic groups to a larger extent living in the part of Stockholm with more workplaces, this leads to a trade-off between charging for congestion and designing an equitable system. The paper concludes that congestion charging cannot be said to be progressive or regressive per se, rather it varies between cities and even between different scheme designs for the same city. Furthermore, results of the mesoscopic simulations performed in the paper demonstrate that travelers as a whole may benefit from congestion charging even before the use of revenues to compensate the users. |
| Keywords: | Congestion charging; Efficiency; Equity; Welfare effects; Regressive; Progressive; Mesoscopic simulation |
| JEL: | R41 R48 |
| Date: | 2016–03–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ctswps:2016_007&r=reg |
| By: | Hyland, Marie |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:rb2016/1/2&r=reg |
| By: | Bjørndal, Endre (Dept. of Business and Management Science, Norwegian School of Economics); Bjørndal, Mette (Dept. of Business and Management Science, Norwegian School of Economics); Cullmann, Astrid (DIW Berlin); Nieswand, Maria (DIW Berlin) |
| Abstract: | Revenue cap regulation is often combined with systematic benchmarking to reveal the managerial inefficiencies when regulating natural monopolies. One example is the European energy sector, where benchmarking methods are based on actual cost data, which are influenced by managerial inefficiency as well as operational heterogeneity. This paper demonstrates how a conditional nonparametric method, which allows the comparison of firms operating under heterogeneous technologies, can be used to estimate managerial inefficiency. A dataset of 123 distribution firms in Norway is used to show aggregate and firm-specific effects of conditioning. By comparing the unconditional model to our proposed conditional model and the model presently used by the Norwegian regulator, we see that the use of conditional benchmarking methods in revenue cap regulation may effectively distinguish between managerial inefficiency and operational heterogeneity. This distinction leads first to a decrease in aggregate efficient costs and second to a reallocation effect that affects the relative profitability of firms and relative customer prices, thus providing a fairer basis for setting revenue caps. |
| Keywords: | Data Envelopment Analysis; Yardstick Regulation; Electricity Distribution |
| JEL: | C44 L51 L94 |
| Date: | 2016–02–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhhfms:2016_004&r=reg |
| By: | Jan Stede |
| Abstract: | The Italian white certificate scheme is the main national policy instrument to incentivise energy efficiency of the industrial sector. The mechanism sets binding energy-saving targets on electricity and gas distributors with at least 50,000 clients and includes a voluntary opt-in model for participation from other parties. This paper investigates and assesses the elements of the scheme that help overcome several barriers to deliver industrial energy efficiency. Results from a survey conducted among leading experts indicate that the Italian system provides a strong financial incentive to energy efficiency investments, covering a significant share of investment costs and thus reducing payback time. Moreover, the scheme fosters the development of energy service companies (ESCOs), which are key to developing, installing and arranging finance for projects on the ground. In conjunction with other policies, the mechanism also raises awareness of energy efficiency investment opportunities, thus helping overcome the market failure of insufficient information. Core challenges remain, including tackling regulatory uncertainty and improving access to finance. |
| Keywords: | White certificates, energy efficiency obligations, financial incentives, policy evaluation, ESCOs, industrial energy savings, market barriers |
| JEL: | D22 D82 L14 L97 Q48 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1565&r=reg |
| By: | Curtis, John; Lynch, Muireann Á.; Zubiate, Laura |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:rb2015/4/1&r=reg |