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on Regulation |
| By: | Antoine Goujard |
| Abstract: | Poland has significantly upgraded its infrastructure network over the past decade. However, bottlenecks still weigh on productivity growth and environmental and health outcomes. The EU 2014-20 programming period is an opportunity to improve the management of infrastructure investment. In the transport sector, the country allocated most recent funding to roads, but it plans significant investment in railway and urban public transport in 2014-20. Strengthening metropolitan governance, building up medium-term infrastructure management capabilities and reducing funding uncertainty would ensure more efficient spending. In the energy sector, electricity generation capacity is tight, while regulatory uncertainty, administrative burdens and a lack of interregional and international trade capacity has hampered the development of renewables. The authorities are seeking to develop nuclear power, but they need to take fully into account tail risks involved and its long-term costs. More energy efficiency investment would also be valuable, as current support systems do not provide sufficient incentives. Améliorer l'investissement en infrastructures de transports et énergétiques en Pologne La Pologne a significativement renforcé son réseau d’infrastructures au cours de la dernière décennie. Cependant, des goulets pèsent toujours tant sur la croissance de la productivité que sur la santé de la population et l’environnement. La période de programmation 2014-20 de l’UE est une opportunité d’améliorer la gestion de l’investissement en infrastructures. Dans le secteur des transports, après avoir financé principalement les infrastructures routières, la Pologne prévoit de consacrer d’importants investissements aux transports ferroviaires et publics urbains entre 2014 et 2020. Une meilleure gouvernance des métropoles, des capacités accrues de gestion des infrastructures à moyen terme et une réduction de l’incertitude des financements garantiraient une plus grande efficience des dépenses. Par ailleurs, dans le secteur de l’énergie, les installations de production électrique satisfont tout juste les besoins, tandis que l’incertitude réglementaire, le poids des charges administratives et les capacités commerciales insuffisantes aux niveaux interrégional et international freinent le développement des énergies renouvelables. Les autorités cherchent à développer le nucléaire, mais elles doivent tenir pleinement compte des risques extrêmes et de ses coûts à long terme. La Pologne aurait également intérêt à investir davantage dans l’efficacité énergétique car les dispositifs de soutien actuels ne fournissent pas des incitations suffisantes. |
| Keywords: | investment, transport, regulation, energy, infrastructure |
| JEL: | E62 H54 H57 L91 L94 L95 L96 O43 |
| Date: | 2016–06–02 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1302-en&r=reg |
| By: | Misato Sato; Marta Ciszawska; Timothy Laing |
| Abstract: | International carbon offsetting can help reduce compliance costs in emissions trading schemes and at the same time support carbon mitigation projects in developing countries. A surprising observation from the European Union Emissions Trading System’s experience with offsetting is that companies do not fully utilise offsetting for compliance despite the cost advantage in doing so. However, so far there has been limited research evaluating what factors influence companies’ decisions to utilise offsets. This paper fills this gap by investigating the demand for carbon offsets in tradable permit emissions markets. To do so, we use detailed firm-level data on 279 companies regulated under the EU ETS during 2008-2012. Our findings suggest that there are clear sectoral differences and that, contrary to expectations, transaction costs and over-allocation of free allowances are not the key determining factors. We find some evidence to support the existence of ‘insetting’, that is, companies with subsidiaries in key offset countries are more likely to use a larger share of their offset allowance for compliance. Semi-structured interviews with companies supported these findings. |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp237&r=reg |
| By: | Willems, Bert (Tilburg University, Center For Economic Research); Zwart, Gijsbert (Tilburg University, Center For Economic Research) |
| Abstract: | We model the optimal regulation of continuous, irreversible, capacity expansion, in a model in which the regulated network firm has private information about its capacity costs, investments need to be financed out of the firm’s cash flows from selling network access and demand is stochastic. If asymmetric information is large, the optimal mechanism consists of a regulatory holiday for low-cost firms, and a mark-up regime for higher-cost rms. With the regulatory holiday, a firm receives the full revenue of capacity sales, and expands capacity as if it were an unregulated monopolist. Under the mark-up regime, a firm receives only a fraction of the capacity revenues, and is obliged to expand capacity whenever the price for capacity reaches a threshold. The regulatory holiday is necessary to fund information rents to the most efficient firms, which invest relatively early, as direct investment subsidies are not feasible. |
| Keywords: | regulatory holiday; real option value; asymmetric information; optimal contracts |
| JEL: | D81 D82 L52 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiucen:b9cd661e-1707-47a2-b63a-34bab3439b8a&r=reg |
| By: | Gabriel E. Lade; C.Y. Cynthia Lin Lawell; Aaron Smith |
| Abstract: | The Renewable Fuel Standard (RFS2) mandates large increases in U.S. biofuel consumption and is implemented using a market for tradable compliance credits, known as RINs. In early 2013, RIN prices soared, causing the regulator to propose reducing future mandates. We develop a dynamic model of RFS2 compliance to demonstrate how changes in expectations about future policy affect current compliance costs, and we use a market effciency test to demonstrate that RIN markets have behaved in accordance with our model. We then estimate empirically the effect of three "policy shocks" that reduced the expected mandates in 2013. The largest of these shocks decreased the total cost of compliance by nearly $8 billion. The burden of the mandate reductions fell primarily on advanced biofuel firms and on commodity markets of the marginal compliance biofuel. We argue that the policy shocks reduced the incentive to invest in the technologies required to meet the future objectives of the RFS2. JEL Codes: Q42, Q50, H23 |
| Keywords: | tradable credits, policy design, quantity mechanisms, renewable fuel standard |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:16-wp565&r=reg |
| By: | Daniel Rais |
| Abstract: | Abstract This paper criticizes measures that allow Member States of the European Union (EU) to provide priority treatment for electricity produced from renewable energy sources (RES) in terms of connection and access to the grid, and dispatch of electricity on the grid. It argues against the priority rules set out in the Renewable Energy Directive of 2009 and comes out in favour of grid operation neutrality. To arrive at this conclusion, this paper provides an overview of the nature of priority rules, reviews the distinct problems related to the application of priority rules, objectives of the implementation of Third Energy Package and available legal remedies for the protection of legitimate interests of electricity generators. |
| Date: | 2015–02–16 |
| URL: | http://d.repec.org/n?u=RePEc:wti:papers:774&r=reg |
| By: | Bertin Martens (European Commission – JRC - IPTS) |
| Abstract: | This report provides an overview of the relevant economic research literature on platforms or multi-sided online markets. It discusses platforms from a regulatory policy angle, including potential market failures in platforms, the extent of self-regulation and possible regulatory responses through existing competition policy, consumer protection and data protection instruments. It covers selected policy issues associated with these platforms including possible sources of bias in search engines and search rankings, data protection and the use of personal data in platforms, and platform liabilities within and beyond the e-commerce directive. |
| Keywords: | multi-sided markets, digital online platforms, market failure, regulation, e-commerce directive, search engines, data protection, intermediary liabilities |
| JEL: | F15 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:decwpa:2016-05&r=reg |
| By: | Robert A. Ritz |
| Abstract: | This paper presents a game-theoretic analysis of multimarket competition with strategic capacity investments, motivated by recent developments in international natural gas markets. It studies the competitive implications of heterogeneity in firm structure arising from asset specificity. A single-market focus confers advantage even in the absence of superior value or cost. Lower costs and a sharper organizational focus are self-enforcing in generating competitive advantage. This establishes a novel connection between two of Porter’s “generic strategies”. The model speaks to competition between pipeline gas and liquefied natural gas (LNG) and the global impacts of the Fukushima nuclear accident. |
| Keywords: | Competitive advantage, strategic commitment, generic strategies, cost pass-through, value capture |
| Date: | 2016–01–12 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1603&r=reg |
| By: | Lynes, Melissa; Brewer, Brady; Featherstone, Allen |
| Abstract: | Nonparametric DEA models were ran to estimate cost and production frontiers of 503 electric generation plans in 2012. Preliminary results show that the relaxation of the greenhouse gas emission constraint for the constrained electric generation plants would reduce the cost for all greenhouse gas emissions in the study. However, it was found that when the model accounts for these greenhouse gas emissions as a bad output, the electric generation plants that were constrained were more efficient by most of the efficiency measures. This shows that the inclusion of a pollutant, in this case the greenhouse gas emissions of an electric generation plant, are accounted for in the production process, the efficiency scores and the frontier curves of the plant are affected and must be accounted for. |
| Keywords: | production, electricity, greenhouse gas emissions, Environmental Economics and Policy, Production Economics, Q41, D24, |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea16:235890&r=reg |
| By: | Claudio Agostini (Escuela de Gobierno, Universidad Adolfo Ibáñez); Shahriyar Nasirov; Carlos Silva |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:uai:wpaper:wp_045&r=reg |
| By: | Landwehr, Stefanie C.; Hartmann, Monika |
| Abstract: | Television advertisement targeting children and promoting food products high in sugar, saturated fat or sodium is considered to enhance the development of childhood overweight and obesity. Thus, reducing children’s exposure to advertisement of energy-dense, nutrient-poor (EDNP) products is considered as one option to improve children’s health. In 2007, globally leading food and beverage companies launched the EU Pledge, a self-regulation initiative in which signatory corporations agreed to restrict television and internet advertising of EDNP products not in line with specific nutritional criteria to media audiences of at least 35 % children under the age of 12 at European level. While initially each participating corporation defined their own nutritional criteria, in 2012 companies agreed on a common nutrient profiling system which has to be adopted by the end of 2014. The overall objective of this study is to examine the effectiveness of the EU Pledge in reducing children’s exposure television advertising of EDNP food and drink products. In October 2011, 2012 and 2014, television program of ten German television networks was recorded each on one weekend day and one week day. In total, 892 hours of television program were taped. Data was analyzed using content analysis. The sample contains 127.6 hours of advertising with a total of 1,069 food commercials addressing children. More than half of all food advertisements designed in a child-appealing way originates from Pledge-signatory companies (57.4 %). The share of products from Pledge-participating companies matching the common criteria of the EU Pledge increased from 37.5 % in 2011 to 75.0 % in 2014. At the same time, the share of non-participating companies declined (2011: 80.0 %; 2014: 25.0 %). However, compared to the criteria of the Ofcom score (compliance Pledge-members 2011: 12.5 %; 2014: 25.0) criteria of the EU Pledge are considerable less strict. The results indicate that despite the adoption of harmonized criteria, the overall nutritional value of food products advertised to children on television has not improved as EDNP products continue dominating food commercials to children. |
| Keywords: | self-regulation in industry, food marketing to children, television advertising, Agricultural and Food Policy, Health Economics and Policy, Marketing, |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea16:235881&r=reg |
| By: | Davis, Rebecca J.; Sims, Charles |
| Keywords: | risk and uncertainty, real options, energy economics, Resource /Energy Economics and Policy, Risk and Uncertainty, Q41, |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea16:235642&r=reg |