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on Regulation |
| By: | Lange, Mirjam R. J.; Saric, Amela |
| Abstract: | Developments in the EU telecommunications markets require a recurrent redesign of the regulatory framework for telecommunications services. In this regard, the analysis of the substitution effects between different types of telephony is the cornerstone of market definition and therefore of effective regulation. This paper explores the access substitution between fixed-lines, mobiles, and managed VoIP in a unified EU cross-country framework. We employ a half-yearly dataset for 20 EU countries for the 2008-2011 period and apply dynamic panel data methods. Our analysis demonstrates strong access substitution between fixed-lines and mobiles and provides indicative evidence on the substitution between fixed-lines and VoIP. Overall, we find evidence in favor of access substitution and therefore of joint market definition. Regulatory obligations imposed on the market for access to fixed telephone networks might therefore be redundant. |
| Keywords: | Fixed-mobile-VoIP substitution,Telecommunications markets,(De)regulation,Market definition,Dynamic panel data analysis |
| JEL: | C23 L43 L51 L96 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:221&r=reg |
| By: | Matthew Doyle (Division of Economics and Business, Colorado School of Mines); Ian Lange (Division of Economics and Business, Colorado School of Mines) |
| Abstract: | Natural gas power plants can further specify their procurement contracts with pipeline distributors using a firm contract option that guarantees delivery at an additional cost. Using transaction level data from 2008-2012 we empirically test what characteristics lead to use of firm contracts and how the premium for firm contracts changes with these characteristics. Using variation in power plants technology type (combined vs. simple cycle) and electricity market structure (restructured vs. regulated), we generally find support for transaction cost theory in the data. Smaller plants, plants located in states with more variance in electricity demand, and plants in states with more inflow pipeline capacity are statistically less likely to use a firm contract. Firm contracts are on average 2.5% (14 cents per Mcf) more expensive and this premium increases as the weather is colder and the state a plant is located in has less inflow capacity. |
| Keywords: | Natural Gas, Procurement Contracts, Pipelines, Electricity |
| JEL: | Q40 L94 L95 L14 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:mns:wpaper:wp201605&r=reg |
| By: | Henze, B. (Tilburg University, School of Economics and Management) |
| Abstract: | The main objective of this thesis is to use economic laboratory experiments in order to evaluate the performance of regulatory schemes and market designs in addressing challenges encountered in the regulation of European network industries. Chapter 2 assesses whether regulatory holidays and Long Term Financial Transportation Rights (LTFTR) can provide a network operator with incentives for optimal network expansion. However, in the studied environment which captures essential features of gas transportation networks, neither of the two schemes generates improvements over a baseline of price cap regulation. Chapter 3 investigates whether auctions can be used to successfully implement two-part tariff Incremental Surplus Subsidy (ISS) schemes under aggregate demand uncertainty. Depending on the method used for determining the network users’ individual contributions to the subsidy, multi-unit Vickrey auctions yield promising results. Chapter 4 finally studies the effects of providing varying degrees of transparency in a duopolistic market for experience goods. Under full transparency, the two sellers are found not to maximally differentiate the quality of their products as theory would predict but to rather engage in fierce price competition at high quality levels. Moreover, even intermediate levels of transparency result in significantly higher consumer surplus and total welfare when compared to a situation without any transparency |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiutis:b18fcfca-2b95-4b01-91e2-049839e9817b&r=reg |
| By: | Dewi Yuliani |
| Abstract: | To accelerate the deployment of renewable energy technologies and to secure the electricity supply, the Government of Indonesia has issued several feed-in-tariff regulations for various renewable energy sources, which were previously predominated by pilot projects using government funding. The feed-in tariff is a policy instrument that has been successfully applied in many other countries to support renewable electricity, and it is known for its simplicity in implementation. This study undertakes exploratory research to evaluate how the policy works in Indonesia, not only as stated in official reports, but also in the field. The study's results show that while the policy triggers investment interest in renewable power plants, there are many obstacles encountered at the deployment stage due to imperfections in the feed-in-tariff policy package and some non-cost factors. In addition, several unanticipated side effects were identified at the local level as a consequence of the upturn in investment interest. The study indicates that the transition to cleaner energy is much more challenging for developing countries such as Indonesia. |
| Keywords: | feed-in-tariff policy, renewable energy, deployment |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2016-059&r=reg |
| By: | Lucy Baker |
| Abstract: | This paper situates South Africa.s new renewable energy sector within the context of the country.s electricity system and in turn its unique political economy. I chart major developments in the country.s energy policy and governance since the end of apartheid and show how electricity policy is determined by economic, political, and technological factors. I examine the contested negotiation of key policies, which have been fundamental to the introduction of a renewable energy sector. I consider how the new renewable energy sector has evolved thus far and raise key challenges and concerns for its future development. |
| Keywords: | South Africa, electricity, renewable energy, political economy, policy |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2016-015&r=reg |
| By: | Roger Fouquet |
| Abstract: | This paper investigates the Nordhaus (1973) model developed to understand how markets allocate energy resources. In particular, the model proposes that royalties earned by non-renewable energy producers are closely related to the cost of the backstop energy source, the interest rate and the switching date to the backstop energy source. Here, the paper presents the prices of the main and backstop energy sources, extraction costs and royalties, as well as transport costs, taxes and interest rates, over more than five hundred years in Britain to test the model’s ability to explain very long run market behavior. While the model needs a more rigorous analysis, the very long run data and this crude test suggests that certain episodes might be explained by the model and that others do not appear to be. Also, each of the three explanatory variables do appear to be relevant in these explained episodes. In general, though, energy markets appear to be myopic, unaware of the limits of the non-renewable resource being traded, and only in moments of crisis do they consider the finiteness of the resource and, then, perhaps too dramatically, triggering major new technological, infrastructure and R&D investments. |
| JEL: | N0 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:62367&r=reg |
| By: | Casey B. Mulligan; Kevin K. Tsui |
| Abstract: | A version of the Becker-Lancaster characteristics model featuring quality-quantity tradeoffs reveals a number of surprising market behaviors that can result from price regulations that are imposed on competitive markets for products that have adjustable non-price attributes. Quality need not clear a competitive market in the same way that prices do, because quality can reduce the willingness to pay for quantity. Producers can benefit from price ceilings, at the expense of consumers. Price ceilings can result in quality-degradation “death spirals” that would not occur under quality regulation or excise taxation. The features of tastes and technology that lead to such outcomes are summarized with pairwise comparisons of (not necessarily constant) elasticities. |
| JEL: | K2 L15 L51 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22305&r=reg |
| By: | Jesse D. Jenkins; Valerie J. Karplus |
| Abstract: | The economic prescription for climate change is clear: price carbon dioxide (CO2) and other greenhouse gas emissions to internalize climate damages. In practice, a variety of political economy constraints prevent the introduction of a carbon price equal to the full social cost of emissions. This paper develops insights about the design of climate policy in the face of binding political constraints, formulated here as limits on the CO2 price itself, on increases in energy prices, and on energy consumer and producer surplus loss. We employ a stylized model of the energy sector to develop intuition about the welfare-maximizing combination of CO2 price, subsidy for clean energy production, and lump-sum transfers to energy consumers or producers under each constraint. We find that the strategic use of subsidies or transfers can compensate for or relieve political constraints and significantly improve the efficiency and environmental efficacy of carbon pricing policies.. |
| Keywords: | political economy, carbon pricing, environmental economics, public economics, climate change, instrument choice, carbon tax, emissions trading |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2016-044&r=reg |
| By: | OECD |
| Abstract: | The digital convergence anticipated during the 2008 Seoul Ministerial has become a reality. Historically, communication services were delivered via single-purpose dedicated networks (e.g. telephone, television). Many OECD countries now function with converged networks, facilitated by the Internet Protocol (IP) in which “bits” are the building blocks for transmission of all content and service – all “applications.” This process of convergence is steadily deepening as technology evolves and more and more activity shifts online. In particular, technological, service and business innovations both at the core and at the edge of the network are significantly affecting competitors, investors and consumers. This report identifies trends in convergence, the opportunities and challenges arising from these changes and suggests policies to meet them. |
| Date: | 2016–06–07 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaab:251-en&r=reg |
| By: | Larouche, Pierre (Tilburg University, TILEC); Schütt, Florian (Tilburg University, TILEC) |
| Abstract: | As part of the standard-setting process, certain patents become essential. This may allow the owners of these standard-essential patents to hold up implementers of the standard, who can no longer turn to substitute technologies. However, many real-world standards evolve over time, with several generations of standards succeeding each other. Thus, standard setting is a repeated game in which participants can condition future behavior on whether or not hold-up has occurred in the past. In the presence of complementarity between the different patents included in the standard, technology contributors have an incentive to discipline each other and keep royalties low, which can be achieved by threatening to exclude contributors who have engaged in hold-up from future rounds of the process. We show that repeated standard setting can sustain FRAND royalties provided the probability that another round of standard setting will occur is sufficiently high. We also examine how the decision-making rules of standard-setting organizations affect the sustainability of FRAND royalties. |
| Keywords: | standard setting; repeated interaction; FRAND royalties |
| JEL: | L94 L43 L11 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiutil:4a722c80-9eb3-47d8-bea7-b1057f1336dd&r=reg |
| By: | G. Cornelis van Kooten |
| Abstract: | Mitigating climate change will require reduced use of fossil fuels to generate electricity. To do so and eschewing nuclear power, countries have turned to wind energy. In this paper, the economics of wind energy are investigated by first examining the social costs and benefits of replacing fossil fuels, with the deciding factor favoring wind based on externalities. The externality costs of fossil fuels relate to adverse health effects of pollutants and the contribution of carbon dioxide emissions to global warming, while the adverse spillovers from wind energy relate to the nature of wind turbines. In general, economic studies find that, when allowance is made for the negative externalities associated with fossil fuel burning, the benefits of wind energy exceed their costs, thereby justifying public intervention. Wind energy is only viable because of generous subsidies, which are shown to be generally effective in bringing about the investments governments desire. Economic studies that only examine costs and benefits on a macro scale, however, neglect or underestimate the indirect costs of wind energy, which are associated with the impact that intermittent supply has on the operation and management of an electricity grid. To gain a handle on these costs, electricity systems are discussed from generation through transmission and distribution to retail demand. One aspect of this discussion relates to the adequacy of investment in marginal (peak time) generating capacity. In the analysis, it is assumed that the wholesale market for electricity is competitive and that demand responds to changes in spot prices; the implications of these assumptions are also discussed. While most studies are generally optimistic about the potential for integrating wind energy, researchers have identified problems with the inability to store energy (except behind hydroelectric dams), the need for fast-responding backup generating capacity, network instability, low capacity factors for wind power, et cetera, that could limit the usefulness of wind at the high penetration rates now envisioned. Overall, it may turn out that there are economic and physical limits to the proportion of electricity that can be generated by wind and other intermittent energy sources. |
| Keywords: | Electricity; regulated industries; peak load pricing; intermittent energy; storing wind energy; climate change; wholesale spot market for electricity; demand management; fossil fuels and externalities |
| JEL: | H41 L51 L94 Q42 Q48 Q54 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:rep:wpaper:2015-07&r=reg |
| By: | OECD |
| Abstract: | This study assesses the impact of international sulphur emission reduction regulations on global shipping. Ships emit a large amount of sulphur oxides that have significant health impacts. To mitigate these, international regulations cap the sulphur content of ship fuel. In certain parts of the world, emission control areas (ECAs) with even stricter standards have been established. In the emission control areas, new requirements introduced in 2015 limit the sulphur content of ship fuel to 0.10%. A new, lower global sulphur cap of 0.50% is planned for 2020. This report examines the 2015 cap effects on shipping and the potential effects of the new requirements foreseen for 2020. It assesses the cost increase for maritime transport associated with the sulphur caps, impacts on shipping operations as well as on other transport modes, and on the environment. The report also highlights policy gaps and challenges for the enforcement of sulphur emissions regulation for shipping. |
| Date: | 2016–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:oec:itfaac:18-en&r=reg |
| By: | Joshua Hall (West Virginia University, Department of Economics); Elham Erfanian (West Virginia University, Agricultural and Natural Resource Economics); Caleb Stair (West Virginia University, Agricultural and Natural Resource Economics) |
| Abstract: | Environmental regulation is a polarizing issue. In 2014, a bill came to a vote in the U.S. House of Representatives that would limit the powers of the Environmental Protection Agency. This empirical note identifies the characteristics that influenced the voting behavior of House Representatives on this bill. Political party, educational background, the location quotient of the mining industry in the representative’s state, and the amount of emissions in the Representative’s state are considered. A member’s political party is the primary factor influencing voting behavior but the location quotient of the mining industry also plays an important role. |
| Keywords: | EPA regulations; carbon emissions; fossil fuel-fired; electric utility generating |
| JEL: | H7 Q4 Q58 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:wvu:wpaper:16-11&r=reg |
| By: | Sendstad, Lars Hegnes (Dept. of Business and Management Science, Norwegian School of Economics); Chronopoulos, Michail (School of Computing, Engineering and Mathematics, University of Brighton) |
| Abstract: | Investment in emerging technologies is particularly challenging, since, apart from uncertainty in revenue streams, firms must also take into account both policy uncertainty and the random arrival of innovations. We assume that the former is reflected in the sudden provision and retraction of a support scheme, which takes the form of a fixed premium on top of the output price. Thus, we develop an analytical framework for sequential investment in order to determine how price, technological, and policy uncertainty interact to affect the decision to invest sequentially in successively improved versions of an emerging technology. We show that greater likelihood of subsidy retraction lowers the incentive to invest, whereas greater likelihood of subsidy provision facilitates investment. However, embedded options to invest in improved technology versions raise the value of the investment opportunity, thereby mitigating the impact of subsidy retraction and making the impact of subsidy provision more pronounced. Additionally, by allowing for sequential policy interventions, we find that the impact of policy uncertainty becomes less pronounced as the number of policy interventions increases. |
| Keywords: | Investment analysis; real options; policy uncertainty; technological uncertainty |
| JEL: | G00 G11 |
| Date: | 2016–06–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhhfms:2016_010&r=reg |
| By: | JANSSENS, Jochen; DE CORTE, Annelies; SÖRENSEN, Kenneth |
| Abstract: | In this paper, two approaches for distribution network design optimisation that take into account reliability at critical nodes in the network, are presented. An exact solution method is compared with an adaptive large neighbourhood search solution technique. Both procedures are tested on a set of realistic test instances, and compared on computational time and objective value. |
| Keywords: | Network design, Network security, Metaheuristics, Adaptive large neighbourhood search (ALNS) |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:ant:wpaper:2016007&r=reg |
| By: | Rosegrant, Mark W. |
| Keywords: | Agricultural and Food Policy, Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare16:235590&r=reg |
| By: | Alemanno , Alberto |
| Abstract: | Emboldened by the Spitzenkandidaten process, the new European Commission emerges as the most political yet. The Commission asks EU citizens to judge its operation by its ability ‘to deliver solutions to the big issues that cannot be addressed by the Member States alone’. The Better Regulation Package translates this political commitment into an actionable approach assuring EU citizens that the Commission will remain ‘big on big things, small on small things’. To deliver on this promise, the Commission extends the Impact Assessment system, renews its consultation procedures and adds a few institutional mechanisms so as to enhance its ‘ability to deliver’ throughout the policy cycle. But in order to do so the Commission needs to bind – and somehow control – the European Parliament and the Council, on the one hand, and the Member States, on the other, in relation to their commitment to openness, participation and evidence-based policymaking. While legitimate, this attempt raises serious doubts about the compatibility of this reform with the principle of separation of powers and, in particular, that of institutional balance. |
| Keywords: | Regulatory reform; Better Regulation; Regulatory Scrutiny Board; Impact Assessment; REFIT; CBA; comparative institutional analysis; trilogues; trialogues; TTIP |
| JEL: | K30 K32 |
| Date: | 2015–10–11 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:heccah:1119&r=reg |