nep-reg New Economics Papers
on Regulation
Issue of 2016‒11‒20
eight papers chosen by
Natalia Fabra
Universidad Carlos III de Madrid

  1. What Drives People’s Opinions of Electricity Infrastructure? Empirical Evidence from Ireland By Valentin Bertsch; Hyland, Marie; Mahony, Michael
  2. A Turbine is not only a Turbine: The Role of Social Context and Fairness Characteristics for the Local Acceptance of Wind Power By Ulf Liebe; Anna Bartczak; Jürgen Meyerhoff
  3. Editorial: Thinking beyond the cost-benefit analysis: the wider impact of high-speed rail on local development By Marie Delaplace; Frédéric Dobruszkes
  4. Preferences for Energy Efficiency vs. Renewables: How Much Does a Ton of CO2 Emissions Cost? By Anna Alberini; Andrea Bigano; Milan Šcasný; Iva Zverinová
  5. Optimal taxation with intermittent generation By Fadoua CHIBA
  6. Does social interaction make bad policies even worse? Evidence from renewable energy subsidies By Inhoffen, Justus; Siemroth, Christoph; Zahn, Philipp
  7. Platforms and network effects By Belleflamme, Paul; Peitz, Martin
  8. Effects of Privatization on Price and Labor Efficiency: The Swedish Electricity Distribution Sector By Lundin, Erik

  1. By: Valentin Bertsch; Hyland, Marie; Mahony, Michael
    Abstract: Across the EU, significant infrastructure investment is needed in both generation from renewable energy sources (RES) and the electricity transmission system to meet the European targets on emission reduction and RES expansion. Experiences show, however, that citizens may object to new energy infrastructure in their localities which may cause delays in achieving the targets. To avoid such delays, it is crucial to understand what drives people’s opinions. To explore people’s opinions of different electricity generation and transmission technologies in Ireland, we conducted a nationally-representative survey. Concerning the drivers, we explicitly distinguish between socio-demographics, socio-psychological/political beliefs, and contextual/local factors. Our results show that people generally have positive views of RES technologies. While this indicates that Irish citizens agree with the move towards cleaner electricity sources, we find a reluctance amongst people to have these technologies located close to their homes. As for the drivers, we find that the respondents’ socio-psychological and political beliefs are generally more important than most socio-demographics in driving their opinions and their tendency to oppose infrastructure development locally. This finding underlines the relevance for policy makers to understand which objectives people consider most important and how these judgements are related to their opinions of different energy technologies.
    Date: 2016–10
  2. By: Ulf Liebe (Institute of Sociology, University of Bern); Anna Bartczak (Faculty of Economic Sciences, University of Warsaw); Jürgen Meyerhoff (Institute for Landscape and Environmental Planning, Technische Universität Berlin)
    Abstract: To gain acceptance for renewable energy production sites it is not sufficient just to develop the appropriate technology without taking the social context and fairness concerns into account. Using a factorial survey experiment we investigate the influence of both on the local acceptance of wind turbine developments in Germany and Poland, two countries differing in installed wind power capacity. Respondents were confronted with hypothetical situations describing the construction of wind farms varying, among others, in the opportunity to participate in the planning process (participatory justice), the distribution of turbines across regions (distributive justice) and ownership. We find higher acceptance levels in Poland than in Germany. Respondents in both countries are willing to accept new turbines in their vicinity if they can participate in decision making, the turbines are owned by a group of citizens and if the generated electricity is consumed in the region instead of being exported. Overall, participatory justice is more important than distributive justice. Confirming previous results, we also find that respondents who have already turbines in their vicinity show higher acceptance levels than those who are not yet affected. Thus, the negative externalities are likely to be overestimated in the planning and implementation process.
    Keywords: Distributive Justice, Factorial Survey Experiment, Participatory Justice, Wind Power
    JEL: Q42 Q48 Q54 Q56 R11 R12
    Date: 2016
  3. By: Marie Delaplace; Frédéric Dobruszkes
    Date: 2016
  4. By: Anna Alberini (AREC, University of Maryland and FEEM); Andrea Bigano (FEEM and CMCC); Milan Šcasný (Charles University, Environment Center); Iva Zverinová (Charles University, Environment Center)
    Abstract: Concerns about climate change are growing, and so is the demand for information about the costs and benefits of mitigating greenhouse gas emissions. This paper seeks to estimate the benefits of climate change mitigation, as measured by the public’s willingness to pay for such policies. We investigate the preferences of Italian and Czech households towards climate change mitigation policy options directly related to residential energy use. We use discrete choice experiments, which are administered in a standardized fashion to representative samples in the two countries through computer-assisted web interviews. The willingness to pay per ton of CO2 emissions avoided is €132 Euro for the Italians and 94 Euro for the Czech respondents (at 2014 purchasing power parity). We find evidence of considerable heterogeneity in WTP driven by income. The two samples differ in their “domestic” income elasticities of WTP, but comparison across the two countries suggests an income elasticity of WTP of one.
    Keywords: Energy-efficiency Incentives, Stated Preferences, CO2 Emissions Reductions, CO2 Mitigation Policies, Conjoint Choice Experiments, WTP for CO2 Emissions Reductions
    JEL: Q41 Q48 Q54 Q51
    Date: 2016–11
  5. By: Fadoua CHIBA
    Abstract: The paper analyses the development of the intermittent technologies to produce electricity, facing the competition of the incumbent sector, using conventional technologies. In our analysis of the interaction between these two sectors, we consider the environmental damage caused by the electricity production from fossil fuel. This allowed us to represent the social cost of electricity production. We show that it is socially favorable to keep some conventional capacities in reserve. We then investigate the efficiency of environmental taxes in the internalization of the environmental damage. The paper shows that there is not a rate tax capable of implementing the first-best equilibrium. Effectively, this requires a variable tax rate, which seems unrealistic in practice. We also determine the constrained second-best equilibrium and the tax rate that decentralizes it. Interestingly, we find that the interaction between a retail price and tax, both constant and the intermittency of renewable energy, yield to two phenomena that, on average, promote the investment in intermittent capacities.
    Keywords: Electricity, Intermittency, Tax, Renewable Energy, Pollution.
    JEL: D24 D61 Q41 Q42 Q48
    Date: 2016
  6. By: Inhoffen, Justus; Siemroth, Christoph; Zahn, Philipp
    Abstract: Minimum prices above the market level can lead to ineffcient production and oversupply. We investigate whether this effect is even more pronounced when decision makers are influenced by their social environment. Using data of minimum prices for renewable energy production in Germany, we analyze if individual decisions to install solar panels are affected by the investment decisions of others. We implement a propensity score matching routine on municipality level and estimate that existing panels in the municipality increase the probability and number of further installations considerably, even in areas with minimal solar potential. This social effect is stronger in areas with more solar potential and less unemployment. A higher number of existing panels and more concentrated installations increase the social effect further. We discuss policy implications of these social effects.
    Keywords: EEG , Minimum Prices , Peer Effects , Public Policy , Renewable Energy , Social Interaction , Social Effect , Social Multiplier , Solar Power , Solar Panels , Subsidy
    JEL: H23 L14 Q42 Q48 Q58
    Date: 2016
  7. By: Belleflamme, Paul; Peitz, Martin
    Abstract: In many markets, user benefits depend on participation and usage decisions of other users giving rise to network effects. Intermediaries manage these network effects and thus act as platforms that bring users together. This paper reviews key findings from the literature on network effects and two-sided platforms. It lays out the basic models of monopoly platforms and platform competition, and elaborates on some routes taken by recent research.
    Keywords: Network effects , digital platforms , two-sided markets , tipping , platform competition , intermediation , pricing , imperfect competition
    JEL: D43 L13 L86
    Date: 2016
  8. By: Lundin, Erik (Research Institute of Industrial Economics (IFN))
    Abstract: I examine the effects of privatization, in the form of acquisitions, in the Swedish electricity distribution sector. As the majority of the distribution networks remained publicly owned, I use a synthetic control method to identify the effects on price and labor efficiency. In comparison to their synthetic counterparts, I find that the acquired networks increased labor efficiency by on average 18 percent, while no effect is found on the price. Thus, the evidence suggests substantial efficiency gains but that these are not fed through to consumer prices. Since each acquisition involved several bordering networks that were separately operated by each municipality prior to the acquisitions, I examine to what extent the efficiency gains are likely to be driven by increased economies of scale. Results suggest that the entire effect can be explained by increased economies of scale, questioning the causal effect of privatization per se.
    Keywords: Incentive regulation; Electricity distribution; Natural monopoly; Norm model regulation; Privatization; Acquisitions
    JEL: L33 L52 L94
    Date: 2016–11–03

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