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on Regulation |
| By: | Kaloud Tobias (Department of Economics, Vienna University of Economics and Business) |
| Abstract: | During the past decade, renewable energy sources have become an indispensable pillar in European electricity generation. This paper aims at examining if the increasing importance of renewables stimulates investment in European power transmission networks. The question of interest is addressed by an error correction investment model that builds on Neoclassical theory and is further augmented by recent literary findings. Under the proposed threefold estimation strategy, the share of renewables is not found to significantly influence investment spending when the full set of transmission system operators are considered. However, a slight and justified sample restriction leads to the conclusion that a rising share of renewable energy sources substantially increases investment in power transmission networks. |
| Keywords: | Renewables, Investment, Transmission Network, Electricity |
| JEL: | C33 L50 L94 Q42 Q48 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwwuw:wuwp249&r=reg |
| By: | Kaloud, Tobias |
| Abstract: | During the past decade, renewable energy sources have become an indispensable pillar in European electricity generation. This paper aims at examining if the increasing importance of renewables stimulates investment in European power transmission networks. The question of interest is addressed by an error correction investment model that builds on Neoclassical theory and is further augmented by recent literary findings. Under the proposed threefold estimation strategy, the share of renewables is not found to significantly influence investment spending when the full set of transmission system operators are considered. However, a slight and justified sample restriction leads to the conclusion that a rising share of renewable energy sources substantially increases investment in power transmission networks. |
| Keywords: | Renewables, Investment, Transmission Network, Electricity |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wus005:5576&r=reg |
| By: | Juan Jung (AQR-IREA, Universitat de Barcelona, Av. Diagonal 690, 08034 Barcelona, Spain.); Enrique López-Bazo (AQR-IREA, Universitat de Barcelona, Av. Diagonal 690, 08034 Barcelona, Spain.) |
| Abstract: | This paper analyses the incidence of broadband on regional productivity in Brazil, intending to find out if the economic impact is uniform across all territories of the country. The possibility of performing a regional approach, instead of the usual country-level analysis, means an opportunity to disentangle the economic impact of broadband at territories which share a common institutional and regulatory framework as are the regions inside a country. Results suggest that the impact of broadband on productivity is positive although not uniform across regions. On the one hand, it seems to depend on connection quality and network effects. Faster download speed and critical-mass accounting for network externalities in the region enhance the economic impact of broadband. On the other hand, higher productivity gains are estimated for the less developed regions. The fact that the less productive regions in Brazil seem to be benefiting more from broadband may suggest that it can constitute a factor favoring regional convergence in the country. |
| Keywords: | Broadband, Information and Communication Technologies, Regional Productivity. JEL classification: O33, O47, R11. |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:ira:wpaper:201708&r=reg |
| By: | Niko Jaakkola; Frederick van der Ploeg |
| Abstract: | Global warming can be curbed by pricing carbon emissions and thus substituting fossil fuel with renewable energy consumption. Breakthrough technologies (e.g., fusion energy) can reduce the cost of such policies. However, the chance of such a technology coming to market depends on investment. We model breakthroughs as an irreversible tipping point in a multi-country world, with different degrees of international cooperation. We show that international spill-over effects of R&D in carbon-free technologies lead to double free-riding, strategic over-pollution and underinvestment in green R&D, thus making climate change mitigation more difficult. We also show how the demand structure determines whether carbon pricing and R&D policies are substitutes or complements. |
| Keywords: | global warming, carbon pricing, renewable R&D, tipping point, international cooperation, non-cooperative policies, feedback Nash equilibrium |
| JEL: | D2 D90 H23 Q35 Q38 Q54 Q58 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:oxcrwp:190&r=reg |
| By: | Griffith-Jones, Stephany; Spratt, Stephen; Andrade, Rodrigo; Griffith-Jones, Edward |
| Abstract: | This paper examines if recent sharp declines in the price of oil and other fossil fuels will discourage private investment in renewable energy, which is key for climate change mitigation. The increase in private renewables investment in the Latin America and the Caribbean (LAC) region have been driven by sharp declines in costs alongside supportive policies. The sharp fall in the price of oil and other fossil fuels since 2014 risks disrupting continued private investment in renewables if they becomes insufficiently profitable. The decline in oil and other fossil fuel prices presents an opportunity for governments to reduce subsidies to them. For countries without such large subsidies, governments could increase taxes on them. This would alleviate their negative effects on climate change. |
| Keywords: | RECURSOS RENOVABLES, FUENTES DE ENERGIA RENOVABLES, COSTOS, INVERSIONES, COMBUSTIBLES FOSILES, PRECIOS, PRECIOS DEL PETROLEO, POLITICA ENERGETICA, ESTUDIOS DE CASOS, RENEWABLE RESOURCES, RENEWABLE ENERGY SOURCES, COSTS, INVESTMENTS, FOSSIL FUELS, PRICES, PETROLEUM PRICES, ENERGY POLICY, CASE STUDIES |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col035:41679&r=reg |
| By: | Perdomo Calvo, Jorge Andrés |
| Abstract: | Several articles have theoretically and empirically verified favorable changes in the value (per square meter) of properties near urban mass transit infrastructure. The main purpose of this study was to demonstrate this effect under an unbiased specification using Geographical Information Systems (GIS) and advanced econometric techniques (Pooled Cross Sections, Spatial Econometrics, Box-Cox Transformation and Structural Change). Particularly, if the construction of the bus rapid transit (BRT) infrastructure impacted the price market (per square meter or asking price) of the residential and commercial properties in Bogota and Barranquilla (Colombia) with access to the BRT. Results indicated the true private monetary or higher valuation of such properties, caused by public investment over several years (1999-2011). This effect is conceived as a positive economic externality of the BRT projects |
| Keywords: | Property value; BRT infrastructure; Colombia; advanced econometric techniques; unbiased specification |
| JEL: | C52 L92 R14 R23 R42 |
| Date: | 2015–10–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:79611&r=reg |
| By: | Knaut, Andreas (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)); Paschmann, Martin (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)) |
| Abstract: | Restricted participation in sequential markets may cause high price volatility and welfare losses. In this paper we therefore analyze the drivers of restricted participation in the German intraday auction which is a short-term electricity market with quarter-hourly products. Applying a fundamental electricity market model with 15-minute temporal resolution, we identify the lack of sub-hourly market coupling being the most relevant driver of restricted participation. We derive a proxy for price volatility and find that full market coupling may trigger quarter-hourly price volatility to decrease by a factor close to four. |
| Keywords: | Sequential Electricity Markets; Short-term Market Dynamics; Electricity Market Interaction; Short-term Price Formation; Restricted Market Participation; Price Volatility |
| JEL: | C13 C51 D44 D47 L94 Q21 Q41 |
| Date: | 2017–06–13 |
| URL: | http://d.repec.org/n?u=RePEc:ris:ewikln:2017_005&r=reg |
| By: | Dellis, Konstantinos; Sondermann, David |
| Abstract: | Lobbying can provide policy makers with important sector-specific information and thereby facilitating informed decisions. If going far beyond this, in particular if successfully influencing policy makers to unnecessarily tighten regulation or not opening already excessively regulated markets, it could potentially reduce overall economic welfare. We create a unique firm-level database on EU lobby activity and firm characteristics. We tend to find that firms in more protected sector, e.g. firms from non-tradable or higher regulated sectors tend to spend more for lobby activities. Also such firms tend to have higher profit margins and lower productivity, as often the case in sheltered sectors. JEL Classification: D72, D78, O38 |
| Keywords: | lobbying, political economy, regulation |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20172071&r=reg |
| By: | André De Palma (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Stef Proost (Department of Economics, KU Leuven); Ravi Seshadri (Singapore-MIT Alliance for Research and Technology (SMART) Centre); Moshe Ben-Akiva (MIT - Massachusetts Institute of Technology) |
| Abstract: | To address traffic congestion, two categories of instruments are used: price regulation (for instance, road pricing or congestion tolling) and quantity regulation (credit-based mobility schemes). Although the comparison of price and quantity regulation has received significant attention in the economics community, the literature is relatively sparse in the context of transportation systems. This paper develops a methodology to compare the toll and mobility permit instruments using a simple transportation network consisting of parallel highway routes and a public transport alternative. The permits can be traded across roads. The demand for each route is determined by a mixed logit route choice model and the supply consists of static congestion. The comparison is based on the optimum social welfare which is computed for each instrument by solving a non-convex optimization problem involving the mixed logit equilibrium constraints. Equity considerations are also examined. Numerical experiments conducted across a wide range of demand/supply inputs indicate that the toll and mobility permit instruments perform very closely in efficiency terms. The permit system is on average more efficient, but only by a small margin. |
| Keywords: | Social Welfare, Mixed Logit,Tolls, Mobility Permits, Equity, Stochastic Demand |
| Date: | 2016–11–16 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-01397582&r=reg |
| By: | Hilde C. Bjørnland (BI Norwegian Business School and Norges Bank (Central Bank of Norway)); Frode Martin Nordvik (BI Norwegian Business School and Norges Bank (Central Bank of Norway)); Maximilian Rohrer (BI Norwegian Business School) |
| Abstract: | We analyse if supply exibility in oil production depends on the extraction technology. In particular, we ask to what extent shale oil producers respond to price incentives by changing completion of new wells as well as oil production from completed wells. Using a novel well-level monthly production data set covering more than 15,000 crude oil wells in North Dakota, we find large differences in response between conventional and unconventional (shale) extraction technology: While shale oil wells respond significantly to spot future spreads by changing both well completion and crude oil production, conventional wells do not. Our results suggest that firms using shale oil technology are more exible in allocating output intertemporally. We interpret such output pattern of shale oil wells to be consistent with the Hotelling theory of optimal extraction. |
| Keywords: | Oil extraction, crude oil prices, US oil shale boom, Hotelling theory |
| JEL: | C33 L71 Q31 Q40 |
| Date: | 2017–05–31 |
| URL: | http://d.repec.org/n?u=RePEc:bno:worpap:2017_09&r=reg |
| By: | Hannah Krovetz; Rebecca Taylor; Sofia Villas-Boas |
| Abstract: | In the context of recent California drought years, we investigate empirically whether consumers are willing to pay for more efficient water usage in the production of four California agricultural products. We implement an internet survey choice experiment for avocados, almonds, lettuce, and tomatoes to elicit consumer valuation for water efficiency via revealed choices. We estimate a model of consumer choices where a product is defined as a bundle of three attributes: price, production method (conventional or organic), and water usage (average or efficient). Varying the attribute space presented to consumers in the experimental choice design gives us the data variation to estimate a discrete choice model—both conditional logit specifications and random coefficient mixed logit specifications. We find that on average consumers have a significant positive marginal utility towards water-efficiency and estimate that there is an implied positive willingness to pay (WTP) of about 12 cents per gallon of water saved on average. Moreover, informing consumers about the drought severity increases the WTP for low water footprint options, but not significantly. We find that there is heterogeneity in the WTP along respondents' education, race, and also with respect to stated environmental concern. Our findings have policy implications in that they suggest there to be a market based potential to nudge consumers who want to decrease their water footprint and follow a more sustainable diet, namely, by revealing information on the product's water footprint in a form of a label. Simulations of removing low water footprint labels from the choice set attributes imply significant consumer surplus losses, especially for the more educated, white, and more environmentally concerned respondents. |
| JEL: | Q18 Q25 Q54 Q51 Q21 M30 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23495&r=reg |
| By: | Reda Cherif; Fuad Hasanov; Aditya Pande |
| Abstract: | Recent technological developments and past technology transitions suggest that the world could be on the verge of a profound shift in transportation technology. The return of the electric car and its adoption, like that of the motor vehicle in place of horses in early 20th century, could cut oil consumption substantially in the coming decades. Our analysis suggests that oil as the main fuel for transportation could have a much shorter life span left than commonly assumed. In the fast adoption scenario, oil prices could converge to the level of coal prices, about $15 per barrel in 2015 prices by the early 2040s. In this possible future, oil could become the new coal. |
| Date: | 2017–05–22 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:17/120&r=reg |
| By: | Raymond Deneckere (University of Wisconsin-Madison [Madison]); André De Palma (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Luc Leruth (University of Liege, IMF Office in Europe - EUO) |
| Abstract: | We introduce risk aversion in a mixed moral hazard/adverse selection model. Under plausible assumptions, the effort level of the firm is distorted downward from the first best level of effort for both agent types. Thus, the traditional result of no distortion on the top does not hold with risk aversion. We also show that the effort level of the low-cost type may be distorted more than that of the high cost type. With an observable cost shock, an increase in exogenous risk may increase the effort level of the efficient firm and lower the expected cost of the project. |
| Keywords: | Incentives,Contract Theory,Risk-Sharing., Regulation |
| Date: | 2016–11–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-01393213&r=reg |