nep-reg New Economics Papers
on Regulation
Issue of 2018‒02‒19
fourteen papers chosen by
Natalia Fabra
Universidad Carlos III de Madrid

  1. The Effects of German Wind and Solar Electricity on French Spot Price Volatility: An Empirical Investigation By Adhurim Haxhimusa
  2. Credit constraints, energy management practices, and investments in energy saving technologies: German manufacturing in close-up By Löschel, Andreas; Lutz, Benjamin Johannes; Massier, Philipp
  3. Optimal management of a wind power plant with storage capacity By Jérôme Collet; Olivier Féron; Peter Tankov
  4. EU energy efficiency policy: How a more cost-efficient decarbonization could succeed By Tischler, Benjamin
  5. The Distributional Effects of Building Energy Codes By Christopher D. Bruegge; Tatyana Deryugina; Erica Myers
  6. Broad Based Subsidies or Targeted Transfers? An Analysis of the Electricity Subsidy in Pakistan By Andrew Feltenstein; Biplab Datta
  7. Strengthened competition in payment services By Demary, Markus; Rusche, Christian
  8. Public procurement as policy instrument for innovation By Czarnitzki, Dirk; Hünermund, Paul; Moshgbar, Nima
  9. Regulating Mismeasured Pollution: Implications of Firm Heterogeneity for Environmental Policy By Eva Lyubich; Joseph S. Shapiro; Reed Walker
  10. Is EU's Open Aviation Policy Good for Air Transport? By Megersa A. Abate; Panayotis Christidis
  11. Behavioral determinants of proclaimed support for environment protection policies By Björn Kauder; Niklas Potrafke; Heinrich Ursprung
  12. Determinants of Residential Solar Photovoltaic Adoption By Makena Coffman; Scott Allen; Sherilyn Wee
  13. Assessment of the impact of climate change on residential energy demand for heating and cooling By Alban Kitous; Jacques Despres
  14. Drivers of energy efficiency in German manufacturing: A firm-level stochastic frontier analysis By Lutz, Benjamin Johannes; Massier, Philipp; Sommerfeld, Katrin; Löschel, Andreas

  1. By: Adhurim Haxhimusa (Research Institute for Regulatory Economics, Vienna University of Economics and Business)
    Abstract: We examine the relationship between German wind and solar electricity and French spot price volatility. Using hourly data, we find that French imports from Germany driven by German wind and solar electricity sometimes decrease, sometimes increase the volatility of French spot prices. These two opposing effects depend on the shape of the French supply function and on the French demand. We, therefore, estimate different coefficients for imports depending on different demand levels. We acknowledge the endogeneity problem in identifying these effects and employ instrumental variable techniques to circumvent this problem. Our results show the urgent need for further coordination of national energy policies in order to reduce the potential for negative spill over effects of nationally driven energy policies in neighbouring countries as European electricity markets are becoming more integrated.
    Keywords: Wind and Solar Electricity, Price Volatility, Market Integration, Electricity Markets
    JEL: F15 L81 L98 Q42 Q48
    Date: 2018–01
  2. By: Löschel, Andreas; Lutz, Benjamin Johannes; Massier, Philipp
    Abstract: We analyze the drivers and barriers that influence investments increasing the energy efficiency of firms' production processes or buildings in the German manufacturing sector based on microdata. In particular, we shed light on the relationship between financial barriers (e. g. credit constraints), information and knowledge (e. g. energy management practices), salience of energy-related topics, and the investments in energy saving technologies. A better understanding of firms' investment behavior regarding energy saving technologies is crucial to design efficient policy measures, which are necessary to achieve the imposed ambitious climate and energy policy targets. We use data from 701 structured telephone interviews in combination with commercial and confidential firm-level data. Our results suggest that energy management practices have a statistically significant positive relationship with investment decisions on energy saving technologies for production processes and buildings. Credit constraints are a barrier to investments in the energy efficiency of firms' production processes. Furthermore, high energy cost shares of heating or cooling, high energy intensity, energy self-generation and structured internal decision making processes influence the investments in energy efficiency positively.
    Keywords: Energy efficiency,Credit constraints,Energy management,Manufacturing industry,Investment behavior
    JEL: D22 H23 Q41 Q48 Q58
    Date: 2017
  3. By: Jérôme Collet (EDF Lab); Olivier Féron (EDF Lab); Peter Tankov (CREST; ENSAE ParisTech)
    Abstract: We consider the problem of a wind producer who has access to the spot and intraday electricity markets and has the possibility of partially storing the produced energy using a battery storage facility. The aim of the producer is to maximize the expected gain of selling in the market the energy produced during a 24-hour period. We propose and calibrate statistical models for the power production and the intraday electricity price, and compute the optimal strategy of the producer via dynamic programming.
    Keywords: wind power generation, battery storage, intraday electricity market, stochastic control
    Date: 2017–11–02
  4. By: Tischler, Benjamin
    Abstract: At EU level, new proposed legislation for a clean-energy policy is being adopted. New policies are currently being discussed regarding the increased reduction of CO2 emissions, as well as EU-wide energy consumption targets for the year 2030 and national energy efficiency targets and measures to be derived from them. But what happens when the proposed objectives contradict and undermine each other? A restrictive energy consumption target can become a major obstacle to achieving the overall energy and climate-policy objective of cost-effective decarbonization of the energy system. Economic policy instruments for increasing energy efficiency in the EU ETS sectors can make it more difficult to achieve decarbonization at minimal cost. Energy efficiency targets and the corresponding economic policy measures can however make a worth-while contribution in sectors not included in the EU ETS. Instruments for increasing energy efficiency should aim at improving technical energy efficiency. With that in mind, the conception of quantitative targets and tools must be improved. The macroeconomic indicators for "energy efficiency" and "energy intensity" used thus far are unsatisfactory as simple political objectives and lead to wrong conclusions regarding the success of the economic policy instruments being used. The indicators must be decisively improved, for example, by considering factors such as business cycle and economic growth, as well as the proportion of renewable energy or of energy-intensive and less energy-intensive sectors. Furthermore, a better database is necessary.
    JEL: Q52 Q58
    Date: 2018
  5. By: Christopher D. Bruegge; Tatyana Deryugina; Erica Myers
    Abstract: State-level building energy codes have been around for over 40 years, but recent empirical research has cast doubt on their effectiveness. A potential virtue of standards-based policies is that they may be less regressive than explicit taxes on energy consumption. However, this conjecture has not been tested empirically in the case of building energy codes. Using spatial variation in California’s code strictness created by building climate zones, combined with information on over 350,000 homes located within 3 kilometers of climate zone borders, we evaluate the effect of building energy codes on home characteristics, energy use, and home value. We also study building energy codes’ distributional burdens. Our key findings are that stricter codes create a non-trivial reduction in homes’ square footage and the number of bedrooms at the lower end of the income distribution. On a per-dwelling basis, we observe energy use reductions only in the second lowest income quintile, and energy use per square foot actually increases in the bottom quintile. Home values of lower-income households fall, while those of high-income households rise. We interpret these results as evidence that building energy codes result in more distortions for lower-income households and that decreases in square footage are responsible for much of the code-induced energy savings.
    JEL: H23 Q4 Q48
    Date: 2018–01
  6. By: Andrew Feltenstein (Department of Economics, Andrew Young School of Policy Studies, Georgia State University); Biplab Datta (Department of Economics, Andrew Young School of Policy Studies, Georgia State University)
    Abstract: This paper studies the incidence of broad-based energy subsidies, and whether poor households could gain from targeted transfer programs financed by savings from energy subsidy reform. We analyze the tariff differential subsidy program in Pakistan, and find that the subsidy is regressive. We conduct a computable general equilibrium exercise and find that reducing energy subsidy would hurt both poor and non-poor households. However, redistributing savings from subsidy reform to poor households, would improve poor household’s welfare.
    Date: 2018–01
  7. By: Demary, Markus; Rusche, Christian
    Abstract: Starting on January 13, 2018, the Second Payment Services Directive (PSD2) will apply in the European Union. Among other things, the Directive's aim is to adapt regulation to the innovations in payment services and to promote the Single Market for non-cash payments. However, PSD2 will only strengthen competition between payment services under a common standard for the access to banking accounts.
    Date: 2018
  8. By: Czarnitzki, Dirk; Hünermund, Paul; Moshgbar, Nima
    Abstract: The use of public procurement to promote private innovation activities has attracted increasing attention recently. Germany implemented a legal change in its procurement framework in 2009, which allowed government agencies to specify innovative aspects of procured products as selection criteria in tender calls. We analyze a representative sample of German firms to investigate whether this reform stimulated innovation in the business sector. Across a wide set of specifications - OLS, nearest-neighbor matching, IV regressions and difference-in-differences - we find a robust and significant effect of innovationdirected public procurement on turnover from new products and services. However, our results show that the effect is largely attributable to innovations of more incremental nature rather than market novelties.
    Keywords: Public Procurement of Innovation,Public Procurement with Contracted Innovation,Technical Change,Research and Development,Econometric Policy Evaluation
    JEL: H57 O38
    Date: 2018
  9. By: Eva Lyubich; Joseph S. Shapiro; Reed Walker
    Abstract: This paper provides the first estimates of within-industry heterogeneity in energy and CO2 productivity for the entire U.S. manufacturing sector. We measure energy and CO2 productivity as output per dollar energy input or per ton CO2 emitted. Three findings emerge. First, within narrowly defined industries, heterogeneity in energy and CO2 productivity across plants is enormous. Second, heterogeneity in energy and CO2 productivity exceeds heterogeneity in most other productivity measures, like labor or total factor productivity. Third, heterogeneity in energy and CO2 productivity has important implications for environmental policies targeting industries rather than plants, including technology standards and carbon border adjustments.
    JEL: F18 H23 Q56
    Date: 2018–01
  10. By: Megersa A. Abate; Panayotis Christidis
    Keywords: Transport - Airports and Air Services Transport - Transport Economics Policy & Planning
    Date: 2017–06
  11. By: Björn Kauder; Niklas Potrafke; Heinrich Ursprung
    Abstract: Using a representative survey of German university students, we confirm that proclaimed support for environment protection policies depends on socio-cultural factors and political ideology. Unlike most related studies for other countries, we find that the environmental policy stance of German partisans does not follow the left-right cleavage. Only about 25% of the social-democratic partisans wholeheartedly support environment protection policies, whereas 50% of the green partisans, who, in Germany, also belong to the political left, do so; and when controlling for socio-cultural influences, social-democratic partisans become undistinguishable from Christian-conservative and market-oriented partisans. Focusing on behavioral influences, we find that some of the respondents’ psychological traits are not filtered through their political ideology but directly influence their proclaimed attitudes towards environment protection policies. We identify as important behavioral determinants the locus of control and psycho-logical traits that capture the respondents’ susceptibility to making use of expressive rhetoric.
    Keywords: Environment protection, political preferences, ideology, identity, expressive behavior.
    JEL: D72 P16 Q51 Q58
    Date: 2018
  12. By: Makena Coffman (Department of Urban and Regional Planning, University of Hawaii at Manoa; UHERO); Scott Allen (Department of Urban and Regional Planning, University of Hawaii at Manoa); Sherilyn Wee (UHERO)
    Abstract: Hawaii is a leader in distributed solar photovoltaic (PV) adoption. It has the highest rate of PV-based electricity penetration in the U.S. and rivals global front runners (Trabish, 2016). The policy impetus towards large-scale adoption of renewable energy in Hawaii comes from its Renewable Portfolio Standard (RPS), with a target of 40% net electricity sales from renewable sources by the year 2030 and 100% by 2045. Rooftop PV provides the largest share of renewable energy in Hawaii’s electricity generation portfolio. Much of the growth in PV has been through residential systems, as nearly 17% of homes, and 32% of single-family homes on Oahu have PV (Trabish, 2016). The adoption of distributed PV by Hawaii’s households has been motivated by a combination of Hawaii’s high electricity prices, federal and state solar PV income tax credits, net-energy metering (NEM) and other grid-supply arrangements, as well as strong solar resources (Coffman et al., 2016). This study analyzes demographic factors related to residential PV system adoption in Hawaii. It provides an econometric analysis, augmented by maps, to better understand the demographic characteristics of households adopting PV systems. Understanding drivers of past uptake is important to gaining insight into future trends, particularly as Hawaii continues towards its 2045 RPS goal of 100%.
    Date: 2018–02
  13. By: Alban Kitous (European Commission - JRC); Jacques Despres (European Commission - JRC)
    Abstract: Climate change in Europe leads to a decrease of residential heating needs and an increase of residential cooling needs. The impact on cooling needs is higher than on heating, in each of the climatic European regions. The overall residential heating and cooling needs are expected to decrease by a quarter by the end of the century, due to climate change. This order of magnitude remains when accounting for a higher insulation level of buildings.
    Keywords: climate change, energy, heating, cooling
    Date: 2017–12
  14. By: Lutz, Benjamin Johannes; Massier, Philipp; Sommerfeld, Katrin; Löschel, Andreas
    Abstract: Increasing energy efficiency is one of the main goals in current German energy and climate policies. We study the determinants of energy efficiency in the German manufacturing sector based on official firm-level production census data. By means of a stochastic frontier analysis, we estimate the cost-minimizing energy demand function at the two-digit industry level using firm-level heterogeneity. Apart from the identification of the determinants of the energy demand function, we also analyze potential drivers of energy efficiency. Our results suggest that there is still potential to increase energy efficiency in most industries of the German manufacturing sector. Furthermore, we find that in most industries exporting and innovating firms as well as those investing in environmental protection measures are more energy efficient than their counterparts. In contrast, firms which are regulated by the European Union Emissions Trading System are mostly less energy efficient than non-regulated firms.
    Keywords: Stochastic Frontier Analysis,Stochastic Demand Frontier,Energy Efficiency,Climate Policy,Manufacturing
    JEL: D22 D24 L60 Q41
    Date: 2017

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