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on Regulation |
| By: | Yimeng Du (Graduate School of Economics, Kobe University); Kenji Takeuchi (Graduate School of Economics, Kobe University) |
| Abstract: | This study investigates the effectiveness of regionally differentiated feed-in tariffs (FIT) for the development of renewable energy in China. By using a spatial regression discontinuity design, we estimate the impacts of regionally differentiated FITs on the outcome indicators of wind and solar power generation, such as utilization rate, installed capacity, power generation, and hours of operation. Our findings show that FIT implementation plays a role in promoting renewable energy development in resourcepoor regions. A small difference in the tariff rate leads to statistically significant differences in outcome indicators among regions. Our results suggest that regionally differentiated FITs might help mitigate the overproduction of wind electricity in regions with abundant wind resources but low electricity demand. |
| Keywords: | Feed-in Tariff; Renewable Energy; Renewable Curtailment; Spatial Regression Discontinuity Design |
| JEL: | Q42 Q48 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:koe:wpaper:1828&r=reg |
| By: | Steven E. Sexton; A. Justin Kirkpatrick; Robert Harris; Nicholas Z. Muller |
| Abstract: | Federal and state policies in the U.S. subsidize electricity generation from 1.4 million rooftop solar arrays because of pollution avoidance benefits and grid congestion relief. Yet because these benefits vary across the U.S. according to solar irradiance, technologies of electricity generators, and grid characteristics, the value of these benefits, and, consequently, the optimal subsidy, are largely unknown. Policy, therefore, is unlikely to have induced efficient solar investments. This paper (1) provides the first systematic, theoretically consistent, and empirically valid estimates of pollution damages avoidable by solar capacity in each U.S. zip code, (2) relates these external benefits to subsidy levels in each U.S. state, and (3) estimates the share of these benefits that spillover to other states. It also measures the energy value of capacity across the U.S. and the value of transmission congestion relief in California. Environmental benefits are shown to vary considerably across the U.S., and to largely spillover to neighboring states. Subsidy levels are essentially uncorrelated with environmental benefits contributing to installed capacity that sacrifices approximately $1 billion per year in environmental benefits. Energy value is estimated to vary less than environmental benefits, while California rooftop solar is shown to generate no congestion relief. |
| JEL: | Q47 Q48 Q50 Q52 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25241&r=reg |
| By: | Garth Heutel |
| Abstract: | Allowing emissions permits to be banked and borrowed over time can yield efficiency gains. I develop a model to demonstrate that banking and borrowing can also be allowed for a price policy. I compare expected welfare between price and quantity policies, with and without banking, under several different scenarios regarding uncertainty. A bankable policy can provide an efficiency improvement by allowing for smoothing of costs, though it does not necessarily dominate a policy that does not allow banking. The ranking of prices vs. quantities and of bankability vs. non-bankability depends on both the slopes of marginal costs and benefits and on the specification of uncertainty. |
| JEL: | D62 H23 Q54 Q58 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25235&r=reg |
| By: | Boysen, Nils; Briskorn, Dirk; Emde, Simon |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:dar:wpaper:109725&r=reg |
| By: | Lauf, Thomas; Ek, Kristina; Gawel, Erik; Lehmann, Paul; Söderholm, Patrik |
| Abstract: | The purpose of this paper is to investigate the impacts of land-use policies on wind power deployment at the regional levels in Germany and Sweden, respectively. We use data on added wind capacity at the German district level and the Swedish municipality level over the time period 2008-2012. These data are analysed with a model specification permitting the probability of having any capacity addition (1/0) during this period to be independent of the level of the installed capacity (in MW). The results confirm that the regional variations in wind power deployment can to a significant extent be attributed to land-use policies, not least in the form of priority areas and the designation of restricted areas. The quantitative results display interesting differences across the two countries, not least concerning the role of priority areas, which is found to be much more profound in the German case. The assignment of protected areas appears instead to have constituted a more stringent policy tool in Sweden. Furthermore, cross-country differences in the relevance of various explanatory variables are also found to be related to geographical patterns, the overall extent of wind power deployment, as well as the design of the support schemes for wind power. Overall, the results highlight the need for better understanding of the critical role of land-use policies for future renewable energy development in various national and institutional contexts. |
| Keywords: | wind power,regional distribution,land-use policy,Germany,Sweden |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ufzdps:12018&r=reg |
| By: | Zoltan Papai (Infrapont Economic Consulting, Hungary); Gergely Csorba (Center of Economics and Regional Sciences – Institute of Economics Hungarian Academy of Sciences and Infrapont Economic Consulting); Peter Nagy (Infrapont Economic Consulting); Aliz McLean (Infrapont Economic Consulting) |
| Abstract: | Network sharing agreements have become increasingly widespread in mobile telecommunications markets. They carry undeniable advantages to operators and consumers alike, but also the potential for consumer harm. We emphasize that not all NSAs are created equal: the assessment of harms and counterweighing benefits to customers due to an NSA is a complex endeavour. In this paper, we present a framework for the competitive assessment of NSAs, detailing the possible concerns that may arise, the main factors that influence their seriousness, ways to mitigate the concerns and the principles of assessing efficiency benefits. |
| Keywords: | mobile markets, network sharing, competition, competition assessment |
| JEL: | K21 L13 L41 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:1828&r=reg |
| By: | Alex Schmitt |
| Abstract: | At what rate should a government price carbon emissions? This paper analyzes optimal carbon pricing while taking into account interactions with the taxation of labor and capital income. In an otherwise standard climate-economy model, the policy maker has to resort to a distortionary tax on labor and capital income, and is unable to commit to future policies. I show that the optimal time-consistent carbon price is in general not at its Pigouvian level, that is, at the level of marginal damages induced by climate change. This is due to the presence of costs and benefits of emitting carbon that only materialize in the presence of income taxes. Quantitatively, I find that in a standard calibration of the model, this tax-interaction effect accounts for deviation of the optimal tax from the level of marginal climate damages in the ballpark of 10%, due to the second-best effects partially offsetting each other. Compared to a setting with lump-sum income taxes, I observe a smaller optimal carbon price without commitment, with the average differences over time amounting to 14%. |
| Keywords: | Climate-economy modeling, carbon tax, optimal income taxation |
| JEL: | E61 E62 H21 H23 Q54 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ifowps:_274&r=reg |
| By: | Paul Igwe (University of Lincoln); Chioma Vivienne Nwokoro (Eastern Palm University) |
| Abstract: | This article examines the innovation in the offshore renewable energy (ORE) industry using Open Innovation System (OIS), platforms and network perspective. Despite the benefits of ORE, Operation and Maintenance (O&M) costs account for up to one-third of total wind energy project lifecycle expenditure requiring relationships with multiple external partners to improve the supply chain and O&M activities. Therefore, management of the O&M activities of the supply chain and logistics has become an excellent place to drive efficiency and reduce cost thereby creating innovative products and services, business clusters and job opportunities. Findings show how strategic resources help offshore companies to reduce cost and achieve environmental, economic and social benefit derived from ORE. The OIS is used to explain the importance of new resources in technology, knowledge sharing and relationships, and stresses the role of stakeholders in addressing the challenges. The limitation of this study is related to reliance on secondary data. However, it provided an opportunity to elaborate on OIS theory and reinforces the importance of knowledge sharing, collaboration and network advantage. Overall, this provided insights into the constituent resources needed for successful OIS, regional entrepreneurship and helps move renewable energy research from a technological advancement challenges to a problem of strategic resources and relational capabilities. |
| Keywords: | Open Innovation System, Regional Entrepreneurship, Dynamic Capabilities, Renewable Energy |
| JEL: | Q55 R38 Q28 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:6810091&r=reg |
| By: | Hattori, Keisuke; Zennyo, Yusuke |
| Abstract: | This paper studies the optimal pricing and diffusion of durable goods that exhibit positive network externalities, when consumers are heterogeneous in their expectations about future network sizes. We consider the existence of naive consumers, as well as of sophisticated consumers having fulfilled expectations. We find that the firm charges the sequential-diffusion pricing that makes sophisticated consumers function as early adopters, unless consumers quickly become bored with using the goods and/or unless the firm heavily discounts its future profits. We also compare the profitability of three possible pricing strategies with different commitment powers: fixed, responsive, and pre-announced pricing. |
| Keywords: | durable goods; network externalities; diffusion process; consumer naivete; dynamic pricing |
| JEL: | D21 D42 L12 L14 |
| Date: | 2018–04–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:89893&r=reg |
| By: | Estelle Cantillon; Aurelie Cecile Dominique Slechten |
| Abstract: | A key policy argument in favor of emissions markets (relative to command-and-control types of regulation) is their ability to aggregate dispersed information and generate price signals to guide firms' trading and abatement decisions. We investigate this argument in a multi-period model where firms receive noisy private signals about their current period emissions and privately observe their previous period emissions before this information is made public to the rest of the market. Firms respond to information by trading and abating emissions. We show that there exists a rational expectations equilibrium that fully aggregates firms' private information, justifying the policy argument in favor of emissions markets, in the absence of other frictions. We also derive predictions about how prices should be reacting to new private or public information and show that the possibility of abatement dampens the impact of shocks on prices. Finally, we show that the information aggregation result breaks down if firms' abatement costs are also private information. |
| Keywords: | emissions trading, Information aggregation, efficient market hypothesis, price formation |
| JEL: | G14 D83 D84 D85 Q58 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:251505309&r=reg |
| By: | Santeramo, Fabio Gaetano; Searle, Stephanie |
| Abstract: | The United States (US) Renewable Fuel Standard and California’s Low Carbon Fuel Standard support the use of soy biodiesel and renewable diesel in the transport fuel supply for climate mitigation. However, linkages between the markets for soy oil and palm oil, which is associated with very high land use change emissions, could negatively affect the climate performance of soy-based biofuels. This study estimates the own and cross-price elasticities for the supply of soy and palm oils in the US using country-level data from 1992 to 2016 under rational expectations, through a seemingly unrelated regressions system of equations. We find a positive cross-price elasticity of palm oil import with respect to soy oil price and a positive reaction of supply of soy oil to increase in prices of palm oil. These results suggest that US biofuel policies may underestimate substitution between soy and palm oils and thus overestimate the climate benefits from soy-based biofuel. |
| Keywords: | Biofuel; Price elasticity; Oils market; SURE |
| JEL: | O13 P28 Q21 Q41 Q42 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:90248&r=reg |
| By: | Donna, Javier D. |
| Abstract: | This paper develops a structural model of urban travel to estimate long-run price elasticities. A dynamic discrete choice demand model with switching costs is estimated, using a panel dataset with public market-level data on automobile and public transit use for Chicago. The estimated model shows that long-run own- (automobile) and cross- (transit) price elasticities are more elastic than short-run elasticities, and that elasticity estimates from static and myopic models are downward biased. The estimated model is used to evaluate the response to a gasoline tax. Static and myopic models mismeasure long-run substitution patterns, and could lead to incorrect policy decisions. |
| Keywords: | Long-run price elasticities, Dynamic demand travel, Hysteresis |
| JEL: | L71 L91 L98 |
| Date: | 2018–11–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:90260&r=reg |
| By: | Peter R. Hartley (Department of Economics and Center for Energy Studies, James A. Baker III Institute for Public Policy, Rice University and Business School, The University of Western Australia) |
| Keywords: | Energy transition, wind, nuclear, natural gas, electricity storage |
| JEL: | D92 L94 Q42 Q54 Q55 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:uwa:wpaper:17-07&r=reg |
| By: | Fujii, Hidemichi; Managi, Shunsuke |
| Abstract: | Sustainable green technology is an important contributor to creating a sustainable society by simultaneously promoting environmental conservation and economic development. This study examines the determinants of sustainable green technology invention in China, with a focus on the differences in green technology development priorities in each five-year plan period. This study uses patent publication data in a patent decomposition analysis framework. We find that sustainable green patent publications increased due to efficiency improvements, the prioritization of sustainable green patents, an increased R&D expenditure share and economic growth, especially during periods of gradual economic development in China. Additionally, we find that the relative priority of R&D shifted from renewable energy technology to pollution abatement and other sustainable green technology in the 12th five-year plan. The different R&D priority trends for sustainable green technologies among the five-year plans can be used to formulate effective policies that promote sustainable green technology invention. |
| Keywords: | sustainable green technology; patent data; decomposition analysis; China; priority change |
| JEL: | O32 O44 Q55 Q56 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:90251&r=reg |
| By: | Clément Bonnet; Samuel Carcanague; Emmanuel Hache; Gondia Sokhna Seck; Marine Simoën |
| Abstract: | Intellectual property is a central issue in the climate negotiations. On the one hand, it shapes and encourages innovation in low-carbon technologies. On the other hand, it reduces access to these technologies by giving patent holders market power. We analyze the interactions between climate negotiations and the acquisition of patents on renewable energy technologies. First, we recall the geopolitical nature of intellectual property and explain how it is modified by the particularities of low-carbon innovation. The second part of this article is devoted to an inventory of the production of inventions in renewable energy technologies (RETs). In particular, we focus on the relative technological advantages of countries and the value of patented inventions. Major changes are observed in the geographical distribution of low-carbon innovation during the 2000s and they foreshadow a reorganization of the geopolitical balances of innovation in renewable energies. |
| Keywords: | Patent data, energy transition, renewable energy technology, innovation, international relations |
| JEL: | Q42 Q55 O31 O38 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2018-45&r=reg |
| By: | Jurjen (J.J.A.) Kamphorst (Erasmus University Rotterdam); Ewa (E.) Mendys-Kamphorst (CEG); Bastian (B.) Westbrock (Utrecht University) |
| Abstract: | According to standard economic wisdom, fixed costs should not matter for pricing decisions. However, outside economics, it is widely accepted that firms need to increase their prices after a fixed cost rise. In this note, we show that a liquidity-constrained firm that maximizes lifetime profits should increase its price after a fixed cost increase, if future profits depend positively on current sales. The reason is that then the optimal price is lower than the one that maximizes the current profit. Because the higher cost necessitates higher current profits to avoid bankruptcy, the firm needs to increase its price. |
| Keywords: | fixed costs; sunk costs; brand loyalty; switching costs; pricing |
| JEL: | D42 L11 |
| Date: | 2018–11–28 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20180095&r=reg |
| By: | Mehmet Balcilar (Department of Economics, Eastern Mediterranean University); Firat Emir (Department of Economics, Eastern Mediterranean University); Muhammad Shahbaz (Montpelier Business School, Montpelier, France) |
| Abstract: | This paper examines the dynamics of the energy intensity convergence in the EU-28 countries using panel data for the period from 1990 to 2016. We use Phillips and Sul’s (PS) (2007) approach to test for the energy intensity convergence and identify convergence clusters. In addition to the EU-28 members, EU-15 and the new EU members joined after 2004 are analysed as distinct groups for the periods 1990–2016, 1990–2004 and 2005–2016. Our results show convergence amongst the EU countries during the full and two subsample periods considered. However, the convergence takes place within clusters and there is no evidence of all members converging to a single club. Indeed, after the expansion of the EU, and depending on the decoupling of energy intensity levels amongst EU countries, convergence became more common and diverse. The study also makes policy recommendations based on the empirical findings. |
| Keywords: | Energy Intensity, Convergence Test, European Union |
| JEL: | O13 O47 O5 Q52 C22 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:emu:wpaper:15-37.pdf&r=reg |
| By: | Emmanuel Hache; Angélique Palle |
| Abstract: | This article studies the integration of variable renewable energy sources (RES) into power networks. The main goal is to confront the contents and trends of scientific literature with the eyes and projects of researchers on future topics and issues to be solved, especially in terms of modeling of electrical systems. The analysis relies on a bibliometric study of the Scopus database on the topic and on an online survey sent to the corresponding authors of the identified papers. The paper analyses the dynamics of publication, clusters of collaboration and main studied topics. It then identifies potential research leads, among which unresolved challenges regarding technical aspects, markets and financing issues and social aspects. The paper concludes on the policy implications of the mentioned results. The disparity of models and results is still a necessary evil as research is not mature enough to integrate in one model all the very complex parameters of VRE integration into power systems. Some recurring lacks though, such as the impact of emergent technologies or the development of substitute low carbon emitting technology (other than solar and wind), need to be addressed. The paper also advocates the need for a systemic vision, for both research and policy makers that goes beyond the sole power system. |
| Keywords: | Variable renewable energy, bibliometric analysis, scenario, survey, power network, policy |
| JEL: | Q42 Q48 Q55 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2018-50&r=reg |
| By: | Boysen, Nils; Briskorn, Dirk; Emde, Simon |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:dar:wpaper:109729&r=reg |