|
on Regulation |
| By: | Imam, M.; Jamasb, T.; Llorca, M. |
| Abstract: | As part of their electricity sector reforms, Sub-Saharan African countries have established independent regulatory agencies to signal legal and political commitment to end self-regulation and provision of service by the state. The reforms aimed to encourage private investments, improve efficiency, and extend the service to the millions who lacked access to it. However, after nearly two and half decades of reforms, these expectations have not been met and the electricity sectors of these countries remain undeveloped. There are anecdotes that these outcomes are due to poor design, non-credible, unpredictable regulations, and political interference. This paper investigates the performance of the reforms in the context of government political ideology. We use a dynamic panel estimator and data from 45 countries from 2000 to 2015 to analyse the role of ideological differences in the effect of independent sector regulation on access to electricity and installed capacity. We find negative impact from independent regulatory agencies on installed capacity in countries with left-wing governments, while in countries with right-wing governments we find positive effects on capacity. Also, we find negative impact on access in countries with left-wing governments, while we find no significant impact for countries with right-wing governments. The results have interesting policy implications for private sector participation, increased generation capacity and access rates especially in countries with left-wing governments. |
| Keywords: | independent regulation, electricity sector reform, government ideology, dynamic GMM, Sub-Saharan Africa |
| JEL: | D73 Q48 L51 L94 O55 P16 |
| Date: | 2019–05–19 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1949&r=all |
| By: | Geske, J.; Green, R.; Staffell, I. |
| Abstract: | The UK’s withdrawal from the European Union could mean that it leaves the EU Single Market for electricity (Elecxit). This paper develops methods to study the longer-term consequences of this electricity market disintegration, and in particular the end of market coupling. Before European electricity markets were coupled, different market closing times forced traders to commit to cross-border trading volumes based on anticipated market prices. Interconnector capacity was often under-used, and power sometimes flowed from high- to low-price areas. A model of these market frictions is developed, empirically verified on 2009 data (before market coupling) and applied to estimate the costs of market uncoupling in 2030. A less efficient market and the abandonment of some planned interconnectors would raise generation costs by €560m a year (1.5%) compared to remaining in the Single Electricity Market. Sixty percent (€300m) of these welfare losses occur in Great Britain. |
| Keywords: | Electricity Trading, Market Coupling, Brexit |
| JEL: | L94 F13 F15 |
| Date: | 2019–04–12 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1947&r=all |
| By: | Hauser, Philipp |
| Abstract: | Natural gas is the fossil fuel with lowest CO2-emissions, compared to coal, lignite or oil. Regarding the ongoing energy transition in Germany, the extend usage of natural gas provide advantages that might be built a bridge to a low carbon energy system until 2050. Against this backdrop, this paper introduces a model for the German natural gas market (GAMAMOD-DE) with focus on infrastructure utilisation. Following a linear optimization approach, the model considers a highly resolved grid structure of pipelines, storages and cross-border connections to neighbouring countries. The spatial and temporal resolved gas demand is divided into three different sectors: industry, heating and electricity. An application for the year 2012 shows the performance and validation of the proposed model. Results show the utilisation of infrastructure and enable an assessment of the level of security of supply during the considered time frame. In addition, the findings suggest that although European customers suffered on cold winter days in 2012, from a system part of view, the security of supply (SoS) was always ensured. Further research should focus on analysing SoS and resilience of gas networks in the mid- and long-term, especially when sector coupling between electricity and gas is far advanced. |
| Keywords: | Linear problem optimization,gas grid Germany,sectoral, temporal, and spatial resolved demand,energy security |
| JEL: | D61 L95 Q32 Q41 Q54 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:197000&r=all |
| By: | Stavins, Robert N. (John F. Kennedy School of Government, Harvard University) |
| Abstract: | There is widespread agreement among economists--and a diverse set of other policy analysts--that at least in the long run, an economy-wide carbon pricing system will be an essential element of any national policy that can achieve meaningful reductions of CO2 emissions cost-effectively in the United States. There is less agreement, however, among economists and others in the policy community regarding the choice of specific carbon-pricing policy instrument, with some supporting carbon taxes and others favoring cap-and-trade mechanisms. This prompts two important questions. How do the two major approaches to carbon pricing compare on relevant dimensions, including but not limited to efficiency, cost-effectiveness, and distributional equity? And which of the two approaches is more likely to be adopted in the future in the United States? This paper addresses these questions by drawing on both normative and positive theories of policy instrument choice as they apply to U.S. climate change policy, and draws extensively on relevant empirical evidence. The paper concludes with a look at the path ahead, including an assessment of how the two carbon-pricing instruments can be made more politically acceptable. |
| JEL: | Q40 Q48 Q54 Q58 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp19-017&r=all |
| By: | Thomas Douenne (Paris School of Economics – Université Paris 1 Panthéon Sorbonne); Adrien Fabre (Paris School of Economics – Université Paris 1 Panthéon Sorbonne) |
| Abstract: | Using a new survey and National households' survey data, we investigate French perception over carbon taxation. We find that French people largely reject a tax and dividend policy where revenues of the tax would be redistributed uniformly. However, their perception about the properties of the tax are biased: people overestimate the negative impact on their purchasing power, wrongly think the scheme is regressive, and do not perceive it as environmentally effective. Our econometric analysis shows that correcting these three bias would suffice to generate majority acceptance. Yet, we find that people's beliefs are persistent and their revisions biased towards pessimism, so that only few can be convinced. |
| Keywords: | Climate Policy, Carbon tax, Bias, Beliefs Preferences |
| JEL: | D72 D91 H23 H31 Q58 |
| URL: | http://d.repec.org/n?u=RePEc:fae:wpaper:2019.10&r=all |
| By: | Küfeoğlu, S.; Özkuran, M. |
| Abstract: | After its introduction in 2008, increasing Bitcoin prices and a booming number of other cryptocurrencies lead to a growing discussion of how much energy is consumed during the production of these currencies. Being the most expensive and the most popular cryptocurrency, both the business world and the research community have started to question the energy intensity of bitcoin mining. This paper only focuses on computational power demand during the proof-of-work process rather than estimating the whole energy intensity of mining. We make use of 160 GB of bitcoin blockchain data to estimate the energy consumption and power demand of bitcoin mining. We considered the performance of 269 different hardware models (CPU, GPU, FPGA, and ASIC). For estimations, we defined two metrics, namely; minimum consumption and maximum consumption. The targeted time span for the analysis was from 3 January 2009 to 5 June 2018. We show that the historical peak of power consumption of bitcoin mining took place during the bi-weekly period commencing on 18 December 2017 with a demand of between 1.3 and 14.8 GW. This maximum demand figure was between the installed capacities of Finland (~16 GW) and Denmark (~14 GW). We also show that, during June 2018, energy consumption of bitcoin mining from difficulty recalculation was between 15.47 and 50.24 TWh per year. |
| Keywords: | bitcoin, mining, blockchain, energy, consumption |
| JEL: | Q47 |
| Date: | 2019–05–24 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1948&r=all |
| By: | Majid Hashemi (Department of Economics, Clemson University, Clemson, SC, USA); Glenn P. Jenkins (Department of Economics, Queen's University, Kingston, Canada and Eastern Mediterranean University, North Cyprus); Roop Jyoti (Vice-Chairman of Jyoti Group of Companies, Nepal); Aygul Ozbafli (Senior Financial Analyst, African Development Bank) |
| Abstract: | The unreliability of electricity supplies is a major cause of the high cost of manufacturing in developing countries. In this paper we propose a more accurate approach, the contribution method, to measure the cost imposed by power outages. We employ a rich, if not unique, set of data from the detailed operating accounts of three large manufacturing enterprises in Nepal. Estimating the true opportunity costs to the enterprises from lost production caused by power outages sheds light on the issue of cost measurement that is critical for the determination of the feasibility of mitigating measures. Furthermore, having such micro-based information on the value of lost load per kWh by firm or sector is critical for reducing the economic costs of planned outages by the electric utility. |
| Keywords: | Electricity, Reliability, Outages, Opportunity Costs, Industry. |
| JEL: | L94 Q41 Q48 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:qed:dpaper:4523&r=all |
| By: | Melanie Marten; Kurt van Dender |
| Abstract: | The paper collects comprehensive and detailed data on what 40 OECD and G20 economies do with the revenues from carbon taxes, emissions trading systems, and excise taxes on energy use. It notes that constraints – which can take the form of political commitments or legal earmarks – on revenue use differ between carbon taxes, emissions trading systems, and excise taxes. Constraints are less common for excise taxes, which also raise the most revenue. Carbon tax revenues are relatively often associated with environmental tax reforms, involving reductions in personal or corporate income taxes. Revenues from emissions trading systems are frequently directed towards green spending. The results may be relevant to the political economy of ambitious carbon pricing schemes in the sense that the political expedience of choices on revenue use may depend on the amount of revenue raised. |
| Keywords: | carbon pricing, climate change, effective carbon rates, environmental tax reform, external costs |
| JEL: | H21 H23 Q41 Q48 Q54 Q58 |
| Date: | 2019–06–05 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ctpaaa:43-en&r=all |
| By: | F. Fusillo; F. Quatraro; S. Usai |
| Abstract: | The literature on the determinants of green technologies (GTs) has already identified regulation as a key driver of environmental innovations. However, relatively little is known on how the regulatory framework affect the knowledge generation process. This paper contributes this literature by investigating the impact of collaboration networks and environmental regulation, and of their interaction, on the generation of green technologies. The empirical analysis is carried out on a newly constructed dataset of European firms over the period 2005-2012 and it is articulated in two steps. Firstly, we test the existence of a relationship between the environmental regulation, as measured by the OECD Environmental Policy Stringency index, and GTs, proxied by patent applications. We then employ a dynamic network analysis model to explore the dual role of GTs both as determinant of the collaboration network and as outcome of firm collaboration strategies. We find that, even though there exists a strong and positive relationship, the regulatory framework has not a direct effect on GTs but rather it stimulates firms to search for new qualified collaboration. Then, it is the nature and the structure of these collaborations that encourages firms to generate new green technological knowledge. |
| Keywords: | proximity;innovation networks;Green technologies;firms' strategies;environmental regulation;Dynamic Network Analysis |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:201907&r=all |
| By: | Kurt van Dender |
| Abstract: | This paper discusses the main external costs related to road transport and the design of taxes to manage them. It provides an overview of evolving tax practice in the European Union and the United States and identifies opportunities for better alignment of transport taxes with external costs. There is considerable scope for improving transport tax practice, notably by increasing the use of taxes based on road use. Distance charges offer great promise in delivering more efficient road transport. In heavily congested areas, targeted charges are a cost-effective way of reducing congestion. Fiscal objectives provide an impetus for change as improving vehicle fuel efficiency and fleet penetration of alternative fuel vehicles erode traditional tax bases, particularly those relating to fossil fuel use. A gradual shift from an energy-based approach towards distance-based transport taxes has the potential to establish a stable tax base in the road transport sector in the long run. |
| Keywords: | congestion, congestion charging, distance-charges, external costs, fuel taxes, pollution, road transport |
| JEL: | H23 Q58 R4 R41 R48 |
| Date: | 2019–06–05 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ctpaaa:44-en&r=all |
| By: | Guo, B.; Newbery, D.; Gissey, G. |
| Abstract: | Market coupling makes efficient use of interconnectors by ensuring lower-price markets import until prices are equated or interconnectors constrained. A carbon tax in one of the market can distort trade and reduce price convergence. This paper uses econometrics to investigate the impact of the British Carbon Price Support (CPS, an extra carbon tax) on GB’s cross-border electricity trading with France (through IFA) and the Netherlands (through BritNed). Over 2015-2018 the CPS led to GB importing 18 TWh more electricity, thereby reducing carbon tax revenue by e74.4 million. Congestion revenue increased by e252 million, half of which was transferred to foreign interconnector owners, and the unilateral CPS created e18 million of deadweight loss. About 60% (s.e.=12%) of the CPS was passed through to the GB day-ahead prices, with 9% of this having been passed through to France and 11% to the Netherlands. |
| Keywords: | Carbon tax, Interconnectors, Market Coupling, Cost-benefit analysis, MGARCH |
| JEL: | Q48 F14 D61 C13 |
| Date: | 2019–06–03 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1951&r=all |
| By: | Yakubu Abdul-Salam (Centre for Energy Economics Research and Policy, Heriot-Watt University) |
| Abstract: | The United Kingdom (UK) and the European Union (EU) engage in significant natural gas trade through the Internal Energy Market (IEM). As the UK exits from the EU however, it is likely to also exit from the IEM given the seemingly intractable positions of both parties. Exit of the UK from the IEM would likely cause an increase in natural gas trade costs between the two. The increased trade costs result from a number of channels including (1) loss in trade efficiency arising from loss of EU financing previously aimed at improving efficiencies in trade between the two; (2) loss in trade efficiency arising from loss in the sophistication of financial instruments that are linked to the UK’s membership of the EU and the IEM; (3) rising costs of doing business in the UK for many EU energy companies due to the effects of possible regulatory divergence between the UK and the EU; etc. We use a spatial equilibrium model to examine the trade flow, price and welfare implications of these cost effects on global natural gas trade, with a focus on the UK and the EU. We find that cost increases in the UK-EU natural gas trade links would result significant trade flow changes, with the UK and the EU reducing overall exports and increasing internal trade. As a result, there would be significant underutilisation of existing pipelines linking both parties. The Republic of Ireland would also form a significant number of new trade links to compensate for its reduction in imports from the UK. Total welfare losses in the UK and the EU are in the order of $479million and $602million respectively, which is equivalent to about 3.69% and 0.59% of the total value of natural gas trade for the respective parties in 2017. In the UK, the producer welfare loss is significantly higher, highlighting the vulnerability of the UK natural gas industry to cost increases in trade with the EU. |
| Keywords: | Brexit; Natural gas; Trade; Spatial equilibrium; Welfare |
| JEL: | F13 O24 P28 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:hwc:wpaper:008&r=all |
| By: | Rabah Guettaf (GRMNT,Mouloud Mammeri University of Tizi-Ouzou, Algeria - University of Tizi-Ouzou); Felix Mora-Camino (ENAC - Ecole Nationale de l'Aviation Civile) |
| Abstract: | This article addresses the problem of air traffic service (ATS) pricing over a domestic air transportation system with either private or public ATS providers. In both cases, to take into account feedback effects on the air transportation market, it is considered that the adopted pricing approaches can be formulated through optimization problems where an imbedded optimization problem is concerned with the supply of air transportation (offered seat capacity and tariffs for each connection). Under mild assumptions in both situations the whole problem can be reformulated as a mathematical program with linear objective function and quadratic constraints. A numerical application is performed to compare both pricing schemes when different levels of taxes are applied to air carriers and passengers |
| Keywords: | Pricing,Air traffic services,Quadratic optimization,Flows optimization in networks |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02138628&r=all |
| By: | Evgeniy M. Ozhegov; Alina Ozhegova |
| Abstract: | This paper describes the results of research project on optimal pricing for LLC "Perm Local Rail Company". In this study we propose a regression tree based approach for estimation of demand function for local rail tickets considering high degree of demand heterogeneity by various trip directions and the goals of travel. Employing detailed data on ticket sales for 5 years we estimate the parameters of demand function and reveal the significant variation in price elasticity of demand. While in average the demand is elastic by price, near a quarter of trips is characterized by weakly elastic demand. Lower elasticity of demand is correlated with lower degree of competition with other transport and inflexible frequency of travel. |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1905.12859&r=all |