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on Regulation |
| By: | Marion Leroutier (Paris School of Economics (PSE), Université Paris I-Panthéon-Sorbonne, Centre International de Recherche pour l'Environnement et le Développement (CIRED)) |
| Abstract: | The electricity and heat generation sector represents about 40 % of global greenhouse gas (GHG) emissions in 2016. Policy-makers have implemented a variety of instruments to decarbonise their power sector. This paper examines the UK Carbon Price Floor (CPF), a novel carbon pricing instrument implemented in the United Kingdom in 2013. After describing the potential mechanisms behind the recent UK power sector decarbonisation, I apply the synthetic control method on country-level data to estimate the impact of the CPF on per capita emissions. I discuss the importance of potential confounders and the amount of net electricity imports imputable to the policy. Depending on the specification, the abatement associated with the introduction of the CPF range from 106 to 185 millions tons of equivalent CO2 over the 2013-2017 period. This implies a reduction of between 41% and 49% of total power sector emissions by 2017. Several placebo tests suggest that these estimates capture a causal impact. This paper shows that a carbon levy on high-emitting inputs used for electricity generation can lead to successful decarbonisation. |
| Keywords: | carbon tax, electricity generation, synthetic control method |
| JEL: | D22 H23 Q41 Q48 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:fae:ppaper:2019.03&r=all |
| By: | Behrang Shirizadeh (CIRED); Quentin Perrier (CIRED, I4CE); Philippe Quirion (CIRED, CNRS) |
| Abstract: | Many studies have demonstrated the feasibility of fully renewable power systems in various countries and regions. Yet the future costs of key technologies are highly uncertain and little is known about the robustness of a renewable power system to these uncertainties. We build 315 long-term cost scenarios on the basis of recent prospective studies, varying the costs of key technologies. We model the optimal renewable power system for France over 18 meteorological years, simultaneously optimizing investment and dispatch. Our results show that the optimal energy mix is highly sensitive to cost assumptions: the installed capacity in PV, onshore wind and power-to-gas varies by a factor of 5, batteries and offshore wind even more. Nevertheless, we have a robust result showing that the cost of a 100% renewable power system will not be higher than today. Finally, we show that the cost of not installing the absolutely ‘optimal’ mix is limited. Contrary to current estimates of increasing integration costs, this indicates that renewable technologies will become by and large substitutable. |
| Keywords: | Power system modelling, Variable renewables, Electricity storage, Robust decision making |
| JEL: | Q42 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:fae:ppaper:2019.04&r=all |
| By: | Karen Turner; Gioele Figus; Kim Swales; L. (Lisa B.) Ryan; et al. |
| Abstract: | Technological change is necessary for economies to grow and develop. This paper investigates how this technological change could be directed in order to simultaneously reduce carbon-intensive energy use and deliver a range of economic benefits. Using both partial and general equilibrium modelling, we consider improvements in the efficiency in the delivery of electricity as an increasingly low carbon option in the UK. We demonstrate how linking this to policy action to assist and encourage households to substitute away from more carbon-intensive gas- to electricity-powered heating systems may change the composition of energy use, and implied emissions intensity, but not the level of the resulting economic expansion. |
| Keywords: | Technological change; CGE models; Multiple benefits; Rebound |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:oapubs:10197/10840&r=all |
| By: | Aris Christodoulou (European Commission - JRC); Panayotis Christidis (European Commission – JRC) |
| Abstract: | The report provides a set of indicators and tools that allow policy makers to measure accessibility and connectivity of border regions in Europe at both national and international levels. The methodology can be used to identify areas where transport infrastructure may be lacking and prioritize potential investments based on specific policy relevant criteria. The approach uses very detailed spatially disaggregate data covering EU28 plus Norway and Switzerland at grid level (1km by 1km), as well as the complete road network. This level of resolution allows many of the specificities of the areas covered to be taken into account. |
| Keywords: | accessibility, road transport, border regions, network efficiency |
| JEL: | R00 R40 O18 L91 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc113364&r=all |
| By: | Zhenqian Huang (Macroeconomic Policy and Financing for Development Division, ESCAP) |
| Abstract: | The Asia Pacific region, hosting five of ten most vulnerable countries to climate change, contributes to over half of the world’s total greenhouse gas (GHG). During 1990 and 2012, greenhouse gas emissions in the region doubled (figure 1). Climate-induced higher temperatures, sea level rise, and extreme weather events are having a major impact on the region, harming its economies, natural and physical assets, and compounding developmental challenges, including poverty, food and energy security and health. Without climate-oriented development, climate change could push more than 100 million people from the region into extreme poverty by 2030, wiping out poverty reduction gains of past decades (ESCAP, 2016). |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:unt:pbmpdd:pb91&r=all |
| By: | Andrey Rogalev (MPEI - Moscow Power Engineering Institute); Ivan Komarov (MPEI - Moscow Power Engineering Institute); Vladimir Kindra (MPEI - Moscow Power Engineering Institute); Olga Zlyvko (MPEI - Moscow Power Engineering Institute) |
| Abstract: | This paper provides a comparative entrepreneurial analysis of modern combined-cycle power generation technologies and future-oriented high-efficiency oxy-fuel combustion cycles with zero emissions. Considering the main criteria for sustainable development, we identify the generation technology that provides the lowest cost of electricity supply and the maximum economic efficiency of investments with equally high environmental indicators. Based on a comprehensive literature review and comparison of the technical and economic parameters of modern and forward-looking generation technologies under different economic conditions, the paper develops and presents the path of increasing the technical level of generation technologies, corresponding to the conditions of sustainable development at each moment of time. Furthermore, the paper analyses the technical and economic characteristics of the combined-cycle technology successfully applied in the world's energy systems and advanced oxy-fuel combustion cycles. In addition, the paper proposes a multifactorial economic-mathematical model that allows to evaluate the performance indicators of any of the considered technologies in accordance with the criteria for sustainable development. |
| Keywords: | sustainable development,power industry,greenhouse gas,power generation,economic efficiency,investment |
| Date: | 2018–09–30 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02168626&r=all |
| By: | Jasper Meya (University of Oldenburg, Germany); Paul Neetzow (Humboldt-Universität zu Berlin, Germany) |
| Abstract: | Renewable energy (RE) policies are widely used to decarbonize power generation and implemented at various governance levels. We use an analytically tractable two-level model to study the eects of overlapping RE policies from the federal and state governments. We find that there are contrasting incentives for states to support RE deployment, depending on whether the federal government implements a feed-in tari (FIT) or an auction system. Under federal FIT, states that bear a greater burden in nancing the federal policy under-subsidize RE in order to reduce nationwide RE deployment and thereby lower their costs. Under federal auction, states that bear a greater burden to nance federal policy oversubsidize RE to drive down the quota price, and thereby also their costs. In an application to Germany, we illustrate that the recent shift from FIT to auctions increases incentives for state governments to support RE in the demand-intensive south, while decreasing them in the wind-abundant north. |
| Keywords: | auction, feed-in tariff, multi-level governance, fiscal federalism, overlapping regulation, energy transition |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:old:dpaper:423&r=all |
| By: | Salvador Bertomeu; Antonio Estache |
| Abstract: | This paper synthesizes the theoretical insights and the empirical evidence on the various dimensions that drive and/or should drive the dividend pay-out decisions of regulated firms if the interests of all stakeholders are to be accounted for. It then explains why, from a regulator’s perspective concerned with the fair treatment of investors as well as current and future consumers, most of the academic insights have been, so far, insufficient to guide, in practice, the assessments of dividend policies adopted by regulated companies. The survey concludes with a potential research agenda to help close the knowledge gaps |
| Keywords: | Regulation, Dividends, Utilities, Transport, Infrastructure |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:eca:wpaper:2013/289916&r=all |
| By: | Jeitschko, Thomas D.; Withers, John A. |
| Abstract: | Regulators and the firms they regulate interact repeatedly. Over the course of these interactions, the regulator collects data that contains information about the firm's idiosyncratic private characteristics. This paper studies the case in which the regulator uses information gleaned from past cost observations when designing the current period's contract. Cost observations are obscured in stochastic settings and so perfect inferences about underlying private information are not possible. However, the design of the regulatory contract affects how much information is gleaned. When learning more about the firm's type, the regulator increases expected second period welfare by reducing distortions tied to asymmetric information. In contrast, by learning less about the firm's type, the regulator reduces incentive payments in first period. The trade-off between the desire to be more informed and to reduce incentive payments leads to a contracting dynamic that aligns with anecdotal, experimental and empirical evidence of the ratchet effect. |
| Keywords: | Dynamic Contracts,Dynamic Agency,Ratchet Effect,Experimentation,Signal Dampening,Regulation |
| JEL: | D8 C73 L5 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:318&r=all |
| By: | Juan Jose Cortez (GAEL - Laboratoire d'Economie Appliquée de Grenoble - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - INRA - Institut National de la Recherche Agronomique - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes); A. Bidaud (LPSC - Laboratoire de Physique Subatomique et de Cosmologie - UJF - Université Joseph Fourier - Grenoble 1 - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - IN2P3 - Institut National de Physique Nucléaire et de Physique des Particules du CNRS - Institut Polytechnique de Grenoble - Grenoble Institute of Technology - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes); Silvana Mima (GAEL - Laboratoire d'Economie Appliquée de Grenoble - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - INRA - Institut National de la Recherche Agronomique - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes); Gabin Mantulet (GAEL - Laboratoire d'Economie Appliquée de Grenoble - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - INRA - Institut National de la Recherche Agronomique - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes, LPSC - Laboratoire de Physique Subatomique et de Cosmologie - UJF - Université Joseph Fourier - Grenoble 1 - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - IN2P3 - Institut National de Physique Nucléaire et de Physique des Particules du CNRS - Institut Polytechnique de Grenoble - Grenoble Institute of Technology - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes); Elena Stolyarova (LPSC - Laboratoire de Physique Subatomique et de Cosmologie - UJF - Université Joseph Fourier - Grenoble 1 - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - IN2P3 - Institut National de Physique Nucléaire et de Physique des Particules du CNRS - Institut Polytechnique de Grenoble - Grenoble Institute of Technology - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes) |
| Abstract: | Renewable energy sources are expected to take a very large share of electricity production in 2 degrees scenarios. The main objective of the study is to analyze the use of the demand response (DR) in high variable renewable depending electric power systems and explore the potential advantages of using DR to compensate intermittency. We also considered the interactions of DR with the entire power system, including the other flexibility options (storage, electric grid, and dispastchable power plants) using European Unit Commitment And Dispatch (EUCAD) model. In the supply and demand balance modelling, DR is similar to electricity storage: they both displace an electric load between two time-periods, although their technical operating constraints differ which makes their economic models and behaviours slightly different. We perform studies with very different renewable shares which are expected to be representative of different time horizons, today, in 2030 and 2060, years. We found that the need for implicit DR grows up to 20 % of the peak load but might have a value after which its use is saturated. Surprisingly, the competition with storage capacities appear to be very limited. Regarding to explicit DR, the level of usage is more sensible to the price when the high VRE claims for more flexibility. |
| Keywords: | Demand Response,Flexible electricity demands,Demand side management |
| Date: | 2019–05–29 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02150581&r=all |
| By: | Lucas W. Davis; James M. Sallee |
| Abstract: | In many countries the revenue from gasoline taxes is used to fund highways and other transportation infrastructure. As the number of electric vehicles on the road increases, this raises questions about the effectiveness and equity of this financing mechanism. In this paper, we ask whether electric vehicle drivers should pay a mileage tax. Though the gasoline tax has been traditionally viewed as a benefits tax, we take instead the perspective of economic efficiency. We derive a condition for the optimal electric vehicle mileage tax that highlights a key trade-off. On the one hand, there are externalities from driving including traffic congestion and accidents that imply a mileage tax is efficient. On the other hand, gasoline tends to be underpriced, so a low (or even negative) mileage tax might be justified to encourage substitution away from gasoline-powered vehicles. We then turn to an empirical analysis aimed at better understanding the current policy landscape for electric vehicles in the United States. Using newly available nationally-representative microdata we calculate that electric vehicles have reduced gasoline tax revenues by $250 million annually. We show that the foregone tax revenue is highly concentrated in a handful of states and is highly regressive, as most electric vehicles are driven by high-income households, and we discuss how this motivates and informs optimal policy. |
| JEL: | D12 L62 Q41 Q54 Q55 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26072&r=all |
| By: | Wouter Zant (Vrije Universiteit Amsterdam) |
| Abstract: | We investigate to what extent the roll-out of the mobile phone network in Mozambique reduced transport costs and search costs, and thereby decreased spatial price dispersion and improved market efficiency. Estimations are based on data of transport costs of maize grain and maize market prices. The mobile phone rollout explains a 10%-13% reduction in maize price dispersion. Around half of this reduction is associated with search costs related to transport, the other half with other search costs, for example for the collection of maize in source markets. Search costs are substantial and also a substantial component of total transport costs. Benefits of increased market efficiency are biased towards consumer markets. Results are robust for non-random rollout of the mobile phone network and several other threats. |
| Keywords: | search costs, transport costs, mobile phones, agricultural markets, maize prices, Mozambique, sub-Sahara Africa |
| JEL: | Q13 O13 O33 Q11 |
| Date: | 2019–07–13 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20190047&r=all |
| By: | ITF |
| Abstract: | This report explores the impacts that the introduction of higher capacity vehicles has on road freight transport markets, modal shift, infrastructure and safety. It investigates how appropriate regulation together with ITS measures could be applied for relaxing the weight and dimension restrictions and allowing the use of these vehicles in specific geographical areas or on specific routes. |
| Date: | 2019–05–02 |
| URL: | http://d.repec.org/n?u=RePEc:oec:itfaac:69-en&r=all |
| By: | García-Alaminos, Ángela; Rubio, Santiago J. |
| Abstract: | The paper studies the use of emission taxes and feed-in subsidies for the regulation of a monopoly that can produce the same good with a technology that employs a polluting input and a clean technology. The second-best tax and subsidy are calculated solving a two-stage policy game between the regulator and the monopoly with the regulator acting as the leader of the game. We find that the second-best tax rate is the Pigouvian tax. The tax implements the efficient level of the dirty output but does not affect the total output. On the other hand, the subsidy leads to the monopoly to reduce the dirty output but also to increase the total output. This increase in total output may yield a larger net social welfare when the subsidy is used provided that the marginal cost of clean output is not very high, as a linear-quadratic specification of the model confirms. Finally, it is showed that the combination of an emission tax with a feed-in subsidy induces the firm to choose the efficient outputs, but in this case the first-best tax must be lower than the Pigouvian tax. Thus, the findings of this paper support the idea that feed-in subsidies open the possibility for improving the regulation of a polluting firm with market power. |
| Keywords: | Research Methods/ Statistical Methods |
| Date: | 2019–07–18 |
| URL: | http://d.repec.org/n?u=RePEc:ags:feemec:291524&r=all |