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on Regulation |
| By: | Falbo, Paolo; Pelizzari, Cristian; Taschini, Luca |
| Abstract: | We investigate the combined effect of an Emissions Trading System (ETS) and renewable energy sources on electricity generation investments in energy-only markets. We study the long-term capacity expansion decision in fossil fuel and renewable technologies when electricity demand is uncertain. We model a relevant tradeoff: a higher share of renewable production can be priced at the higher marginal cost of fossil fuel production, yet the likelihood of achieving higher profits is reduced because more electricity demand is met by cheaper renewable production. We illustrate our theoretical results comparing the optimal solutions under business-as-usual and various ETSs and renewables scenarios. This illustration shows under which limiting market settings a monopolist prefers withholding investments in renewable energy sources, highlighting the potential distortionary effect introduced via the ETS. Our conclusions remain unaltered under varying key modelling assumptions. |
| Keywords: | Emissions Trading System; energy-mix; pass-Through; electricity Markets; electricity Sector; ES/R009708/1 |
| JEL: | R14 J01 L81 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:101704&r=all |
| By: | Jaffe, Amy M.; Dominguez-Faus, Rosa; Lee, Allen; Medlock, Kenneth; Parker, Nathan; Scheitrum, Daniel; Burke, Andrew; Zhou, Hengbing; Fan, Yueyue |
| Abstract: | The recent emergence of natural gas as an abundant, inexpensive fuel in the United States could prompt a momentous shift in the level of natural gas utilized in the transportation sector. The cost advantage of natural gas vis-à-vis diesel fuel is particularly appealing for vehicles with a high intensity of travel and thus fuel use. Natural gas is already a popular fuel for municipal and fleet vehicles such as transit buses and taxis. In this paper, we investigate the possibility that natural gas could be utilized to provide fuel cost savings, geographic supply diversity and environmental benefits for the heavy-duty trucking sector and whether it can enable a transition to lower carbon transport fuels. We find that a small, cost-effective intervention in markets could support a transition to a commercially sustainable natural gas heavyduty fueling system in the state of California and that this could also advance some of the state’s air quality goals. Our research shows that an initial advanced natural gas fueling system in California could facilitate the expansion to other U.S. states. Such a network would enable a faster transition to renewable natural gas or biogas and waste-to-energy pathways. Stricter efficiency standards for natural gas Class 8 trucks and regulation of methane leakage along the natural gas supply chain would be necessary for natural gas to contribute substantially to California’s climate goals as a trucking fuel. To date, industry has favored less expensive technologies that do not offer the highest level of environmental performance. |
| Keywords: | Engineering |
| Date: | 2019–10–14 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsdav:qt6663v5jc&r=all |
| By: | Bruninx, Kenneth; Ovaere, Marten; Gillingham, Kenneth; Delarue, Erik |
| Abstract: | With the Phase 4 cancellation provision, the cumulative emissions cap of the EU ETS has become dependent on the amount of surplus allowances and future emissions abatement costs. In this paper, we discuss how the design of the market stability reserve greatly increases uncertainty over cumulative emissions and implies that there will be more cancellation when future abatement is more costly, making the policy more stringent when the cost of compliance is higher. Moreover, we illustrate how overlapping policies may lead to paradoxical effects on cumulative emissions. |
| Keywords: | European Emission Trading System, Market Stability Reserve, Cancellation, Waterbed, Marginal Abatement Cost |
| JEL: | L5 L6 L94 L98 Q4 Q5 Q52 Q54 Q58 |
| Date: | 2019–10–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:96437&r=all |
| By: | Ogden, Joan M. |
| Abstract: | Hydrogen is a high quality energy carrier that could be produced at global scale, via thermochemical processing of hydrocarbons, such as natural gas, coal or biomass, or water electrolysis using any source of electricity including renewables, such as wind or solar, or nuclear power. Hydrogen is receiving renewed attention driven by growing concerns about climate change, air quality and integration of variable renewable energy into the energy system. Recent energy/economic studies suggest that hydrogen and fuel cells could be important technologies for simultaneously addressing these challenges in a future renewable-intensive, low carbon energy system. In this paper, we review the technical and economic status of hydrogen and fuel cell technologies, progress toward commercialization, and the role of policy. We discuss timing, barriers, costs and benefits of a hydrogen transition, focusing on vehicle and energy storage applications. Finally, we suggest guidelines for future policies guiding a hydrogen transition. |
| Keywords: | Engineering |
| Date: | 2018–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsdav:qt52s28641&r=all |
| By: | Zhongxiang Zhang |
| Abstract: | China has determined to assign the market a decisive role in allocating resources. To that end, getting energy prices right is crucial because this sends clear signals to both producers and consumers of energy. While the overall trend of China’s energy pricing reform since 1984 has been moving away from the prices set by the central government in the centrally planned economy and towards a more market-oriented pricing mechanism, the pace and scale of the reform differ across energy types. This article discusses the evolution of price reforms for coal, petroleum products, natural gas, electricity and renewable power in China, and provides some analysis of these energy price reforms, in order to allow the market to play a decisive role in resource allocation and help China’s transition to a low-carbon economy. |
| JEL: | H23 H71 O13 O53 P22 Q41 Q43 Q48 Q53 Q58 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:1805&r=all |
| By: | Reyer Gerlagh; Roweno J.R.K. Heijmans; Knut Einar Rosendahl |
| Abstract: | For any emission trading system (ETS) with quantity-based endogenous supply of allowances, there exists a negative demand shock, e.g. induced by abatement policy, that increases aggregate supply and thus cumulative emissions. We prove this green paradox for a general model and then apply it to the details of EU ETS. In 2018, new rules for a Market Stability Reserve (MSR) were agreed on and implemented. We show that abatement policies announced in early periods but realized in the future, are inverted by the new rules and increase cumulative emissions. We provide quantitative evidence of our result for a model disciplined on the price rise in the EU ETS that followed the introduction of the MSR. |
| Keywords: | emissions trading, green paradox, EU ETS, environmental policy, dynamic modeling |
| JEL: | D59 E61 H23 Q50 Q54 Q58 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7862&r=all |
| By: | Barry Ehinomen Ebhojie (O'Khona General Dealers and Projects) |
| Abstract: | Worldwide, more than one third of energy is used in buildings which account for about 15% of the total greenhouse gas that is emitted globally. Buildings in cities can account to about 80% for carbon monoxide emitted. Therefore, the built environment is a very critical part of the climate change mitigation. Evaluated in this research are energy efficiency measures that can be implemented through regulations and controls. From administered questionnaires, the issues of energy efficiency have become an imperative principle in the building sector and the way it is managed in South Africa. Based on the analysis provided, energy efficient behaviour is the predominant factor that influences energy consumption. According to the PCA results, seven variables (Age of building, number of bedrooms, roofing materials, energy for cooking and heating, window style and brick and concrete wall) were all dominant variables and these variables remain significant after implementing multiple regression models to estimate energy cost. |
| Keywords: | Buildings; Energy Efficiency; Greenhouse gas; PCA |
| JEL: | D10 A13 C83 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:9812036&r=all |
| By: | May, Nils G.; Neuhoff, Karsten; Richstein, Jörn |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esrepo:204599&r=all |
| By: | Nomsa Phindile Nkosi; Johane Dikgang |
| Abstract: | Excessive use of fossil fuels is widely acknowledged as one of the main causes of climate change. The energy sector is one of the sectors that make use of fossil fuels. Greenhouse gasses are released during the combustion of fossil fuels, such as coal, oil, and natural gas, to produce electricity. Generating electricity from nuclear reduces pollution externalities hence it is argued by some to be part of a sustainable solution to achieving low-carbon energy options. This option According to Ertor-Akyazi et al. (2012) since energy security is a critical element in an economy, nuclear energy can play a role in ensuring smooth supply of electricity; it is reliable, and can provide electricity on a larger scale, similar to fossil fuels. |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:725&r=all |
| By: | Maria Polyakova; Stephen P. Ryan |
| Abstract: | In-kind public transfers are commonly targeted based on observable characteristics of potential recipients. This paper argues that when the subsidized good is provided by imperfectly-competitive firms, targeting can give rise to a “demographic externality,” creating unintended redistribution of surplus and distorting efficiency. We illustrate this mechanism empirically in the context of means-tested subsidies for privately-provided health insurance plans under the Affordable Care Act (ACA). Using a structural model of supply and demand, we show that market power increases the welfare loss from subsidy targeting, vis-a-vis income-invariant subsidies, by 33 percent. |
| JEL: | H0 H2 H20 H21 H22 H23 H31 H41 H5 H51 I1 I10 I11 I13 I18 I38 L0 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26367&r=all |
| By: | Cristian Huse; Claudio Lucinda; Andre Ribeiro |
| Abstract: | We examine the effects on the valuation of energy efficiency of PERCEE, the largest temporary electricity savings program worldwide. Using data from a representative sample of Brazilian households, we estimate a structural model of appliance choice accounting for heterogeneity in prices and operating costs. We document that it is only through incentives introduced by the PERCEE program that one cannot reject the null of correct valuation of energy costs against the two-sided alternative. Moreover, once PERCEE ends, households essentially revert to pre-program valuations, suggesting the lack of long-run effects of the program. Despite increases in the valuation of energy costs, the heterogeneous responses imply that monetary savings and the social benefit of carbon savings are concentrated among few consumers. Finally, we exploit PERCEE's design to decompose the energy efficiency gap into incentives and information components to find that the former is about twice as large as the latter. |
| Keywords: | energy efficiency, energy paradox, energy efficiency gap, information label, electricity demand, energy demand, mixed logit, household appliance |
| JEL: | D12 D83 L15 L68 Q48 |
| Date: | 2019–10–08 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2019wpecon39&r=all |
| By: | Böhringer, Christoph (University of Oldenburg); Rosendahl, Knut Einar (School of Economics and Business, Norwegian University of Life Sciences); Briseid Storrøsten, Halvor (Statistics Norway) |
| Abstract: | Policy makers in the EU and elsewhere are concerned that unilateral carbon pricing induces carbon leakage through relocation of emission-intensive and trade-exposed industries to other regions. A common measure to mitigate such leakage is to combine an emission trading system (ETS) with output-based allocation (OBA) of allowances to exposed industries. We first show analytically that in a situation with an ETS combined with OBA, it is optimal to impose a consumption tax on the goods that are entitled to OBA, where the tax is equivalent in value to the OBA-rate. Then, using a multi-region, multi-sector computable general equilibrium (CGE) model calibrated to empirical data, we quantify the welfare gains for the EU to impose such a consumption tax on top of its existing ETS with OBA. We run Monte Carlo simulations to account for uncertain leakage exposure of goods entitled to OBA. The consumption tax increases welfare whether the goods are highly exposed to leakage or not. Thus, policy makers in regions with OBA can only gain by introducing the consumption tax. It can hence be regarded as smart hedging against carbon leakage. |
| Keywords: | Carbon leakage; output-based allocation; consumption tax |
| JEL: | D61 F18 H23 Q54 |
| Date: | 2019–10–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nlsseb:2019_004&r=all |
| By: | Vincenzo Atella (CEIS & DEF University of Rome "Tor Vergata"); Francesco Decarolis (Bocconi University, Economics Department) |
| Abstract: | The public procurement of medical devices is increasingly relying on auction mechanisms to move toward more transparent procedures and to promote competition between suppliers in a market where the quality of the products matters enormously and an improper auction design could be very harmful. Based on Italian hospital data, we present new evidence on the performance of the public tenders to procure orthopaedic prosthesis for hips, knees and shoulders. Focusing on three main outcomes, the number of participants, the presence of a single firm bidding and the winning rebate, for the first time we describe how features related to the tender, hospital, region and bidders' competition all contribute to explain the functioning of the procurement auctions. The evidence we obtain can meaningfully help policy makers in designing and implementing better public procurement systems. |
| Keywords: | procurement auctions, medical devices, orthopaedic prosthesis, tender characteristics, Italy. |
| JEL: | I18 J18 C21 |
| Date: | 2019–10–10 |
| URL: | http://d.repec.org/n?u=RePEc:rtv:ceisrp:472&r=all |
| By: | Hardman, Scott; Tal, Gil |
| Abstract: | Car buyers in California have the choice of several types of alternative fuel vehicles (AFVs) including battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs), and fuel cell vehicles (FCVs). FCVs offer a different ownership proposition compared to BEVs, mostly relating to their refueling style. This policy brief summarizing findings from the study which investigated FCV buyers in California and compared them to BEV owners. The hope is to understand why some households choose a FCV rather than a BEV. View the NCST Project Webpage |
| Keywords: | Social and Behavioral Sciences, Fuel cell vehicle, battery electric vehicle, electric vehicle |
| Date: | 2019–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsdav:qt8228z124&r=all |
| By: | Guriev, Sergei; Melnikov, Nikita; Zhuravskaya, Ekaterina |
| Abstract: | How does the internet affect government approval? Using surveys of 840,537 individuals from 2,232 subnational regions in 116 countries in 2008-2017 from the Gallup World Poll and the global expansion of 3G networks, we show that an increase in internet access reduces government approval and increases the perception of corruption in government. This effect is present only when the internet is not censored and is stronger when traditional media is censored. Actual incidents of corruption translate into higher corruption perception only in places covered by 3G. In Europe, the expansion of mobile internet increased vote shares of anti-establishment populist parties. |
| Keywords: | 3G; Corruption; Government approval; internet; Mobile; populism |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14022&r=all |
| By: | Jenn, Alan; Hardman, Scott; Lee, Jae Hyun; Tal, Gil |
| Keywords: | Social and Behavioral Sciences |
| Date: | 2019–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsdav:qt01s8k5gt&r=all |
| By: | Billio, Monica; Costola, Michele; Pelizzon, Loriana; Riedel, Max |
| Abstract: | In this paper, we investigate the relation between buildings' energy efficiency and the probability of mortgage default. To this end, we construct a novel panel dataset by combining Dutch loan-level mortgage information with provisional building energy ratings that are calculated by the Netherlands Enterprise Agency. By employing the Logistic regression and the extended Cox model, we find that buildings' energy efficiency is associated with lower likelihood of mortgage default. The results hold for a battery of robustness checks. Additional findings indicate that credit risk varies with the degree of energy efficiency. |
| Keywords: | Mortgages,Energy Efficiency,Credit Risk |
| JEL: | G21 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:safewp:261&r=all |