nep-reg New Economics Papers
on Regulation
Issue of 2020‒01‒06
ten papers chosen by
Natalia Fabra
Universidad Carlos III de Madrid

  1. Alternative-Fuel-Vehicle Policy Interactions Increase U.S. Greenhouse Gas Emissions By Jenn, Alan; Azevedo, Inês; Michalek, Jeremy Joseph
  2. China's Unconventional Nationwide CO 2 Emissions Trading System: The Wide-Ranging Impacts of an Implicit Output Subsidy By Lawrence H. Goulder; Xianling Long; Jieyi Lu; Richard D. Morgenstern
  3. Using Machine Learning to Target Treatment: The Case of Household Energy Use By Christopher R. Knittel; Samuel Stolper
  4. An assessment of the social costs and benefits of vehicle tax reform in Ireland By Lisa Ryan; Ivan Petrov; Andrew Kelly; Yulu Guo; Sarah La Monaca
  5. Prices versus Auctions in Large Markets By Zhang, Hanzhe
  6. The role of biomass gasification and methanisation in the decarbonisation strategies By Gabin Mantulet; Adrien Bidaud; Silvana Mima
  7. Does Household Electrification Supercharge Economic Development? By Kenneth Lee; Edward Miguel; Catherine Wolfram
  8. A Participatory Stakeholder Process for Evaluating Sustainable Energy Transition Scenarios By Höfer, Tim; Madlener, Reinhard
  9. Urban Air Mobility Market Study By Reiche, Colleen PhD; Goyal, Rohit; Cohen, Adam; Serrao, Jacqueline; Kimmel, Shawn PhD; Fernando, Chris; Shaheen, Susan PhD
  10. Ride-hailing platforms are shaping the future of mobility, but for whom? By Young, Mischa; Farber, Steven

  1. By: Jenn, Alan; Azevedo, Inês; Michalek, Jeremy Joseph
    Abstract: The transportation sector is currently the largest contributor of greenhouse gas (GHG) emissions in the United States, and light-duty vehicles produce the majority of transportation emissions. Federal standards for fleet-averaged vehicle GHG emission rates and their corresponding corporate average fuel economy standards cap GHG emissions of the US light-duty vehicle fleet. In addition, two key policies aim to encourage a future fleet transition to alternative fuel vehicle (AFV) technologies: (1) incentives that treat AFVs favorably in the federal GHG standard, and (2) state zero-emission vehicle (ZEV) policy, which mandates AFV sales in some states. While each of these AFV policies can encourage AFV adoption, we show that net GHG emissions increase when both policies are present simultaneously. Specifically, we estimate changes in life cycle GHG emissions and gasoline consumption, relative to a pure federal fleet GHG standard (without AFV incentives or mandates), resulting from the introduction of (1) AFV incentives in federal fleet GHG policy, (2) state ZEV mandates, and (3) the combination of the two. We find that under fairly general conditions the combined AFV policies produce higher GHG emissions than either policy alone. This result is a consequence of state mandates increasing AFV sales in the presence of federal incentives that relax the fleet GHG standard when AFVs are sold. Using AFV sales projections from the Energy Information Administration and the California Air Resources Board, we estimate that the combined policies produce an increase on the order of 100 million tons of CO2 emissions cumulatively for new passenger cars sold from 2012 through 2025 relative to a pure GHG standard. AFV incentives in the GHG standard conflate policy goals by encouraging AFV adoption at the cost of higher fleet GHG emissions, and they permit even higher fleet GHG emissions when other policies, such as the ZEV mandate, increase AFV adoption.
    Date: 2019–06–01
  2. By: Lawrence H. Goulder; Xianling Long; Jieyi Lu; Richard D. Morgenstern
    Abstract: China is planning to implement the largest CO 2 emissions trading system in the world. To reduce emissions, the system will be a tradable performance standard (TPS), an emissions pricing mechanism that differs significantly from the emissions pricing instruments used in other countries, such as cap and trade (C&T) and a carbon tax. We employ matching analytically and numerically solved models to assess the cost-effectiveness and distributional impacts of China’s forthcoming TPS for achieving CO 2 emissions reductions from the power sector. We find that the TPS’s implicit subsidy to electricity output has wide-ranging consequences for both cost-effectiveness and distribution. In terms of cost-effectiveness, the subsidy disadvantages the TPS relative to C&T by causing power plants to make less efficient use of output-reduction as a way of reducing emissions (indeed, it induces some generators to increase output) and by limiting the cost-reducing potential of allowance trading. In our central case simulations, TPS’s overall costs are about 47 percent higher than under C&T. At the same time, the TPS has distribution-related attractions. Through the use of multiple benchmarks (maximal emission-output ratios consistent with compliance), it can serve distributional objectives. And because it yields smaller increases in electricity prices than a comparable C&T system, it implies less international emissions leakage.
    JEL: H23 Q43 Q48 Q5 Q54
    Date: 2019–12
  3. By: Christopher R. Knittel; Samuel Stolper
    Abstract: We use causal forests to evaluate the heterogeneous treatment effects (TEs) of repeated behavioral nudges towards household energy conservation. The average response is a monthly electricity reduction of 9 kilowatt-hours (kWh), but the full distribution of responses ranges from -30 to +10 kWh. Selective targeting of treatment using the forest raises social net benefits by 12-120 percent, depending on the year and welfare function. Pre-treatment consumption and home value are the strongest predictors of treatment effect. We find suggestive evidence of a "boomerang effect": households with lower consumption than similar neighbors are the ones with positive TE estimates.
    JEL: C53 D90 Q40
    Date: 2019–12
  4. By: Lisa Ryan (University College, Dublin); Ivan Petrov (University College, Dublin); Andrew Kelly (EnvEcon Decision Support); Yulu Guo (University College, Dublin); Sarah La Monaca (Columbia University)
    Abstract: This paper presents the results of an ex post evaluation of the impacts of a vehicle tax reform in Ireland, by carrying out a full social cost benefit analysis of a vehicle tax reform that began in Ireland in 2008 and shows that whilst successful in improving the fuel economy of new passenger cars, it may also have caused unintended effects, such as an increased proliferation of diesel vehicles in the passenger car fleet. These outcomes have mitigated the overall benefits. In addition to quantifying the scale of the various effects and outcomes, this paper clearly demonstrates the importance of broad scope policy design.
    Keywords: benefit-cost analysis, economic policy instruments, environmental economics, environmental tax reform, vehicle taxation
    JEL: D61 H23 Q51 Q53 R48
    Date: 2019–12–20
  5. By: Zhang, Hanzhe (Michigan State University, Department of Economics)
    Abstract: This paper studies the use of posted prices versus auctions in a large dynamic market with many short-lived sellers and long-lived buyers. Although a reserve-price auction maximizes the expected revenue, the optimal revenue decreases when the market becomes more buyer-friendly; namely, when buyers survive longer, face fewer competitors, and become more patient. As the market becomes more buyer-friendly, the revenue advantage from a reserve-price auction over posting a price reduces, but using posted prices would lead to sale and allocative inefficiencies.
    Keywords: optimal sales mechanism; reserve-price auction; posted price
    JEL: D44
    Date: 2019–12–17
  6. By: 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, IPNO - Institut de Physique Nucléaire d'Orsay - UP11 - Université Paris-Sud - Paris 11 - IN2P3 - Institut National de Physique Nucléaire et de Physique des Particules du CNRS - CNRS - Centre National de la Recherche Scientifique); Adrien Bidaud (IPNO - Institut de Physique Nucléaire d'Orsay - UP11 - Université Paris-Sud - Paris 11 - IN2P3 - Institut National de Physique Nucléaire et de Physique des Particules du CNRS - CNRS - Centre National de la Recherche Scientifique); 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)
    Abstract: The study explores future development of biomass uses across different climate policy scenarios and under different assumptions of biomass supply availability and technology performances. Broad bioenergy technology portfolios and generations provide flexibility to allocate bioenergy to supply a specific final energy mix and to remove carbon dioxide by combining bioenergy with carbon capture and sequestration (BECCS). The paper aim is to perform a detailed and focused analysis of the availability of biomass gasification and methanisation and the role of these green gas energy carriers in the decarbonisation strategies using a model based approach to see how some countries technology appropriation evolves through the XXI st century. The results show that the future of bioenergy depends mostly on countries bioenergy supply and demand that are partly triggered by climate policies. Besides, very diverse local biomass end use patterns are highlighted depending on local resource availability, economic growth and climate policies. The majority of modern uses will be possible with a biomass transformation through the gas vector thanks to methanisation and gasification processes. Technology maturities and efficiencies are also essential for bioenergy development for the field competitiveness. In presence of climate policies, the deployment of biomass methanisation and gasification increases two or three times faster due to higher competitiveness compared to highly taxed fossil fuel. The possibility to implement CCS fosters even more the use of bioenergy for decarbonisation strategies in the long term and switching the allocation of the resource in favor of gasification with CCS.
    Keywords: Long-term energy modelling,decarbonisation,bioenergy,gasification,methanisation,biogas,CCS,flexibility 2
    Date: 2020–02
  7. By: Kenneth Lee; Edward Miguel; Catherine Wolfram
    Abstract: In recent years, electrification has re-emerged as a key priority in low-income countries, with a particular focus on electrifying households. Yet the microeconomic literature examining the impacts of electrifying households on economic development has produced a set of conflicting results. Does household electrification lead to measurable gains in living standards or not? Focusing on grid electrification, we discuss how the divergent conclusions across the literature can be explained by differences in methods, interventions, potential for spillovers, and populations. We then use experimental data from Lee, Miguel, and Wolfram (2019) — a field experiment that connected randomly-selected households to the grid in rural Kenya — to show that impacts can vary even across individuals in neighboring villages. Specifically, we show that households that were willing to pay more for a grid electrification may gain more from electrification compared to households that would only connect for free. We conclude that access to household electrification alone is not enough to drive meaningful gains in development outcomes. Instead, future initiatives may work better if paired with complementary inputs that allow people to do more with power.
    JEL: O13 Q40
    Date: 2019–12
  8. By: Höfer, Tim (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))
    Abstract: This paper presents an evaluation of four energy transition scenarios under consideration of multiple stakeholder opinions. We construct a multi-criteria group decision model that applies Value-Focused Thinking to construct a holistic objective system and Multi-Attribute Utility Theory to evaluate the energy transition scenarios. Although the individual scenario evaluations show that the opinions of the stakeholders towards a sustainable energy transition differ largely, we are able to derive three main strands of opinions among the considered stakeholders. For this, we apply a clustering technique to identify and bundle the stakeholders into three groups. This bundling of stakeholder interests enables the identification of the most important policy recommendations for a sustainable energy transition. For the case of Germany, these are to reduce GHG and pollutant emissions and at the same time enable citizens’ participation, limit the visual impact on landscapes, and ensuring internationally comparable energy-related political frameworks for the economy. For the case of a sustainable energy transition in Germany, we find that the stakeholders considered prefer either the highly ambitious climate protection scenario (Scenario B) or the Pan-European scenario (Scenario C). The reference scenario, which was developed by the German Transmission System Operators (TSOs), turns out to be relatively unpopular.
    Keywords: Value-Focused Thinking; Group Decision Making; MAUT; Energy Scenarios
    JEL: D70 D81 O52 Q48
    Date: 2019–05–01
  9. By: Reiche, Colleen PhD; Goyal, Rohit; Cohen, Adam; Serrao, Jacqueline; Kimmel, Shawn PhD; Fernando, Chris; Shaheen, Susan PhD
    Abstract: The Booz Allen Team explored market size and potential barriers to Urban Air Mobility (UAM) by focusing on three potential markets – Airport Shuttle, Air Taxi, and Air Ambulance. We found that the Airport Shuttle and Air Taxi markets are viable, with a significant total available market value in the U.S. of $500 billion, for a fully unconstrained scenario. In this unconstrained best-case scenario, passengers would have the ability to access and fly a UAM at any time, from any location to any destination, without being hindered by constraints such as weather, infrastructure, or traffic volume. Significant legal and regulatory, weather, certification, public perception, and infrastructure constraints exist, which reduce the market potential for these applications to only about 0.5% of the total available market, or $2.5 billion, in the near term. However, we determined that these constraints can be addressed through ongoing intra-governmental partnerships, government and industry collaboration, strong industry commitment, and existing legal and regulatory enablers. We found that the Air Ambulance market is not a viable market if served by electric vertical takeoff and landing (eVTOL) vehicles due to technology constraints but may potentially be viable if a hybrid VTOL aircraft are utilized.
    Keywords: Engineering
    Date: 2018–11–21
  10. By: Young, Mischa; Farber, Steven
    Abstract: Claiming that ride-hailing companies have disrupted the transportation sector is an understatement. The ability and vision of companies, such as Uber and Lyft, to harness smartphones’ built-in GPS technologies, provide real-time information about wait times, and facilitate cashless transactions has enabled them to effectively compete with the taxi industry, and potentially capture a sizeable share of the ridership of other modes as well. RH services are now increasingly being recognized as an accepted transportation service within cities, and have rapidly positioned themselves among the most valuable companies within the transportation sector. Albeit a relatively new field of research, studies on this novel mode of travel have mostly focused on its impacts upon the transportation sector, and on the regulatory and policy frameworks that should be implemented to either encourage or deter its usage. To date, not much work has been done to determine who actually benefits from RH and to understand the equity concerns that it may engender. In this chapter, we explore these largely unaddressed concerns by situating ride-hailing within the well-established transport equity literature that has long focussed on disparities in access and mobility between different social, economic, and demographic groups. This allows us to elaborate on the potentially restrictive nature of RH for many segments of the population. Once unveiled, these equity concerns will shape our discussion and inform our recommendations for an agenda to research equity concerns vis-a-vis ride-hailing.
    Date: 2019–04–09

This nep-reg issue is ©2020 by Natalia Fabra. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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