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on Regulation |
| By: | Doda, Baran; Fankhauser, Samuel |
| Abstract: | Climate policies do not affect all power producers equally. In this paper, we evaluate the supply-side distributional consequences of emissions reduction policies using a simple and novel partial equilibrium model where production takes place in technology-specific sites. In a quantitative application hydro, wind and solar firms generate power combining capital and sites which differ in productivity. In contrast, the productivity levels of coal, gas and nuclear technologies are constant across sites. We parameterise the model to analyse the effects of stylised tax and subsidy schemes. Carbon pricing outperforms all other instruments and, crucially, leads to more equitable outcomes on the supply side. Technology-specific and uniform subsidies to carbon-free producers result in a greater welfare cost and their supply- side distributional impacts depend on how they are financed. Power consumption taxes have exceptionally high welfare costs and should not be the instrument of choice to reduce emissions or to finance subsidies aiming to reduce emissions. |
| Keywords: | Carbon pricing; renewable subsidies; supply-side distributional implications; ES/R009708/1) |
| JEL: | Q41 Q48 H23 |
| Date: | 2020–01–16 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:102960&r=all |
| By: | Yang, Yuting |
| Abstract: | Electricity interconnection has been recognized as a way to mitigate carbon emissions by dispatching more efficient electricity production and accommodating the growing share of renewables. I analyze the impact of electricity interconnection in the presence of intermittent renewables, such as wind and solar power, on renewable capacity and carbon emissions using a two-country model. I find that in the first-best, interconnection decreases investments in renewable capacity and exacerbates carbon emissions if the social cost of carbon (SCC) is low. Conversely, interconnection increases renewable capacity and reduces carbon emissions for a high SCC. Moreover, the intermittency of renewables generates an insurance gain from interconnection, which also implies that some renewable capacity is optimally curtailed in some states of nature when the SCC is high. The curtailment rate and the corresponding carbon emissions increase for more positively correlated intermittency. I calibrate the model using data from the European Union electricity market and simulate the outcome of expanding interconnection between Germany-Poland and France-Spain. I find that given the current level of SCC, the interconnection may increase carbon emissions. The net benefit of interconnection is positive, with uneven distribution across countries . |
| JEL: | D24 D61 F18 F61 Q27 Q48 Q54 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:124097&r=all |
| By: | Hallegatte,Stephane; Rozenberg,Julie; Maruyama Rentschler,Jun Erik; Nicolas,Claire Marion; Fox,Charles James Edward |
| Abstract: | This paper explores the benefits and the costs of strengthening infrastructure assets to make them more resilient, reducing the repair costs and infrastructure disruptions caused by natural hazards. Strengthening infrastructure assets in low- and middle-income countries would increase investment needs in power, transport, and water and sanitation by between $11 billion and $65 billion a year, i.e. 3 percent of baseline infrastructure investment needs. The uncertainty pertaining to the costs and benefits of infrastructure resilience makes it difficult to provide a single estimate for the benefit-cost ratio of strengthening exposed infrastructure assets. To manage this uncertainty, this paper explores the benefit-cost ratio in 3,000 scenarios, combining uncertainties in all parameters of the analysis. The benefit-cost ratio is higher than 1 in 96 percent of the scenarios, larger than 2 in 77 percent of them, and higher than 4 in half of them. The net present value of these investments over the lifetime of new infrastructure assets -- or, equivalently, the cost of inaction -- exceeds $2 trillion in 75 percent of the scenarios and $4.2 trillion in half of them. Moreover, climate change makes the strengthening of infrastructure assets even more important, doubling the median benefit-cost ratio. |
| Keywords: | Transport Services,Science of Climate Change,Climate Change and Health,Climate Change and Environment,Hydrology,Sanitary Environmental Engineering,Environmental Engineering,Health and Sanitation,Water Supply and Sanitation Economics,Town Water Supply and Sanitation,Small Private Water Supply Providers,Engineering,Sanitation and Sewerage,Water and Human Health,Infrastructure Regulation |
| Date: | 2019–06–17 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:8896&r=all |
| By: | Braese,Johannes Michael; Maruyama Rentschler,Jun Erik; Hallegatte,Stephane |
| Abstract: | This review examines the literature on the role of infrastructure in determining the productivity and competitiveness of firms. It shows that the existing evidence base is clear in concluding that reliable and high-quality infrastructure is a crucial foundation for enabling businesses to thrive. It demonstrates that the provision of electricity, transport, water, and telecommunications systems increases firm-level productivity. It also shows that providing infrastructure per se is not enough to boost productivity, unless it offers reliable service. Disruptions and irregular service have substantial adverse effects on firms, not least due to disrupted supply chains, underutilization of production capacity, and costly adaptation measures. |
| Keywords: | Energy Policies&Economics,Transport Services,Common Carriers Industry,Construction Industry,Business Cycles and Stabilization Policies,Food&Beverage Industry,Plastics&Rubber Industry,General Manufacturing,Textiles, Apparel&Leather Industry,Pulp&Paper Industry,Hydrology,Economic Theory&Research,Industrial Economics,Economic Growth |
| Date: | 2019–06–17 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:8895&r=all |
| By: | Brutscher, Philipp-Bastian; Ravillard, Pauline |
| Abstract: | Promoting investment in energy efficiency has become increasingly important over the past decade. It is heavily discussed in the context of the EU 2021-2027 Multiannual Financial Framework, and at the core of the EU 2030 Climate and Energy Framework. While the budget allocation and the energy efficiency target have been well defined, less is known about effective ways to promote investments in energy efficiency. This paper sheds light on this issue by showing how effective financial instruments and technical assistance are in increasing investments in energy efficiency. Using new experimental data from the European Investment Bank, we find that a lower and fixed interest rate, a lower collateral requirement and the provision of technical assistance in the implementation of the project can significantly boost investment in energy efficiency. When combining these favourable conditions, the probability that firms invest in energy efficiency increases by more than a third. These results provide important insights into measures to increase energy efficiency investments, and how to optimally design them, which is key for EU policy-makers and lending institutions. |
| Keywords: | Economics,Energy |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:eibwps:202001&r=all |
| By: | Kirchem, Dana; Lynch, Muireann Á.; Bertsch, Valentin; Casey, Eoin |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:rb202004&r=all |
| By: | Fulton, Lew PhD; Brown, Austin PhD; Compostella, Junia |
| Abstract: | The emergence of “3 Revolutions” in transportation (automation, electrification and shared mobility) presents a range of questions regarding how consumers will travel in the future, and under what conditions there may be rapid adoption of various services. These include individual on-demand taxi-style services, shared mobility in pooled services, and use of public transit, all with or without drivers. There is now enough data and estimates on the costs of these service combinations, and in some cases ridership data, to consider how consumers are making choices and could do so in the future as things evolve. This project involved: (a) reviewing existing literature and data on consumer mode and vehicle choice; (b) developing new “generalized cost” estimates that combine monetary and non-monetary (e.g., hedonic) components of travel choice, notably incorporating value of time; and (c) conducting a comparison of monetary and generalized trip cost for a range of trip types across travel options in the near term (2020) and longer term (2030-35). Three main travel options were considered: privately owned vehicles, ridesourced solo trips, and ridesourced pooled trips. Consideration of internal combustion vs. battery electric and, in the longer term, automated technology was also core to the analysis. The trips considered include urban and suburban types in the San Francisco metro area, using actual trip characteristics. The results suggest that in the near-term, solo ridesourcing is likely to be perceived as significantly more expensive (in terms of monetary and time costs) than pooled ridesourcing or solo private vehicle trips except for those with a very high value of time. Solo ridesourcing does better in dense, slow, urban trips than in faster suburban trips. In the longer term, with automated driverless vehicles, solo ridesourcing could become the cheapest mode for many travelers in a range of situations. This report includes an initial consideration of the implications of these policies for affecting travel choices, presumably to push choices toward pooled ridesourcing as a sustainable option. VMT-based pricing, pricing that could be adjusted with vehicle occupancy, and parking-related approaches are described. A large price signal might be needed to shift travel, given some of the differences in generalized cost found in this analysis. |
| Keywords: | Engineering, Ridesourcing, ridesharing, vehicle sharing, travel costs, travel behavior, autonomous vehicles, automobile ownership, policy analysis |
| Date: | 2020–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsdav:qt6vz5q4mc&r=all |
| By: | Annika Kemper; Maren D. Schmeck; Anna Kh. Balci |
| Abstract: | In electricity markets futures deliver the underlying over a period and thus function as a swap contract. In this paper we introduce a market price of risk for delivery periods of electricity swaps. In particular, we suggest a weighted geometric average of an artificial geometric electricity futures price over the corresponding delivery period. This leads to a geometric electricity swap price dynamics without any approximation requirements. Our framework allows to include typical features as the Samuelson effect, seasonalities as well as a stochastic volatility in the absence of arbitrage. We show that our suggested model is suitable for pricing options on electricity swaps using the Heston method. Especially, we illustrate the related pricing procedure for electricity swaps and options in the setting of Arismendi et al. (2016), Schneider and Tavin (2018) and Fanelli and Schmeck (2019). |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2002.07561&r=all |
| By: | Grilli, Gianluca; Curtis, John |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp645&r=all |
| By: | Shaheen, Susan PhD; Cohen, Adam; Randolph, Michael; Farrar, Emily; Davis, Richard; Nichols, Aqshems |
| Keywords: | Social and Behavioral Sciences, carsharing, shared mobility, carsharing impacts, carsharing policy |
| Date: | 2019–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsrrp:qt5rm2t387&r=all |
| By: | Guillermo García Alvarez (Department of Economics, University of Sussex, Falmer, United Kingdom); Richard S.J. Tol (Department of Economics, University of Sussex, Falmer, United Kingdom) |
| Abstract: | The Bono Social de Electricidad (BSE) is a government programme, introduced in 2009, to reduce energy poverty in Spain. The BSE is a discount on the price of electricity, available to vulnerable households who applied. Applying differences-in-differences and propensity score matching to household data between 2008 and 2011, we find no statistically significant impact of the intention to treat on two indicators of energy poverty, viz. the ability to keep the house adequately warm, and the presence of damp walls, rotting windows and leaking roofs. This may be because eligible households did not apply. A third indicator, delays in paying electricity bills, showed a statistically significant deterioration. That is, the BSE has not reduced energy poverty, if anything it has made it worse. This is not because eligible households transferred income to relatives hit harder by the financial crises, but it may be because the BSE discount did not fully compensate for the cold of 2010. |
| Keywords: | Energy poverty, Spain, household data, policy evaluation, Bono Social de Electricidad |
| JEL: | I38 Q48 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:sus:susewp:0420&r=all |
| By: | Yash Kanoria; Hamid Nazerzadeh |
| Abstract: | A large fraction of online advertisement is sold via repeated second price auctions. In these auctions, the reserve price is the main tool for the auctioneer to boost revenues. In this work, we investigate the following question: Can changing the reserve prices based on the previous bids improve the revenue of the auction, taking into account the long-term incentives and strategic behavior of the bidders? We show that if the distribution of the valuations is known and satisfies the standard regularity assumptions, then the optimal mechanism has a constant reserve. However, when there is uncertainty in the distribution of the valuations, previous bids can be used to learn the distribution of the valuations and to update the reserve price. We present a simple, approximately incentive-compatible, and asymptotically optimal dynamic reserve mechanism that can significantly improve the revenue over the best static reserve. The paper is from July 2014 (our submission to WINE 2014), posted later here on the arxiv to complement the 1-page abstract in the WINE 2014 proceedings. |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2002.07331&r=all |
| By: | Kornejew,Martin Gunter Michail; Maruyama Rentschler,Jun Erik; Hallegatte,Stephane |
| Abstract: | This study explores the role of governance in improving infrastructure reliability. It estimates that increasing infrastructure spending and improving governance in parallel is six times more effective at enhancing transport system performance than increasing spending alone. It also estimates that under current fiscal budgeting, every $1 spent on infrastructure maintenance is as effective as $1.5 of new investments in many OECD economies. Overall, the evidence in this study demonstrates that it is the quality rather than the quantity of infrastructure spending that determines the quality of infrastructure services. |
| Keywords: | Transport Services,Energy Policies&Economics,Hydrology,Public Sector Economics,Public Financial Management,Public Finance Decentralization and Poverty Reduction |
| Date: | 2019–06–17 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:8894&r=all |
| By: | Shaheen, Susan PhD; Stocker, Adam; Meza, Ruth |
| Abstract: | To better understand the equity implications of a variety of congestion management strategies, researchers at the Transportation Sustainability Research Center (TSRC) at University of California, Berkeley analyzed existing literature on congestion management strategies and findings from 12 expert interviews. The literature review applies the Spatial – Temporal – Economic – Physiological – Social (STEPS) Equity Framework1 to identify impacts and classify whether social equity barriers are reduced, exacerbated, or both by a particular strategy. The congestion management strategies of interest were categorized into six broader categories: 1) pricing, 2) parking and curb policies, 3) operational strategies, 4) infrastructure changes, 5) transportation services and strategies, and 6) conventional taxation. |
| Keywords: | Engineering, traffic congestion, congestion pricing, social equity |
| Date: | 2019–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsrrp:qt7rm9w4pn&r=all |
| By: | Robin Burgess ([Dept of Economics, LSE); Michael Greenstone (Dept of Economics, University of Chicago); Nicholas Ryan (Cowles Foundation, Yale University); Anant Sudarshan (Energy Policy Institute at Chicago, University of Chicago) |
| Abstract: | Nearly a billion people, mostly in rural Africa and South Asia, do not have electricity at home. The advent of off-grid solar power means that many of these households, at the frontier of global electriï¬ cation, have a choice between competing sources of electricity. This paper studies the demand for electricity with a discrete choice model wherein households choose between grid electricity, several off-grid electricity sources, and having no electricity at all. The model is estimated using a randomized experiment that varied the price of solar microgrids for a sample of villages in the state of Bihar, India, an outpost on the global electriï¬ cation frontier. There are three main ï¬ ndings. First, households value electricity, but demand for any one electricity source is highly elastic, because several sources provide similar energy services at similar prices. Second, even in a relatively poor, rural sample, richer households greatly prefer grid electricity. Third, future growth in income will drive an increase in electriï¬ cation due mainly to new grid connections, even if the cost of solar continues to fall. Our analysis suggests that off-grid solar power provides an important stop-gap technology, which ï¬ lls the space between having no electricity at all and grid electricity, but that the future will run on the grid. |
| Keywords: | Energy access, Solar electrification, Electricity demand, Field experiment |
| JEL: | O13 Q41 Q21 C93 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2222&r=all |