|
on Regulation |
| By: | Fiona Burlig (University of Chicago); James B. Bushnell; David Rapson (University of California, Davis); Catherine D. Wolfram (University of California, Berkeley - Economic Analysis & Policy Group; National Bureau of Economic Research (NBER)) |
| Abstract: | We provide the first at-scale estimate of electric vehicle (EV) home charging. Previous estimates are either based on surveys that reach conflicting conclusions, or are extrapolated from a small, unrepresentative sample of households with dedicated EV meters. We combine billions of hourly electricity meter measurements with address-level EV registration records from California households. The average EV increases overall household load by 2.9 kilowatt-hours per day, less than half the amount assumed by state regulators. Our results imply that EVs travel 5,300 miles per year, under half of the US fleet average. This raises questions about transportation electrification for climate policy. |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:bfi:wpaper:2021-17&r=all |
| By: | CABRAL Luis; HAUCAP Justus; PARKER Geoffrey; PETROPOULOS Georgios; VALLETTI Tommaso; VAN ALSTYNE Marshall |
| Abstract: | Over the last years, several reports highlighted the market power of very large online platforms that are gatekeeping intermediaries between businesses and consumers, and the difficulty for classic competition policy tools to deal effectively with anti-competitive practices in these platforms. In response to this, the European Commission recently published a proposal for a Digital Markets Act (DMA) to complement existing competition policy tools by means of ex-ante obligations for platforms. This report presents an independent economic opinion on the DMA, from a high-level Panel of Economic Experts, established by the JRC and based on existing economic research and evidence. The Panel endorses the vision encapsulated in the DMA, including the designation of large gatekeeper platforms and a series of ex-ante obligations they should comply with. The Panel points out the challenge of striking a balance between the benefits from network effects of large platforms and the potential negative effects from anti-competitive behaviour and winner-takes-all market forces in online services. While some types of anti-competitive behaviour are well-known from classic competition cases, data-driven multi-sided platforms have found new ways of tying, bundling and self-preferencing that present new challenges. The report explores these behaviours in specific settings, including in online advertising and mobile ecosystems. It discusses ways to use valuable data gathered by platforms for pro-competitive purposes and the wider benefit of society in order to achieve a higher standard of fairness in the distribution of the social value generated by large platforms. Information asymmetry between platforms and regulators remains an issue in the effective implementation of the obligations. |
| Keywords: | Digital Markets Act, Platforms, Regulation, Competition |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc122910&r=all |
| By: | Patrick Bolton; Marcin Kacperczyk |
| Abstract: | Companies are exposed to carbon-transition risk as the global economy transitions away from fossil fuels to renewable energy. We estimate the market-based premium associated with this transition risk at the firm level in a cross-section of over 14,400 firms in 77 countries. We find a widespread carbon premium—higher stock returns for companies with higher levels of carbon emissions (and higher annual changes)—in all sectors over three continents, Asia, Europe, and North America. Short-term transition risk is greater for firms located in countries with lower economic development, greater reliance on fossil energy, and less inclusive political systems. Long-term transition risk is higher in countries with stricter domestic, but not international, climate policies. However, transition risk cannot be explained by greater exposure to physical (or headline) risk. Yet, raising investor awareness about climate change amplifies the level of transition risk. |
| JEL: | G12 Q51 Q54 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28510&r=all |
| By: | Perera, Pradeep (Asian Development Bank Institute); Sarker, Tapan (Asian Development Bank Institute); Islam, K. M. Nazmul (Asian Development Bank Institute); Belaïd, Fateh (Asian Development Bank Institute); Taghizadeh-Hesary, Farhad (Asian Development Bank Institute) |
| Abstract: | We examine the challenges of expanding access to an affordable electricity supply for rural households by addressing the subsidies and cost recovery of the existing tariff policy in the context of Uttar Pradesh, India. We used household survey data to assess the consumer attitudes, level of satisfaction, and affordability of electricity in rural areas of Uttar Pradesh, where more than 78% of the state’s population resides. We also examined the regulatory challenges of expanding access to the electricity supply to rural households in an affordable and fiscally sustainable manner. The main conclusions are that households have a higher level of satisfaction and willingness to pay as the supply duration has increased from 12–13 hours per day before 2017 to 15–18 hours per day. By contrast, the affordability of the lifeline level of consumption for people belonging to lower-income groups is low, and there is a need for continued fiscal subsidies to make the electricity affordable for this group of consumers. The case highlights that the prevailing electricity market, based on unmetered connections, a fixed monthly tariff, and a subsidy policy of fiscal transfers to the utility, is suboptimal in its targeting efficiency, incentives for energy conservation, and transparency of subsidy payments. Our policy recommendations apply to developing countries that are reforming their electricity markets. |
| Keywords: | affordability; access to electricity; regulatory framework; fiscal sustainability; India |
| JEL: | O12 O13 O53 Q41 |
| Date: | 2021–01–12 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:1211&r=all |
| By: | Dorothée CHARLIER; Mouez FODHA; Djamel KIRAT |
| Keywords: | , CO2 emissions, Residential Sector, Panel data, Energy prices, Carbon tax |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:leo:wpaper:2849&r=all |
| By: | Clive L. Spash |
| Abstract: | Today, environmental economics is the response of the neoclassical economic school to the ecological crisis, but at one time its leading contributors regarded it as a revolutionary development that would change the conduct and content of economics as a discipline. Understanding and addressing environmental pollution was core to that potential paradigm shift. In tracing the history of conceptualising pollution as an externality and market failure this paper covers the development of ideas by Marshall, Pigou, Pareto, Coase, Stigler, Samuelson, Ciciacy-Wantrup and Kapp. Pollution externality theory is shown to have incorporated an elitist ethics and liberal market ideology. As a market failure pollution was deemed a minor correctible error of the price system. Monetary valuation of social and environmental harm became the means of justifying optimal levels of pollution. Neoliberal theories of spreading property rights further watered down potential interventionist aspects. Bio-physical realism, in the work of Kneese, Ayres and dÂ’Arge, and social realism in KappÂ’s theory of cost shifting were lost once environmental economics adopted a deductivist mathematical formalism. KappÂ’s alternative theory is based on a classic institutionalists economic understanding of cost shifting and power relations. It advocates a public policy response in the form of objective social minima achieved via regulation and planning. This theory has until now been successfully supressed to prevent a potential revolutionary paradigm shift in economic price theory |
| Keywords: | externalities; market failure, cost shifting; price theory; pollution; Pigou; Coase; Kapp; paradigm shift; environmental economics, neoclassical economics; institutional economics, neolibera |
| JEL: | A13 B2 B55 D61 D62 H21 H23 P16 P18 P48 Q5 Q52 Q53 Q57 Q58 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwsre:sre-disc-2021_01&r=all |
| By: | Angela Köppl; Margit Schratzenstaller |
| Abstract: | While environmental taxes aim at making environmentally harmful behaviour more costly, the opposite is true for environmentally beneficial tax incentives. Tax incentives imply foregone public revenues to favour less polluting consumption and investment activities in order to achieve environmental policy goals. While there is a large body of theoretical literature on environmental taxes and emissions trading, the theoretical literature on environmentally beneficial tax incentives (as well as direct subsidies) is rather slim. Most of the literature in the field of beneficial tax incentives consists of empirical case studies on concrete tax incentives that have been introduced in individual countries. The paper provides a review of theoretical and empirical literature addressing the effects of environmentally beneficial tax incentives. Hereby, the review of empirical evidence on the impact of specific tax incentives to reduce greenhouse gas emissions focuses on tax incentives in the transport sector and particularly on those attached to vehicle taxation aiming at supporting the decarbonisation of the car fleet. We also summarise the sparse empirical evidence on tax incentives intended to support the use of public transport, green R&D, and energy efficiency. |
| Keywords: | Carbon taxation, environmental taxation, price-based instruments, tax incentives, climate policy |
| Date: | 2021–02–04 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2021:i:621&r=all |
| By: | Nathaly M Rivera; Cristobal Ruiz Tagle, Elisheba Spiller |
| Abstract: | Renewable energy can yield social benefits through local air quality improvements and their subsequent effects on human health. We estimate some of these benefits using data gathered during the rapid adoption of large-scale solar power generation in Chile over the last decade. Relying on exogenous variation from incremental solar generation capacity over time, we find that solar energy displaces fossil fuel generation (primarily coal-fired generation) and curtails hospital admissions, particularly those due to lower respiratory diseases. These effects are noted mostly in cities downwind of displaced fossil fuel generation and are present across all age groups. Our results document the existence of an additional channel through which renewable energy can increase social welfare. |
| Keywords: | Coal-fired power plants; coal displacement; solar generation; power plants; pollution; morbidity; developing countries; Latin America |
| JEL: | I18 L94 Q42 Q53 |
| Date: | 2021–03–08 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2021wpecon04&r=all |
| By: | Aghion, Philippe (Birkbeck College, University of London); Bergeaud, Antonin (CEP, London School of Economics); Van Reenen, John (MIT Sloan School of Management) |
| Abstract: | Does regulation affect the pace and nature of innovation and if so, by how much? We build a tractable and quantifiable endogenous growth model with size-contingent regulations. We apply this to population administrative firm panel data from France, where many labor regulations apply to firms with 50 or more employees. Nonparametrically, we find that there is a sharp fall in the fraction of innovating firms just to the left of the regulatory threshold. Further, a dynamic analysis shows a sharp reduction in the firm's innovation response to exogenous demand shocks for firms just below the regulatory threshold. We then quantitatively fit the parameters of the model to the data, finding that innovation at the macro level is about 5.4% lower due to the regulation, a 2.2% consumption equivalent welfare loss. Four-fifths of this loss is due to lower innovation intensity per firm rather than just a misallocation towards smaller firms and lower entry. We generalize the theory to allow for changes in the direction of R&D, and find that regulation's negative effects only matter for incremental innovation (as measured by citations and text-based measures of novelty). A more regulated economy may have less innovation, but when firms do innovate they tend to "swing for the fence" with more radical (and labor saving) breakthroughs. |
| Keywords: | innovation, regulation, patents, firm size |
| JEL: | O31 L11 L51 J8 L25 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14082&r=all |
| By: | Runst, Petrik; Höhle, David |
| Abstract: | Many countries have only recently introduced carbon taxation to reduce emissions and the time series data for evaluating these policies is not available yet. Consequently, we use the imposition quasi-carbon-taxes in the German transportation sector, i.e. taxes on fuel that are not calculated based on actual CO2content but which raise the implicit price of carbon emissions, to evaluate the effectiveness of environmental taxation. Our results indicate that the carbon price increase by about 66 €/t CO2led toa considerable decline of transport emissions by 0.2 to 0.35 t per person and year. Our quantitative results as well as a detailed qualitative analysis of a German car manufacturer's business reports suggests that the tax triggered an improvement in engine technology as well as an increased share of diesel engines. |
| Keywords: | Carbon taxation,transport sector,carbon emissions |
| JEL: | H23 Q48 R48 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifhwps:292021&r=all |
| By: | Beiser-McGrath, Liam F. |
| Abstract: | This PECC Lab Research Brief examines public opinion on the Green Industrial Revolution. It uses a nationally representative survey experiment to estimate how the various components of the Green Industrial Revolution affect public support, and which policy proposals are most popular. Executive Summary: - The Prime Minister has recently unveiled a ten-point plan for a Green Industrial Revolution to meet net-zero emissions targets. - We conducted an original survey experiment to causally identify the public’s support for particular points of this plan and their overall level of support. - Public support is increased substantially by consumer grants for electric vehicles, funding of electric public transport, planting of trees, and wind power. - Investment in air and sea vehicles and nuclear power does not meaningfully increase the public’s support. - An ambitious version of the Green Industrial Revolution sees majority support amongst the public, while taking no action is widely opposed. - This ambitious version of the Green Industrial Revolution sees support across party lines, being similarly popular amongst Conservative and Labour supporters. https://www.pecclab.com/publication/publ ic-support-for-green-industrial-revoluti on-pecc-lab-research-brief/ |
| Date: | 2021–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:xpkh4&r=all |
| By: | Ohnishi, Kazuhiro |
| Abstract: | This paper considers a mixed Cournot duopoly model comprising a private firm and a partially privatized public firm to reassess the effect of an increase in ambient charges, and compares the result of this study with that obtained from private Cournot duopoly competition. The paper demonstrates that our result is about the same as that of private Cournot duopoly competition. |
| Keywords: | ambient charge; Cournot duopoly; environmental regulation; partial privatization; pollution |
| JEL: | C72 D21 L33 Q58 |
| Date: | 2021–02–27 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:106319&r=all |
| By: | Umed Temursho (IOpedia, Seville, Spain); Matthias Weitzel (European Commission - JRC); Toon Vandyck (European Commission - JRC) |
| Abstract: | This report enriches economy-wide modelling with household-level microdata to assess the distributional impacts of climate policy in the broader context of the EU Green Deal. The first part of the report provides a detailed exploration of the EU Household Budget Survey data in the light of its use in analysing climate policy impacts across households with heterogeneous consumption patterns. The second part of the report describes the macro-micro framework to combine the Household Budget Survey with the JRC-GEM-E3 model. The third part studies scenarios that cover three different policy configurations –ranging from a regulation-based to a pricing-based approach – all of which reach a reduction in greenhouse gas emissions of 55% in 2030 relative to 1990. Results provide insights into the potential distributional implications across EU households of an upward revision of the 2030 targets, a key aspect in achieving a Just Transition to climate neutrality. Regulation-based policies can mitigate price changes observed by households, while pricing-based policies raise revenue that have the potential to offset regressive impacts. Careful design of targeted complementary measures will therefore be required to reconcile social and environmental sustainability. |
| Keywords: | Just Transition, Climate Policy, Distributional Impacts, Household Budget Survey, Computable General Equilibrium |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc121765&r=all |
| By: | David Ardia; Keven Bluteau; Kris Boudt; Koen Inghelbrecht (-) |
| Abstract: | We empirically test the prediction of Pastor, Stambaugh, and Taylor (2020) that green firms outperform brown firms when concerns about climate change increase unexpectedly, using data for S&P 500 companies from January 2010 to June 2018. To capture unexpected increases in climate change concerns, we construct a Media Climate Change Concerns index using news about climate change published by major U.S. newspapers. We find that when concerns about climate change increase unexpectedly, green firms’ stock prices increase, while brown firms’ decrease. Further, using topic modeling, we conclude that climate change concerns affect returns both through investors updating their expectations about firms’ future cash flows and through changes in investors’ preferences for sustainability |
| Keywords: | Asset Pricing, Climate Change, Sustainable Investing, ESG, Greenhouse Gas Emissions, Sentometrics, Textual Analysis |
| JEL: | G11 G18 Q54 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:21/1011&r=all |