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on Regulation |
| By: | Ian Parry |
| Abstract: | The United States has pledged to become carbon neutral by 2050, meet sectoral objectives (e.g., for carbon free power, electric vehicles) and encourage greater mitigation among large emitting countries and of international transportation emissions. Fiscal policies at the national, sectoral, and international level could play a critical role in implementing these objectives, along with investment, regulatory, and technology policies. Fiscal instruments are cost-effective, can enhance political acceptability, and do not worsen, or could help alleviate, budgetary pressures. Domestically, a fiscal policy package could contain a mix of economy-wide carbon pricing and revenue-neutral feebates (i.e., tax-subsidy schemes) with the latter reinforcing mitigation in the transport, power, industrial, building, forestry, and agricultural sectors. Internationally, a carbon price floor among large emitters (with flexibility to implement equivalent measures) could effectively scale up global mitigation, while levies/feebates offer a practical approach for reducing maritime and aviation emissions. |
| Keywords: | Carbon tax;Greenhouse gas emissions;Non-renewable resources;Natural gas sector;Fuel prices;Climate change,carbon neutrality,US climate mitigation,carbon pricing,feebates,carbon price floor,international aviation and maritime.,WP,efficiency cost o n,feebate variant,fuel economy,mitigation cost |
| Date: | 2021–03–03 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2021/057&r=all |
| By: | Fiona Burlig; James B. Bushnell; David S. Rapson; Catherine Wolfram |
| 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. |
| JEL: | Q4 R4 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28451&r=all |
| By: | Chi L. Ta |
| Abstract: | Rebates that reward economic agents if they meet a minimum conservation threshold are a popular policy to encourage energy conservation. However, most threshold-based rebates are structured such that they do not encourage reduction beyond the threshold. In this paper, I show theoretically that programs with the additional feature that households compete to win rebates can effectively encourage further conservation among those who can meet the threshold reduction. The theory also identifies factors that determine the effectiveness of the program. I then exploit a unique confidential dataset of monthly residential electricity use with over 45 million observations to estimate the overall effect of a Vietnamese electricity rebate program with this competitive element. Next, I empirically test the model’s predictions. I find that the program reduces electricity consumption by 18%, nearly double the threshold level of 10%. Interestingly, the program's effect persists for at least twelve months after it ends, which has important implications for the cost-effectiveness of such interventions. |
| Keywords: | energy conservation |
| JEL: | D12 L94 L98 Q48 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8948&r=all |
| By: | Raphaël Jachnik; Alexander Dobrinevski |
| Abstract: | This paper explores data and methods to assess the alignment or misalignment with climate mitigation objectives of investments in the construction and refurbishment of residential and non-residential buildings. It takes the United Kingdom (UK) as a case study, where such investments reached GBP 162 billion (EUR 184 billion) in 2019 or 39% of UK gross fixed capital formation. The analysis trials different reference points that lead to varying results and each currently come with limitations in terms of coverage or granularity. Sector-level greenhouse gas (GHG) trajectories indicate that, in aggregate, investments in UK buildings have been insufficient, delayed or not aligned enough with caps set by UK Carbon Budgets, but such trajectories currently lack disaggregation for a more granular and insightful matching with investment data. Energy performance certificates (EPCs) allow for asset-level analyses: for instance, 79% of 2010-2019 investments in new built residential were in relatively energy efficient buildings but only 1% were consistent with more demanding recommendations towards the UK’s objective of reaching net-zero GHG in 2050. The coverage and reliability of EPCs, however, needs to be improved for older buildings, whose deep retrofitting is a major financing challenge. Applying Climate Bonds Initiative criteria for low-carbon buildings identifies investments eligible for green bond financing, but such criteria have partial sectoral coverage and are based on currently most efficient buildings within the existing stock, which makes them relatively easy to meet for investments in new built.Producing more complete and policy relevant assessments of aligned and misaligned investments at national and sectoral levels requires the availability of and access to comparable and granular data on decarbonisation targets and pathways consistent with the Paris Agreement temperature goals, GHG performance of assets, corporate and household investments, as well as underlying sources of financing. |
| Keywords: | buildings, capital expenditure, climate change, emissions, energy efficiency, finance, investment, low-greenhouse gas development, measurement, scenarios, taxonomy, tracking, United Kingdom |
| JEL: | E01 E22 G31 G32 H54 Q56 Q54 R31 R33 |
| Date: | 2021–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:oec:envaaa:172-en&r=all |
| By: | Christian Desmaris (LAET - Laboratoire Aménagement Économie Transports - UL2 - Université Lumière - Lyon 2 - ENTPE - École Nationale des Travaux Publics de l'État - CNRS - Centre National de la Recherche Scientifique, IEP Lyon - Sciences Po Lyon - Institut d'études politiques de Lyon - Université de Lyon); Guillaume Monchambert (LAET - Laboratoire Aménagement Économie Transports - UL2 - Université Lumière - Lyon 2 - ENTPE - École Nationale des Travaux Publics de l'État - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This paper investigates the productive efficiency of French regional rail operators. Benefiting from unique databases (2012-2016), we use a panel stochastic frontier model to measure and explain the productive efficiency. We consider the regional monopoly nature of these operators by introducing specific contract-related variables into the model. The technical efficiency level of regional operators ranges from 59 to 98 per cent, revealing a high degree of heterogeneity in productive performance between regional operators. Factors related to the societal environment (density and delinquency rate), the characteristics of the rail system (network length and number of stations) and contractual design are significantly correlated with the technical efficiency. The policy implications of these results are substantial for both public authorities and rail operators. |
| Keywords: | TER,France,Stochastic frontiers,Regional rail passenger market,Rail regulation,Productive efficiency,Working Papers du LAET |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-03118747&r=all |
| By: | ITF |
| Abstract: | This report presents policies and private sector initiatives for the electrification of urban delivery vehicles. Electric vehicles have low operational costs and the high mileage of delivery vehicles maximises net savings from converting a fleet. Insights on the total cost of ownership and the environmental footprint of electric fleets highlight broader benefits of electrification programmes for commercial vehicles. |
| Date: | 2020–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:oec:itfaac:81-en&r=all |
| By: | Isermeyer, Folkhard; Heidecke, Claudia; Osterburg, Bernhard |
| Abstract: | In this working paper we examine whether it would be possible and reasonable to integrate the agricultural sector into CO2 pricing. CO2 pricing has been practiced in Europe for years. The EU Emissions Trading System (ETS) regulates emissions from approximately 12,000 large-scale plants in the energy and energy-intensive industries, as well as emissions from intra-European aviation. The ETS thus comprises almost half of Europe's greenhouse gas emissions. The politically defined mitigation targets are achieved in the ETS area (albeit with the participation of various other climate policy instruments), whereas they have so far been missed in the non-ETS area. In Autumn 2019, the German federal government presented a climate protection law that provides a comprehensive set of measures. One of the most important measures here is the inclusion of fossil heating and fuel in emissions trading. Initially, only a nationally-based trading system is planned for these sectors, and CO2 prices are to be kept low in the initial phase. The long-term effect of this system change can, however, be considerable: approximately 85 percent of Germa-ny's greenhouse gas emissions will soon be included in emission trading. This means that emissions can be gradually reduced along an initially agreed upon reduction path without the policymakers constantly having to fight for new decisions. Besides certain emissions from industrial processes, emission trading then only misses the areas of agriculture and land use. Against this background, it is the aim of this working paper to comprehensively examine whether these areas could also be integrated. First, based on economic theory and political experience, we show that the advantages of CO2 pricing compared to other climate policy options are the following: (1) Emission reduction targets are achieved along the politically-determined savings path. (2) All companies and all consumers are supplied with scarcity signals via prices, so that all people constantly participate in the “reduction and innovation competition”. (3) Emission reductions ultimately take place where they cause the lowest economic costs. (4) The system is based on market principles and is therefore particularly well-connected to a globally coordinated climate mitigation policy. However, two major challenges can be derived from the theoretical discussion, which can make it more difficult to integrate agriculture and land use into emissions trading: (1) Agricultural emissions come from many diffuse sources. It is therefore not easy to find starting points for climate mitigation measures that can be administered legally and with reasonable effort. (2) Agricultural and forestry products are traded internationally on a large scale. CO2 pricing in Europe can therefore lead to emissions-intensive production branches being relocated to third countries and thus lead to higher greenhouse gas emissions elsewhere (leakage effects). Theoretically, the best policy concept would be to use the “individual greenhouse gas balance” of each individual farm (i.e., an aggregate of all farm emissions minus the long-term carbon seques-tration on its land) as a control parameter. In practice, however, it is not possible to determine the data required for the many farms in a justifiable and reasonable manner. Therefore, in the further course of the article we will investigate how the different groups of greenhouse gases (nitrous oxide, methane, carbon dioxide) could be integrated into CO2 pricing. |
| Keywords: | Agricultural and Food Policy, Environmental Economics and Policy |
| Date: | 2021–03–19 |
| URL: | http://d.repec.org/n?u=RePEc:ags:jhimwp:310017&r=all |
| By: | Stefan Ambec (TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Claude Crampes (TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | The presence of consumers able to respond to changes in wholesale electricity prices facilitates the penetration of renewable intermittent sources of energy such as wind or sun power. We investigate how adapting demand to intermittent electricity supply by making consumers price-responsive - thanks to smart meters and home automation appliances - impacts the energy mix. We show that it almost always reduces carbon emissions. Furthermore, when consumers are not too risk-averse, demand response is socially beneficial because the loss from exposing consumers to volatile prices is more than offset by lower production and environmental costs. However, the gain is decreasing when the proportion of reactive consumers increases. Therefore, depending on the costs of the necessary smart hardware, it may be non-optimal to equip the whole population. |
| Keywords: | Electricity,Intermittency,Renewables,Dynamic pricing,Demand response,Smart meters |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03153425&r=all |
| By: | Cyril Bourgeois (CIRED - Centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - AgroParisTech - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique); Louis-Gaëtan Giraudet (ENPC - École des Ponts ParisTech, CIRED - Centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - AgroParisTech - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique); Philippe Quirion (CIRED - Centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - AgroParisTech - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Empirical evidence suggests that carbon taxes are best accepted when their revenue is used to finance abatement measures. This revenue recycling option has however received little attention in modelling assessments. With the aim of filling this gap, we assess the impact of the French carbon tax on energy use for residential heating and compare the cost-effectiveness and distributional impacts of two revenue recycling options: lump-sum payment and subsidies for home energy retrofits. We do so using Res-IRF, an energy-economy model that provides a highly detailed description of housing features (single vs. multi-family, energy efficiency, heating fuel) and key household characteristics (tenancy status, income). We find that the two recycling options offset the regressive impacts of the tax in comparable ways. Lump-sum recycling is particularly effective in reducing inequalities between owner-occupiers and tenants. In turn, subsidy recycling saves energy and increases comfort more cost-effectively. In the discussion, we further point to some advantages of subsidy recycling from both a political and administrative perspective. |
| Keywords: | carbon tax,revenue-recycling,building sector,fuel poverty,energy efficiency subsidies |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02073964&r=all |
| By: | Rottner, Elisa; von Graevenitz, Kathrine |
| Abstract: | Carbon emissions from German manufacturing have increased over the past decade, while carbon intensity (emissions per Euro of gross output) has declined only slightly. We decompose changes in emissions between 2005 and 2017 into scale, composition (changes in the mix of goods produced) and technology (emission factors of production) effects. We find evidence that the production composition in the German manufacturing sector is increasingly shifting towards less carbonintensive products. However, we also find evidence to suggest that the energy intensity of production has increased. These results are largely driven by a few energy intensive sectors. |
| Keywords: | Carbon emissions,Climate Policy,Statistical Decomposition,Manufacturing |
| JEL: | D22 L60 Q41 Q48 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:21027&r=all |
| By: | Clay, Karen (Carnegie Mellon University); Severnini, Edson R. (Carnegie Mellon University); Sun, Xiaochen (Carnegie Mellon University) |
| Abstract: | In the absence of first-best climate policy, energy efficiency has figured prominently among strategies to reduce carbon emissions. One of the most sought-after green certification in the building sector is the internationally recognized Leadership in Energy & Environmental Design (LEED). This paper examines the effects of LEED certification on energy efficiency in federally owned buildings. Using propensity score matching and difference in differences models, we find no effect of LEED certification on average energy consumption. This reflects the fact that energy use is one of a number of attributes that receives scores under the LEED program. Buildings with above average energy scores have greater energy efficiency post-certification. Some other attributes, notably higher water scores, decrease energy efficiency post-certification. Trade-offs across LEED attributes account for the absence of energy savings on average. If energy efficiency is the primary policy goal, LEED certification may not be the most effective means to reach that goal. |
| Keywords: | energy efficiency, LEED certification, energy savings, federal buildings, trade-off across LEED attributes |
| JEL: | O31 Q41 Q48 Q52 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14211&r=all |
| By: | Jean-Henry Ferrasse (M2P2 - Laboratoire de Mécanique, Modélisation et Procédés Propres - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Nandeeta Neerunjun (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique, M2P2 - Laboratoire de Mécanique, Modélisation et Procédés Propres - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Hubert Stahn (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | We analyze the integration of intermittent renewables-based technologies into an electricity mix comprising of conventional energy. Intermittency is modeled by a contingent electricity market and we introduce demand-side flexibility through the retailing structure. Retailers propose diversified electricity contracts at different prices allowing consumers to choose their optimal electricity consumption. These contracts are modeled by a set of state-contingent electricity delivery contracts. We show existence and uniqueness of a competitive equilibrium of the contingent wholesale and retail markets. We provide a welfare analysis and only obtain constraint efficiency due to a limited number of delivery contracts. Finally, we discuss the conditions under which changing the set of delivery contracts improves penetration of renewables and increases welfare. This provides useful policy insights for managing intermittency and achieving renewable capacity objectives. |
| Keywords: | electricity market,renewables,intermittency,demand flexibility |
| Date: | 2021–02–27 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-03154612&r=all |
| By: | Arlan Brucal (London School of Economics); Antoine Dechezleprêtre (OECD) |
| Abstract: | This paper provides an empirical analysis of the impact of energy price increases – induced notably by the removal of fossil fuel subsidies – on the joint environmental and economic performance of Indonesian plants in the manufacturing industry for the period 1980-2015. The paper shows that a 10% increase in energy prices causes a a reduction in energy use by 5.2% and a reduction in CO2 emissions by 5.8% on average, with more energy-intensive sectors responding more to the shocks. At the same time, energy price increases increase the probability of plant exit and reduce employment of large and energy intensive plants, but the estimated effect is very small (-0.2% for a 10% increase in energy prices). Morevoer, energy price changes have no significant influence on net job creation at the industry-wide level, suggesting that jobs are not lost but reallocated from energy-intensive to energy-efficient firms. Overall, the empirical evidence demonstrates that environmental fiscal reforms in emerging economies like Indonesia can bring about large environmental benefits with little to no effect on employment. |
| Keywords: | carbon emissions reductions, competitiveness, energy price, firm performance, fossil fuel subsidy reform |
| JEL: | Q54 Q58 Q52 |
| Date: | 2021–03–25 |
| URL: | http://d.repec.org/n?u=RePEc:oec:envaaa:170-en&r=all |