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on Regulation |
| By: | Holmberg, P.; Tangerås, T. |
| Abstract: | Many electricity markets use capacity mechanisms to support generation owners. Capacity payments can mitigate imperfections associated with “missing money†in the spot market and solve transitory capacity shortages caused by investment cycles, regulatory changes, or technology shifts. We discuss capacity mechanisms used in different electricity markets around the world. We argue that strategic reserves, if correctly designed, are likely to be more efficient than market-wide capacity mechanisms. This is especially so in electricity markets that rely on substantial amounts of intermittent generation, hydro power, and energy storage whose available capacity varies with circumstances and is difficult to estimate. |
| Keywords: | Capacity mechanism, market design, reliability, resource efficiency |
| JEL: | D25 D47 Q40 Q48 |
| Date: | 2021–04–12 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2132&r=all |
| By: | Hans Lustfeld |
| Abstract: | The main advantage of wind and solar power plants is the power production free of CO2. Their main disadvantage is the volatility of the generated power. According to the estimates of H.-W. Sinn[1], suppressing this volatility requires pumped-storage plants with a huge capacity, several orders of magnitude larger than the present available capacity in Germany[2]. Sinn concluded that wind-solar power can be used only together with conventional power plants as backups. However, based on German power data[3] of 2019 we show that the required storage capacity can significantly be reduced, provided i) a surplus of wind-solar power plants is supplied, ii) smart meters are installed, iii) partly a different kind of wind turbines and solar panels are used in Germany. Our calculations suggest that all the electric energy, presently produced in Germany, can be obtained from wind-solar power alone. And our results let us predict that wind-solar power can be used to produce in addition the energy for transportation, warm water, space heating and in part for process heating, meaning an increase of the present electric energy production by a factor of about 5[1]. Of course, to put such a prediction on firm ground the present calculations have to be confirmed for a period of many years. And it should be kept in mind, that in any case a huge number of wind turbines and solar panels is required. |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2102.00587&r=all |
| By: | George Mörsdorf |
| Abstract: | As part of its ambitious European Green Deal package, at the heart of which stands the commitment to become carbon-neutral by 2050, the European Commission announced that it would propose a “carbon border adjustment mechanism” to address the risk of carbon leakage. This study models the measure in a Computable General Equilibrium framework and analyses how effective it would be in reducing the incidence of carbon leakage. The analysis suggests that even a sectorally limited EU carbon border adjustment would reduce the carbon leakage rate by up to two thirds, making it more effective than the current system of free allocation. Besides environ mental benefits, it would also offset competitiveness losses of European energy-in tensive industries incurred by a higher EU carbon price and generate additional income for public budgets. At the same time, the analysis shows that around a third of the overall incidence of carbon leakage is driven not by competitiveness but by energy price effects, making it impossible to offset by border measures. |
| Keywords: | Carbon border, adjustment, carbon leakage, Computable General Equilib rium, EU climate policy, energy-intensive industries |
| JEL: | Q58 Q54 C68 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ifowps:_350&r=all |
| By: | Thomas Longden (Crawford School of Public Policy, Australian National University); Fiona J. Beck (Research School of Electrical, Energy and Materials Engineering, ANU); Frank Jotzo (Crawford School of Public Policy, Australian National University); Richard Andrews (Crawford School of Public Policy, Australian National University); Mousami Prasad (Crawford School of Public Policy, Australian National University) |
| Abstract: | Hydrogen produced using fossil fuel feed stocks causes greenhouse gas (GHG) emissions, even when carbon capture and storage (CCS) is used. By contrast, hydrogen produced using electrolysis and zero-emissions electricity does not create GHG emissions. Several countries advocating the use of ‘clean’ hydrogen put both technologies in the same category. Recent studies and strategies have compared these technologies, typically assuming high carbon capture rates, but have not assessed the impact of fugitive emissions and lower capture rates on total emissions and costs. We find that emissions from gas or coal based hydrogen production systems could be substantial even with CCS, and the cost of CCS is higher than often assumed. At the same time there are indications that electrolysis with renewable energy could become cheaper than fossil fuel with CCS options, possibly in the nearterm future. Establishing hydrogen supply chains on the basis of fossil fuels, as many national strategies foresee, may be incompatible with decarbonisation objectives and raise the risk of stranded assets. |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:2103&r=all |
| By: | Söderberg, Magnus (The Ratio Institute); Yang, Yingkui (University of Southern Denmark) |
| Abstract: | This study investigates the relationship between number of articles about electricity network regulation published in peer-reviewed journals and actual electricity network prices. Data on published articles are sourced from ScienceDirect and network prices are provided by Eurostat. Different empirical approaches give the same result, namely that an increase in the number of published articles reduces the regulated network price. When articles are highly relevant, one additional article published per year reduces the price by at least 10%. Results also show that the influence on prices is delayed and the effect lasts for a few years. A survey is sent out to regulators to better understand if the relationship can be interpreted as causal. Responses reveal that regulators do access and incorporate relevant research into their work. Considering the cost required to continuously publish relevant articles, research seems to be a highly effective complement to more traditional regulatory work. |
| Keywords: | regulation; electricity; research |
| JEL: | D04 D42 L94 |
| Date: | 2021–04–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0346&r=all |
| By: | Samir Cedic (Linköping University); Alwan Mahmoud (Linköping University); Matteo Manera (University of Milano-Bicocca, Fondazione Eni Enrico Mattei); Gazi Salah Uddin (Linköping University) |
| Abstract: | The aim of this paper is to analyze the connectedness between renewable energy (RE) sectors, the oil & gas sector and other assets using time-scale spillover approach. We find that the RE bioenergy firms are the most connected to oil & gas firms and oil prices. The bond market transmits spillover to the RE sectors, while it receives spillover from the oil & gas sector. Moreover, short-run connectedness drives the dynamic total connectedness. Since changes in bond rates mainly spillover to RE firms and not to oil & gas firms, policy makers should also be aware that changes in interest rates may impact the societal transition to a RE based energy system. Since a shock that increases connectedness in the short run will deter investors from investing in RE assets, it is important for climate policy makers to develop policies that reduce the effect of increased connectedness on RE investments. |
| Keywords: | Renewable Energy, Connectedness, Frequencies, Dynamics, Spillovers |
| JEL: | C1 G15 Q2 Q3 Q43 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2021.10&r=all |
| By: | Lindgren, Charlie (Dalarna University, Falun, Sweden); Daunfeldt, Sven-Olov (Institute of Retail Economics (Handelns Forskningsinstitut)); Rudholm, Niklas (Institute of Retail Economics (Handelns Forskningsinstitut)) |
| Abstract: | Price comparison websites, where consumers can compare prices at a search cost that is close to zero, have become increasingly common around the world. Using daily information on prices, click-throughs, and the number of retailers for a sample of consumer electronics and durable goods over a period of 62 months, we investigate the effects of the increased use of the Swedish price comparison website PriceSpy on prices and price dispersion. We find that increased use by consumers created potential savings of 290 million SEK in 2016, while increased use by retailers created potential savings of approximately 2.9 billion SEK. Reduced prices due to increased use of the price comparison website thus resulted in total potential consumer savings of nearly 3.2 billion SEK (289 million EUR) for the year 2016 alone. Price comparison websites thus place downward pressure on prices, thereby increasing economic efficiency. We also find that the increased use of the price comparison website by retailers resulted in increased price dispersion, while the effect of more consumers using the website was mixed. |
| Keywords: | Consumer search; price dispersion; information; e-tailing; e-commerce |
| JEL: | D21 D22 D83 L11 L81 |
| Date: | 2021–03–31 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:hfiwps:0018&r=all |
| By: | Brilé Anderson (OECD); Emile Cammeraat (OECD); Antoine Dechezleprêtre (OECD); Luisa Dressler (OECD); Nicolas Gonne (OECD); Guy Lalanne (OECD); Joaquim Martins Guilhoto (OECD); Konstantinos Theodoropoulos (OECD) |
| Abstract: | This paper presents a comprehensive assessment of the policy instruments adopted by the Netherlands to reach carbon neutrality in its manufacturing sector by 2050. The analysis illustrates the strength of combining a strong commitment to raising carbon prices with ambitious technology support, uncovers the pervasiveness of competitiveness provisions, and highlights the trade-off between short-term emissions cuts and longer-term technology shift. The Netherlands’ carbon levy sets an ambitious price trajectory to 2030, but is tempered by extensive preferential treatment to energy-intensive users, yielding a highly unequal carbon price across firms and sectors. The country’s technology support focuses on the cost-effective deployment of low-carbon options, which ensures least-cost decarbonisation in the short run but favours relatively mature technologies. The paper offers recommendations for policy adjustments to reach the country’s carbon neutrality objective, including the gradual removal of exemptions, enhanced support for emerging technologies and greater visibility over future infrastructure plans. |
| Keywords: | Carbon pricing, Climate change policy, Technology support |
| JEL: | L52 O38 Q54 Q55 Q58 |
| Date: | 2021–04–15 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaac:108-en&r=all |
| By: | Orth, Matilda (Research Institute of Industrial Economics (IFN)); Maican, Florin (Department of Economics, University of Gothenburg,) |
| Abstract: | This paper estimates a dynamic model of store adjustments in product variety that considers multiproduct service technology to evaluate the impact of entry regulations on variety and long-run profits in Swedish retail. Using rich data on stores and product categories, we find that more liberal entry regulation increases productivity and decreases the adjustment costs of variety. Counterfactual simulations of modest liberalizations of entry incentivize incumbents to offer more product categories to consumers while increasing efficiency and long-run profits. Regional differences are reduced as consumers and incumbents obtain more benefits in markets with restrictive regulation. Generous liberalizations of entry induce net exit of product categories and harm incumbents in markets with limited demand. |
| Keywords: | Retail markets; Entry regulation; Product variety; Productivity; Competition |
| JEL: | L11 L13 L81 |
| Date: | 2021–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1386&r=all |
| By: | Geir H. M. Bjertnæs (Statistics Norway) |
| Abstract: | A tax on fuel combined with tax exemptions or subsidies for fuel-efficient vehicles is implemented in many countries to fulfill the Paris agreement and to curb mileage-related externalities from road traffic. The present study shows that a tax on fuel should be combined with heavier taxation of lowand zero emission vehicles to curb mileage-related externalities and to fulfill emission targets within the transport sector. The emission target is fulfilled by adjusting the CO2-tax component on fuel. The road user charge on fuel is designed to curb mileage-related externalities. The heavier tax on lowand zero emission vehicles prevent motorists from avoiding the road user charge on fuel by purchasing low- and zero emission vehicles. |
| Keywords: | Transportation; optimal taxation; environmental taxation; global warming |
| JEL: | H2 H21 H23 Q58 R48 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:949&r=all |
| By: | Woroch, GA |
| Abstract: | This paper estimates the empirical relationship between concentration in mobile carriers’ holdings of radio spectrum and the performance of the U.S. wireless industry. Reduced-form regressions that use a 2012–2013 cross-section of approximately 700 Cellular Market Areas reveal a robust inverted-U relationship between spectrum HHIs and subscriber penetration rates—a measure of consumer welfare. The marginal effect of spectrum concentration is positive throughout the range of sampled markets—contrary to the conventional concentration-performance hypothesis. This pattern persists when spectrum concentration is separately measured for bands below 1 GHz and for rural areas. It is also shown not to be biased by the potential endogeneity of spectrum HHIs. This paper is distinguished by relating subscriber penetration rates to the quality and coverage of operator networks that supports efficiency explanations for operator size, and hence the benefits of structural concentration. These findings cast doubt on federal policies adopted as early as the 1927 Radio Act that attempt to equalize ownership of spectrum. Instead, our empirical results recommend measures that promote investment in wireless infrastructure and other non-spectrum factors. |
| Keywords: | Spectrum concentration, Industry performance, Mobile wireless services, Applied Economics, Economics |
| Date: | 2020–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:econwp:qt8vv381jt&r=all |
| By: | Rroshi, Daniela; Weichselbaumer, Michael |
| Abstract: | We study the effect of quality disclosure on prices using quality tests released by the main consumer protection agency in Germany. Both durable and non-durable consumer products are covered, representing about 5 percent of weighted expenditures for all products in the German CPI. Cross-section results of the price-quality relation before quality disclosure show that higher prices are positively correlated with higher quality for durable goods, and negatively correlated for non-durable goods; both results are in line with theoretical models of price signaling. In the dynamic analysis, we employ a RD-type approach around publication of the quality evaluation for identification. Results show a positive effect of quality disclosure on prices for high quality durable products and a negative effect for low quality products suggesting that the information improves matching. Opposite results hold for non-durable products. Survival estimates show that products of low quality leave the market earlier. |
| Keywords: | Asymmetric Information, Consumer Protection, Quality Disclosure |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wus005:8061&r=all |
| By: | Branko Bubalo |
| Abstract: | The purpose of this dissertation is to present an overview of the operational and financial performance of airports in Europe. In benchmarking studies, airports are assessed and compared with other airports based on key indicators from a technical and an economic point of view. The interest lies primarily in the question, which key figures can best measure the perception of quality of service from the point of view of the passenger for the services at an airport. |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2102.02379&r=all |
| By: | Sager, Lutz |
| Abstract: | I investigate the relationship between income inequality and the carbon dioxide (CO2) content of consumption. I quantify the CO2 content of household expenditure using input-output analysis and estimate Environmental Engel curves (EECs) which describe the income–emissions relationship. Using EECs for the United States between 1996 and 2009, I decompose the change in CO2 over time and the distribution of emissions across households. In both cases, income is an important driver of household carbon. Finally, I describe a potential “equity-pollution dilemma”—progressive income redistribution may raise the demand for aggregate greenhouse gas emissions. I estimate that transfers raise emissions by 5.1% at the margin and by 2.3% under complete redistribution. |
| Keywords: | consumption; inequality; pollution; redistribution |
| JEL: | D12 D31 H23 Q40 Q52 |
| Date: | 2020–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:102561&r=all |
| By: | Bijnens, Gert; Hutchinson, John; Konings, Jozef; Saint-Guilhem, Arthur |
| Abstract: | Increased investment in clean electricity generation or the introduction of a carbon tax will most likely lead to higher electricity prices. We examine the effect from changing electricity prices on manufacturing employment. Analyzing firm-level data, we find that rising electricity prices lead to a negative impact on labor demand and investment in sectors most reliant on electricity as an input factor. Since these sectors are unevenly spread across countries and regions, the labor impact will also be unevenly spread with the highest impact in Southern Germany and Northern Italy. We also identify an additional channel that leads to heterogeneous responses. When electricity prices rise, financially constrained firms reduce employment more than less constrained firms. This implies a potentially mitigating role for monetary policy. JEL Classification: E52, H23, J23, Q48 |
| Keywords: | employment, environmental regulation, labor demand, manufacturing industry, monetary policy |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20212537&r=all |
| By: | Kolev, Galina V.; Kube, Roland; Schaefer, Thilo; Stolle, Leon |
| Abstract: | Das neue Emissionsreduktionziel der EU von 55 Prozent gegenüber 1990 erfordert den Hochlauf von umfassenden, kostspieligen Technologieinvestitionen zur Dekarbonisierung der Industrie. Gleichzeitig unterliegen erst knapp 20 Prozent der weltweiten Emissionen einer direkten CO2-Bepreisung (World Bank, 2020) und die regionalen CO2-Preise liegen meist unter dem europäi-schen Zertifikatspreis. Damit die Transformation der europäischen Industrie weiterhin mit ei-nem international konkurrenzfähigen Produktionsstandort Europa vereinbar ist, sind zuneh-mende Wettbewerbsnachteile für europäische Hersteller und das steigende Risiko einer Verla-gerung der Produktion und der Emissionen an außereuropäische Standorte (Carbon Leakage) einzudämmen. Im Rahmen ihres Green Deals plant die EU-Kommissionen dazu einen Grenzaus-gleich (Carbon Border Adjustment Mechanism, CBAM) auf Emissionen von importieren Indust-rieprodukten, wenn diese aus Regionen mit geringerem CO2-Preisniveau stammen (EC, 2019). Die Einführung eines Grenzausgleichsmechanismus wird handelspolitische Implikationen mit sich bringen. Sollten die Handelspartner die Grenzabgaben als protektionistisch motivierte Maß-nahme bewerten, könnten sie eine Klage vor der Welthandelsorganisation WTO erheben und Vergeltungsmaßnahmen einleiten. Die Welthandelsregeln enthalten zwar Ausnahmen für Um-weltgüter, doch die endgültige WTO-Konformität lässt sich erst durch drohende Gerichtsverfah-ren endgültig klären. Gerade für exportorientierte Hersteller in Europa liegt hierin ein besonde-res Risiko, denn der Grenzausgleich würde vor allem Zuliefererländer wie Russland, die Türkei und China betreffen, die gleichzeitig wichtige Exportzielländer sind. [...] |
| JEL: | F18 Q54 Q48 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwkpps:62021&r=all |
| By: | Koutchogna Kokou Edem ASSOGBAVI; Stéphane Dées |
| Abstract: | As polices to curb carbon emissions are not implemented similarly across countries, a so-called ’carbon leakage’ may offset domestic carbon reductions at the global level by redirecting CO2-intensive production to places with less stringent environmental regulation. This article uses a standard gravity model with panel data to assess whether a tightening in environmental policy plays as an incentive to offshore highly polluting activities. Our results show no evidence of carbon leakage through international trade. On the contrary, stringent environment policy leads to a reduction in CO2 emissions embodied in traded goods, both from the exporter and the importer’s side. Such results are robust to focusing on trade between emerging and advanced economies. Emissions embodied in trade are rather explained by usual trade determinants, such as shipping costs or income, and the energy intensity of goods produced by the exporting countries. |
| Keywords: | CO2 emissions; international trade; panel data models |
| JEL: | C32 F18 Q56 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:grt:bdxewp:2021-07&r=all |