nep-res New Economics Papers
on Resource Economics
Issue of 2018‒12‒03
four papers chosen by
Maximo Rossi
Universidad de la República

  1. Addressing the climate problem: Choice between allowances, feed-in tariffs and taxes By Amundsen, Eirik S.; Andersen, Peder; Mortensen, Jørgen Birk
  2. Carbon tax in small open economies: an analysis on its economic efficiency By José María Martín-Moreno; Jorge Blázquiez; Rafaela Pérez; Jesús Ruiz
  3. Competitive Advantage in the Renewable Energy Industry: Evidence from a Gravity Model By Onno Kuik; FrŽdŽric Branger; Philippe Quirion
  4. Price and network dynamics in the European carbon market By Andreas Karpf; Antoine Mandel; Stefano Battiston

  1. By: Amundsen, Eirik S. (University of Bergen, Department of Economics); Andersen, Peder (Department of Food and Resource Economics, University of Copenhagen); Mortensen, Jørgen Birk (Department of Economics, University of Copenhagen)
    Abstract: Instruments chosen to pursue climate related targets are not always efficient. In this paper we consider an economy with three climate related targets for its electricity generation: a given share of “green” electricity, a given expansion of “green” electricity, and a given reduction of “black” (fossil based) electricity. At its disposal the country has three instruments: an allowance system (tradable green certificates), a subsidy system (feed-in tariffs) and a Pigouvian fossil tax. Each of these instruments may be used to attain any of the given targets. Within the setting of the model it is verified that each kind of the target has only a single efficient instrument under certainty, and that there is a deadweight loss of using other instruments to achieve the target. Similarly, there is also an analysis of instrument choice when several targets are to be attained at the same time. The paper also discusses the case of simultaneous targets as well as the relevance of the various targets.
    Keywords: energy policy; green certificates; subsidies; Pigouvian taxes; climate change
    JEL: C70 Q28 Q42 Q48
    Date: 2018–04–18
  2. By: José María Martín-Moreno (University of Vigo); Jorge Blázquiez (KARSARC); Rafaela Pérez (University Complutense of Madrid and ICAE); Jesús Ruiz (University Complutense of Madrid and ICAE)
    Abstract: The environmental objectives of the Paris Agreement imply that all policy levers will be eventually used to curb carbon emissions, including a carbon tax and specific taxes on fossil fuels. In this context, we identify the optimal tax-mix for oil, natural gas and coal in order to achieve a specific carbon emissions target for Spain, a competitive and small open economy. In a second step, we compare the optimal tax-mix to a standard carbon tax. This analysis is conducted in a general equilibrium framework. The results of the model suggest that: first, a carbon tax is suboptimal from a second-best point of view. In particular, carbon taxes are an unsatisfactory policy tool for mild environmental targets. Second, governments must always tax coal heavily to reduce CO2 emissions. In addition, subsidizing oil and natural gas could be part of an optimal strategy. This is a counterintuitive and innovative result. Third, we also find that the tax on oil should always be lower than both the tax on natural gas as well as the tax on coal. Fourth, marginal abatement costs of CO2 in terms of social welfare increases as the environmental policy becomes more ambitious. Finally, revenues from a carbon tax are higher than those arising from an optimal tax-mix, which could create a dilemma for policymakers.
    Keywords: carbon tax, CO2 emissions, environmental policy, fossil fuels, optimal taxes.
    JEL: C61 F41 H23
    Date: 2018–11
  3. By: Onno Kuik (IVM, VU Amsterdam); FrŽdŽric Branger (CIRED); Philippe Quirion (CIRED, CNRS)
    Abstract: Pioneering domestic environmental regulation may foster the creation of new eco-industries. These industries could benefit from a competitive advantage in the global market place. This article examines empirical evidence of the impact of domestic renewable energy policies on the export performance of renewable energy products (wind and solar PV). We use a gravity model of international trade with a balanced dataset of 49 (for wind) and 40 (for PV) countries covering the period 1995-2013. The stringency of renewable energy policies are proxied by installed capacities. Our econometric model shows evidence of competitive advantage positively correlated with domestic renewable energy policies, sustained in the wind industry but brief in the solar PV industry. We suggest that the reason for the dynamic difference lies in the underlying technologies involved in the two industries.
    Keywords: Competitive Advantage, Gravity Model, Wind Industry, Solar PV Industry, Green Growth
    JEL: F14 K32 Q42
    Date: 2018–10
  4. By: Andreas Karpf (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Antoine Mandel (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics); Stefano Battiston (CAMS - Centre d'analyse et de mathématique sociale - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper presents an analysis of the European Emission Trading System as a transaction network. It is shown that, given the lack of well-identified trading institutions, industrial actors had to resort to local connections and financial intermediaries to participate in the market. This gave rise to a hierarchical structure in the transaction network. It is then shown that the asymmetries in the network induced market inefficiencies (e.g., increased bid-ask spread) and informational asymmetries, that have been exploited by central agents at the expense of less central ones. Albeit the efficiency of the market has improved from the beginning of Phase II, the asymmetry persists, imposing unnecessary additional costs on agents and reducing the effectiveness of the market as a mitigation instrument.
    Keywords: Network,Carbon market,Climate change,Microstructure
    Date: 2018–09

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