nep-res New Economics Papers
on Resource Economics
Issue of 2021‒03‒29
three papers chosen by
Maximo Rossi
Universidad de la República

  1. Assessing the impact of energy prices on plant-level environmental and economic performance: Evidence from Indonesian manufacturers By Arlan Brucal; Antoine Dechezleprêtre
  2. Real-time electricity pricing to balance green energy intermittency By Stefan Ambec; Claude Crampes
  3. Does LEED Certification Save Energy? Evidence from Federal Buildings By Clay, Karen; Severnini, Edson R.; Sun, Xiaochen

  1. 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
  2. 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
  3. 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

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