|
on Energy Economics |
|
Issue of 2012‒06‒25
eighty papers chosen by Roger Fouquet Basque Climate Change Centre, Bilbao, Spain |
| By: | Paul Collier; Anthony J Venables |
| Abstract: | Africa is well endowed with potential for hydro and solar power, but its other endowments – shortages of capital, skills, and governance capacity – make most of the green options relatively expensive, while its abundance of hydro-carbons makes fossil fuels relatively cheap. Current power shortages make expansion of power capacity a priority. Africa’s endowments, and the consequent scarcities and relative prices, are not immutable and can be changed to bring opportunity costs in Africa closer to those in the rest of the world. The international community can support by increasing Africa’s supply of the scarce factors of capital, skills, and governance. |
| Keywords: | Africa, climate change, energy, renewable, leapfrog, latecomer |
| JEL: | Q54 Q5 Q40 O55 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:oxcrwp:089&r=ene |
| By: | Beckman, Jayson F.; Xiarchos, Irene M. |
| Keywords: | Agribusiness, Resource /Energy Economics and Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124444&r=ene |
| By: | Førsund, Finn R. (Dept. of Economics, University of Oslo) |
| Abstract: | There are plans of a substantial increase in the construction of renewable power in Scandinavia in the coming 10 years. The Nordic countries operate a common wholesale market, Nord Pool. Intermittent power (wind power, solar and small-scale hydro power) is stochastic and therefore needs other generating technologies to undertake the necessary adjustment of supply in order to keep up the continuous balance between demand and supply. There are several generating technologies in use in the Nordic countries; hydropower, conventional thermal, nuclear power, combined heat and power based on oil, coal and biofuel, and intermittent power, mainly wind power and run-of-the-river small scale hydro. Interesting questions are which technologies will counter the swings in intermittent power, and the consequences for the price of electricity as to variability. The purpose of the paper is to investigate these questions by using a theoretic dynamic model covering the main technologies used for generating electricity in the Nordic area in order to give qualitative conclusions about the interactions between the technologies and price impacts. A certain amount of intermittent power will be assumed, and then consequences of changes in intermittent power will be studied. |
| Keywords: | Electricity; Intermittent power; Hydropower; Thermal power |
| JEL: | C61 Q40 Q42 |
| Date: | 2012–05–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2012_015&r=ene |
| By: | Lange, Ian; MacPherson, Ronnie |
| Abstract: | A number of countries offer domestic consumers the option of buying their electricity supply through a ‘green tariff', whereby the supplier typically guarantees that all or part of the supply has been generated using renewable energy sources. Various studies have sought to identify variables describing and/or predicting why domestic consumers choose to purchase a green tariff. This study builds on previous work by reviewing the UK market in particular. Using data from the Understanding Society Survey (USS), a number of variables were tested for their predictive power. This included variables identified as statistically significant within other studies, and variables that - to the authors' knowledge - have not been tested through other work. Results find that individuals in the highest income quartile, those with higher qualifications, those supporting the Green political party, those exhibiting strong environmental behaviour and those householdsnot in receipt of winter fuel payments were all more likely to have purchased green tariffs. Significant to a lesser degree were strong environmental attitudes and those households with some form of renewable energy technology |
| Keywords: | Green Tariff; Environmental Attitudes and Behaviours; Household Decision Making |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:stl:stledp:2012-11&r=ene |
| By: | Huang, Haixiao; Khanna, Madhu; Onal, Hayri; Chen, Xiaoguang |
| Keywords: | biofuels, policy, greenhouse gas emissions, Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124637&r=ene |
| By: | Register, D. Lane; Lambert, Dayton M.; English, Burton C.; Jensen, Kimberly L.; Menard, R. Jamey; Wilcox, Michael D. |
| Abstract: | Recent developments in firm location analysis are applied to explore the concentration patterns of firms making up the green energy sectors in 2002 and 2006. A two-step procedure is applied in this analysis. First, Guimarães, Figueiredo, and Woodward’s spatial adaption of Ellison and Glaeser’s industry concentration index are applied to estimate the degree to which firms making up the so-called green energy sectors tend to exhibit concentration. In the second stage, the spatial distribution of concentration is analyzed using a statistical framework, also suggested by Guimarães, Figueiredo, and Woodward. Preliminary results suggest that green energy subsectors exhibit significant global concentration, but localized concentration appears to be random. |
| Keywords: | global, local, industry concentration measures, green energy sectors, Community/Rural/Urban Development, Research Methods/ Statistical Methods, C21, L20, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124038&r=ene |
| By: | Parry, Ian W.H.; Timilsina, Govinda R. |
| Abstract: | Economically efficient prices for the passenger transportation system in the Greater Cairo Metropolitan Area would account for broader societal costs of traffic congestion and accidents, and local and global pollution. A $2.20 per gallon gasoline tax (2006 US$) would be economically efficient, compared with the current subsidy of $1.20 per gallon. Removal of the existing subsidy alone would achieve about three-quarters of the net benefits from subsidy elimination and the tax. Per-mile tolls could target congestion and accident externalities more efficiently than fuel taxes, although they are not practical at present. A combination of $0.80 per gallon gasoline tax to address pollution (versus $2.20 without tolls), and $0.12 and $0.19 tolls per vehicle mile on automobiles and microbuses, respectively, to address traffic congestion and accident externalities (versus $0.22 without fuel taxes) would be most efficient. Current public bus and rail subsidies are relatively close to efficient levels in the absence of such policies; however, if automobile and microbus externalities were fully addressed through more efficient pricing, optimal subsides to public transit would be smaller than current levels. |
| Keywords: | Transport Economics Policy&Planning,Roads&Highways,Airports and Air Services,Transport and Environment,Energy Production and Transportation |
| Date: | 2012–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6083&r=ene |
| By: | O'Rear, Eric; Sarica, Kemal; Tyner, Wallace E. |
| Keywords: | Resource /Energy Economics and Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124837&r=ene |
| By: | Antoci, Angelo; Borghesi, Simone; Marletto, Gerardo |
| Abstract: | Car use is an increasingly serious problem in many modern cities because of polluting emissions, noise, accidents and congestion. To examine this issue, this paper analyzes the individual choice between taking the car and using alternative transport modes (e.g. walking, cycling, taking the bus etc...) in the presence of cars' negative impacts on alternative transport modes. Using a simple evolutionary model, we show the existence of suboptimal Nash equilibria characterized by the widespread use of cars and discuss the effects of simple transport policies that reduce cars' negative impacts on alternative transport modes. |
| Keywords: | urban transport; cars; negative impacts; evolutionary dynamics; suboptimal Nash equilibria |
| JEL: | R40 D62 R41 C73 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39560&r=ene |
| By: | Heshmati, Almas (Korea University) |
| Abstract: | The increasing use of demand-side management as a tool to reliably meet electricity demand at peak time has stimulated interest among researchers, consumers and producer organizations, managers, regulators and policymakers, This research reviews the growing literature on models used to study demand, consumer baseline (CBL) and demand response in the electricity market. After characterizing the general demand models, it reviews consumer baseline based on which further study the demand response models. Given the experience gained from the review and exiting conditions it combines an appropriate model for each case for possible application to the electricity market and discusses the implications of the results. In the literature these aspects are studied independently. The main contribution of this survey is attributed to the simultaneous treatment of the three issues as sequentially interdependent. The review is expected to provide a full understanding of the demand, CBL and demand response in the power market and their relationships. It enhances demand response in the electricity market. The objective is through a combination of demand and supply side managements to reduce demand through different demand response programs during peak times and thereby save costly power generation and energy resources and at the same time reduce vulnerability. |
| Keywords: | power market, demand models, demand response, customer base-line, forecast |
| JEL: | C50 D10 D40 H30 L11 L51 L94 N70 O13 Q21 Q43 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6637&r=ene |
| By: | Antoine Dechezleprêtre (Grantham Research Institute on Climate Change and the Environment, London School of Economics and Political Science); Richard Perkins (Grantham Research Institute on Climate Change and the Environment, London School of Economics and Political Science and Department of Geography and Environment, London School of Economics and Political Science); Eric Neumayer (Grantham Research Institute on Climate Change and the Environment, London School of Economics and Political Science and Department of Geography and Environment, London School of Economics and Political Science) |
| Abstract: | This article examines the impact of environmental regulation within countries as well as regulatory distance between countries on international technology transfer. We employ a recently-assembled dataset of automobile emission standards and corresponding data on non-resident patent filing of automotive environmentally sound technologies (ESTs) in 49 countries between 1992 and 2007. Our analysis shows that an important factor shaping transfers is relative regulatory distance in that countries are more likely to receive newly-innovated technologies from source countries whose regulatory standards are “closer” to their own. Absolute stringency matters as well, consistent with conventional wisdom, although raising domestic environmental standards as such only leads to higher inflows of ESTs in developing countries. Novel to the literature, we show that regulatory standards in the third markets of a country's trading partners also influence transfers: countries receive more ESTs from a specific source country where they export more to markets whose regulatory standards are similar to those of the source country of the transferred technologies. As concerns both domestic regulation and regulation in a country’s major export markets, it is therefore regulatory distance that matters most rather than absolute regulatory levels. |
| Keywords: | Pollution Control Technologies, Environmental Regulation, International Technology Diffusion |
| JEL: | O33 Q53 Q55 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.33&r=ene |
| By: | Heidi Garrett-Peltier |
| Abstract: | As part of efforts to reduce urban emissions, major cities and states, including New York City, San Francisco, the District of Columbia, and California, are now requiring building owners and operators to measure and disclose building energy performance. Such policies are expected to expand significantly in the coming years. In this study, produced with the Institute for Market Transformation, Heidi Garrett-Peltier analyzes the broader impact of these policies. Garrett-Peltier finds that they have the potential to create more than 23,000 new jobs in 2015 and more than 59,000 in 2020, along with significant savings in costs and energy consumption. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:uma:perips:peri-imt-2012-analysis_job_creation&r=ene |
| By: | Ludovico Alcorta (United Nations Industrial Development Organization); Morgan Bazilian (United Nations Industrial Development Organization); Giuseppe De Simone (United Nations Industrial Development Organization); Ascha Pedersen (United Nations Industrial Development Organization) |
| Abstract: | Energy efficiency is a foundation of any good energy policy. The economic, security, and environmental benefits of energy efficiency have been recognized for decades. We explore energy efficiency policy insights derived from survey work in developing countries in 119 projects across nine manufacturing sub-sectors. The methodology utilises financial return calculations to highlight gaps and opportunities for meeting the potential of energy efficiency projects in the manufacturing sector. We find a generally very high level of internal rates of return at a project level - with payback periods ranging from 0.9 to 2.9 years; but note that these metrics do not always appropriately influence corporate decision-making for a number of well-understood reasons. |
| Keywords: | Energy Efficiency, Energy Investment, Energy And Development, Industrial Development |
| JEL: | O14 Q41 E22 C58 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.35&r=ene |
| By: | Lamsal, Madhur; Mullen, Jeffrey D. |
| Keywords: | Productivity Analysis, Public Economics, Research and Development/Tech Change/Emerging Technologies, Resource /Energy Economics and Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124821&r=ene |
| By: | Ha, Soo Jung; Lange, Ian; Lecca, Patrizio; Turner, Karen |
| Abstract: | Quantitative models, such as computable general equilibrium (CGE), that are increasingly used to inform policy processes rely on a number of assumptions concerning how good and services are produced. Previous research has shown that the elasticity of substitution between inputs and the structure in which these inputs interact can have large impacts on model output. However, the choice of elasticities and production structure is often made without the support of statistical evidence. This research aims to address these points by estimating nesting structure and the elasticities of substitution therein across a number of sectors in the UK then testing the implications of introducing these estimates to parameterise a CGE model that is then used to simulation the economy-wide impacts of increased efficiency in the productive use of energy. |
| Keywords: | general equilibrium; KLEM production function; separability assumption s |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:stl:stledp:2012-08&r=ene |
| By: | Khandker, Shahidur R.; Samad, Hussain A.; Ali, Rubaba; Barnes, Douglas F. |
| Abstract: | This paper applies an econometric analysis to estimate the average and distribution benefits of rural electrification using rich household survey data from India. The results support that rural electrification helps to reduce time allocated to fuelwood collection by household members and increases time allocated to studying by boys and girls. Rural electrification also increases labor supply of men and women, schooling of boys and girls, household per capita income and expenditure. Electrification also helps reduce poverty. But the larger share of benefits accrues to wealthier rural households, with poorer ones having a more limited use of electricity. The analysis also shows that restricted supply of electricity, due to frequent power outages, negatively affects both household electricity connection and its consumption, thereby reducing the expected benefits of rural electrification. |
| Keywords: | Consumer/Household Economics, Resource /Energy Economics and Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:125090&r=ene |
| By: | Klaiber, H. Allen; Gopalakrishnan, Sathya |
| Abstract: | Horizontal drilling and hydraulic fracturing processes to extract shale gas have raised concerns among local residents over the safety of these new drilling techniques. To assess whether potential negative externalities associated with shale gas exploration are capitalized into surrounding homeowners property values, we estimate a hedonic model combining data on 3,464 housing sales occurring between 2008 and 2010 in a suburban/rural county south of Pittsburgh, PA which experienced large numbers of new horizontal Marcellus wells beginning in late 2008. Using hedonic methods, we find a negative and significant impact to households in close proximity both spatially and temporally to this activity. Further we find that this negative impact disproportionately accrues to homeowners near additional agricultural areas and on well water. In all cases, the negative impact appears relatively short-lived |
| Keywords: | Shale gas, Housing values, Risk perceptions, Hedonic, Environmental Economics and Policy, Land Economics/Use, Resource /Energy Economics and Policy, Q51, Q52, R21, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124368&r=ene |
| By: | Alberto Cavaliere (Department of Economics and Business, University of Pavia); Stefano De Michelis (Department of Economics and Business, University of Pavia) |
| Abstract: | Common wisdom about the effects of gas market liberalization in the EU claims that the fragmentation of gas supply in the downstream market can raise the price of gas imports, as the bargaining power of European firms in the upstream market would be weakened. We consider such a claim from the point of view of economic theory, by analysing the effects of downstream competition on the upstream price of gas. Though our analysis is limited by the assumption of a single gas producer upstream, we can show that the price of gas imports either is not affected by oligopolistic competition in the downstream market or it is even reduced in case of free entry and fierce competiton. In this last case the incumbent is damaged by economic losses, that can explain his attempt to prevent competition by introducing vertical restraints in the supply chain. Furthermore we show that, in this last case, the introduction of pro-competive constraits on the market share of the incumbent may damage consumers, as it raises prices in the retail market. |
| Keywords: | liberalization, international gas markets, market structure |
| JEL: | L42 L43 L95 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:pav:wpaper:179&r=ene |
| By: | Oscherov, Valeria; Moeltner, Klaus; Grant, Jason |
| Keywords: | Demand and Price Analysis, Resource /Energy Economics and Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124852&r=ene |
| By: | Muhammad, Shahbaz; Tiwari, Aviral; Ilhan, Ozturk; Abdul, Farooq |
| Abstract: | This paper investigates the unit root properties of electricity consumption per capita for the 67 developed and developing countries for 1971-2007 period. To examine the stationary properties of electricity consumption per capita, we have adopted Lee and Strazicich (2003, 2004) test of unit root that allows us to test for at most two endogenous breaks and uses the Lagrange Multiplier (LM) test statistics. Results show that 65 country series reject the unit root null hypothesis except for 2 country series. Thus, our empirical findings provide significant evidence that electricity consumption per capita is stationary in almost all countries considered in the study. The stationarity of electricity consumption per capita indicates that it should be possible for the series to forecast future movements in the energy consumption based on the past behaviors of the series. |
| Keywords: | Electricity, Transitory, Permanent |
| JEL: | Q4 |
| Date: | 2012–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39443&r=ene |
| By: | Murray, Anthony G.; Mills, Bradford F. |
| Keywords: | LIHEAP, Energy Security, Program Evaluation, Resource /Energy Economics and Policy, Q48, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:123968&r=ene |
| By: | Lange, Ian; Moro, Mirko; Traynor, Laura |
| Abstract: | In the UK, the largest proportion of household energy use is for space heating. Popular media make claims of a green hypocrisy: groups which have the strongest attitude towards the environment have the highest emissions. This study examines whether environmental attitudes and behaviours are associated with space heating energy use using data from the British Household Panel Survey. Results find that environmentally friendly attitudes generally do not lead to lower heating expenditures though environmentally friendly behaviours are associated with lower heating expenditure. Also, the effect of these attitudes and behaviours do not change as income increase. |
| Keywords: | green hypocrisy; heating expenditures; environmental attitudes; BHPS |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:stl:stledp:2012-12&r=ene |
| By: | Görke, Uwe-Jens (Ed.); Thrän, Daniela (Ed.); Messner, Frank (Ed.); Kolditz, Olaf (Ed.) |
| Abstract: | -- |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ufzrep:062012&r=ene |
| By: | Claudio Morana (Università di Milano Bicocca, CeRP-Collegio Carlo Alberto, Italy, Fondazione Eni Enrico Mattei, Italy and International Centre for Economic Research, ICER) |
| Abstract: | In this paper the oil price-macroeconomy relationship is investigated from a global perspective, by means of a large scale macro-financial-econometric model. In addition to real activity, fiscal and monetary policy responses and labor and financial markets are considered as well. We find that oil market shocks would have contributed to slowing down economic growth since the first Persian Gulf War episode. Among oil market shocks, supply side disturbances were the largest contributor to macro-financial fluctuations, accounting for up to 12% of real activity variance. The latter shocks would have exercised recessionary effects during the first and second Persian Gulf War and 2008 oil price episodes; preferences, speculative and volatility shocks would have also contributed to exacerbate the recessionary episodes. As long as oil supply will keep expanding at a lower pace than required by demand conditions, a recessionary bias, determined by higher and more uncertain real oil prices, may then be expected to persist also in the near future. |
| Keywords: | Oil Price, Oil Price-Macroeconomy Relationship, Macro-finance Interface, International Business Cycle, Factor Vector Autoregressive Models |
| JEL: | C22 E32 G12 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.28&r=ene |
| By: | Mohammad Reza Farzanegan (University of Marburg) |
| Abstract: | There is an increasing tension between the Iranian Government and the west on an increasingly likely European oil embargo and the Iranian threat to close the Strait of Hormuz. The main question is: What will happen to the international oil prices in the case of shocks in the flow of Iranian oil to the international markets? In this study, we analyze the dynamic relationship between the Iranian oil supply and international oil prices from January 1973 - September 2011, using a modified version of the Granger causality test introduced by Toda and Yamamoto (1995). Our results show that there is no Granger causality between the Iranian oil production and international oil prices. Historical data on the Iranian oil production do not provide any useful information to explain the current and future values of international oil prices. Thus, global oil prices do not follow shocks in the Iranian oil production. |
| JEL: | E37 Q32 Q34 Q38 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:201232&r=ene |
| By: | Beatty, Timothy K.M.; Tuttle, Charlotte |
| Abstract: | This paper examines how price shocks of energy resources including gasoline, natural gas, electricity and heating degree days aect three indicators of food insuciency at a household level. Using the Current Population Survey-Food Security Supplement combined with energy price data from the Energy Information Administration and weather information from the Na- tional Oceanic and Atmospheric Administration, we nd that positive price shocks in gas and natural gas increase the probability of food insecurity and food stress while negative price shocks of heating fuels decrease the probability each indicator of food stress. The most important ef- fects occurred with negative heating fuel price shocks in the low income and cold state-residing low income subgroups. We also consider the effectiveness of federal assistance programs in cush- ioning households from price or weather shocks. We find that heating and food assistance are most effective in low income households that reside in cold states. |
| Keywords: | Consumer/Household Economics, Food Security and Poverty, Resource /Energy Economics and Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124791&r=ene |
| By: | Yu-Hsiang Lei; Guy Michaels |
| Abstract: | We use new data to examine the effects of giant oilfield discoveries around the world since 1946. On average, these discoveries increase per capita oil production and oil exports by up to 50 percent. But these giant oilfield discoveries also have a dark side: they increase the incidence of internal armed conflict by about 5-8 percentage points. This increased incidence of conflict due to giant oilfield discoveries is especially high for countries that had already experienced armed conflicts or coups in the decade prior to discovery |
| Keywords: | Natural Resources, Resource Curse, Petroleum, Armed Conflict, Civil War |
| JEL: | Q34 Q33 O13 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:oxcrwp:067&r=ene |
| By: | Christian Ebeke; Luc Désiré Omgba; Rachid Laajaj |
| Abstract: | Evidence has shown that the allocation of talented people affects the long-term growth. It has been found that a large population of engineers tends to foster innovation and growth more rapidly than population of lawyers and other activities with access to the public rent. Yet little is known about what determines the allocation of talents. This paper uses a sample of 69 developing countries to address this question. It shows that the oil rent tends to orient talents towards productive activities in well-governed countries, and towards rentseeking activities in poorly governed countries. These results are robust to different specifications, datasets on governance quality and estimation methods. The paper sheds light on the sources and mechanisms of the resource curse through its effect on human resources and rent-seeking activities. |
| Keywords: | Rent-seeking; occupational choice; oil rents. |
| JEL: | D72 J24 Q32 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2012-26&r=ene |
| By: | Antoine D'Autume (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris) |
| Abstract: | We study the optimal extraction of two non-renewable resources when extraction costs depend on cumulative previous extraction. We first define a complete user cost of natural resources, including environmental damages, which allows us to greatly simplify the resolution. This framework is applied to a study of oil and coal optimal extraction. The extraction cost of oil is initially lower than the one of coal but increases more rapidly. Coal leads to higher emissions. In a business as usual scenario the optimal path is to use first only oil, before using the two resources and relying a lot on cheaper coal, until the backstop becomes profitable. When the carbon price is taken into account, the optimal path relies much less on the more polluting coal, and it may be optimal to revert to an oil only trajectory. |
| Keywords: | Natural resources, energy mix, global warming. |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00707451&r=ene |
| By: | Bertrand Candelon; Marc Joëts; Sessi Tokpavi |
| Abstract: | This paper investigates the global crude oil market dependence during extreme price movements. To this aim we extend the univariate Granger causality test in extreme risk developed by Hong et al. (2009) in a multivariate context. Asymptotic as well as finite sample properties are delivered. Applying this test for 32 crude oil markets, it turns out that extreme price movements are governed by non-OPEC crude oil markets rather than OPEC ones. More precisely, WTI and Brent crude oils are price setters in both extreme downside and upside price movements. More surprisingly, Mediterranean Russian Urals and Europe Forcados (resp. Ecuador Oriente) rather than Dubai Fateh act as additional benchmarks in periods of extreme price falls (resp. rises). Moreover, the integration process between crude oil markets seems to decrease during extreme price movements making diversification strategies more feasible. |
| Keywords: | Crude oil markets; Risk transmission; Globalization; Distribution tails; Granger-causality test |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2012-28&r=ene |
| By: | Severin Borenstein; Ryan Kellogg |
| Abstract: | Beginning in early 2011, crude oil production in the U.S. Midwest and Canada surpassed the pipeline capacity to transport it to the Gulf Coast where it could access the world oil market. As a result, the U.S. “benchmark” crude oil price in Cushing, Oklahoma, declined substantially relative to internationally traded oil. In this paper, we study how this development affected prices for refined products, focusing on the markets for motor gasoline and diesel. We find that the relative decrease in Midwest crude oil prices did not pass through to wholesale gasoline and diesel prices. This result is consistent with evidence that the marginal gallon of fuel in the Midwest is still imported from coastal locations. Our findings imply that investments in new pipeline infrastructure between the Midwest and the Gulf Coast, such as the southern segment of the controversial Keystone XL pipeline, will not raise gasoline prices in the Midwest. |
| JEL: | L71 L95 Q41 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18127&r=ene |
| By: | Kong, Minji; Han, Doo Bong; Nayga, Rodolfo M., Jr. |
| Abstract: | This study analyzes the interrelationship and volatility between grain and oil prices. Specifically, the objective of this study is to investigate the volatility transmission mechanism of grain prices with oil prices, under the assumption that an increase in crude oil prices not only affects corn and soybean prices but also other grain commodity prices such as wheat and rice. The results presented in this paper suggest several conclusions. First, there is a short-run relationship between the grain market and oil prices, which implies that recent co-movements of oil and grain prices are just a temporary phenomenon. Second, grain prices, except for rice, are affected by oil prices to some degree. Finally, the volatilities of oil prices influence the volatilities of corn and soybean prices, and vice versa. |
| Keywords: | Grain prices, volatility, Volatility Transmission, VAR, GARCH, Resource /Energy Economics and Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124377&r=ene |
| By: | Hernandez, Manuel A.; Gardebroek, Cornelis |
| Abstract: | This paper examines volatility transmission in oil, ethanol and corn prices in the United States between 1997 and 2011. We follow a multivariate GARCH approach to evaluate the level of interdependence and the dynamics of volatility across these markets. The estimation results indicate a higher interaction between ethanol and corn markets in recent years, particularly after 2006 when ethanol became the sole alternative oxygenate for gasoline. We only observe, however, significant volatility spillovers from corn to ethanol prices but not the converse. We also do not find major cross-volatility effects from oil to corn markets. The results do not provide evidence of volatility in energy markets stimulating price volatility in grain markets. |
| Keywords: | Volatility transmission, biofuels, corn, MGARCH, Demand and Price Analysis, Financial Economics, Q42, Q11, C32, |
| Date: | 2012–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124583&r=ene |
| By: | Yang, Juan; Leatham, David J. |
| Abstract: | In this paper we examine price transmission for major agriculture (food) and energy products in China for the years 2004 to 2010. The Error correction model (ECM) and the directed acyclic graphs (DAG) are applied to identify price dynamics among these six variables: rice, wheat, corn, coal, crude oil and ethanol. Our major contribution to the existing literature lies in two perspectives: 1) We firstly employ the error correction model with directed acyclic graphs to study the price dynamics in the food-energy sector in China. The advantage of this approach is that it can offer data-determined (as opposed to a subjectively-determined) pattern for the contemporaneous causal flows which are then used to conduct a more reliable innovation accounting analysis of the ECM shocks. 2) We uncover a recent price transmission among major food-energy markets in China and provide a broad understanding of price adjustments across markets. The result indicates that in the short run, crop price is driving the energy price, while in the long run, crude oil is the leading factor that drives food and other energy prices. We also find that ethanol price is neither in the long-run equilibrium nor responding to deviation from long-run equilibrium. It supports that under the current policy, Chinese government has done well to prevent the ethanol price driving up the food price. The biofuel production is not the cause of rising food price in China. |
| Keywords: | energy, food, biofuel, ethanol, error correction model, direct acyclic graph, Agricultural and Food Policy, Demand and Price Analysis, Environmental Economics and Policy, Food Security and Poverty, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124631&r=ene |
| By: | Golub, Alla A.; Hertel, Thomas W.; Rose, Steven |
| Keywords: | Environmental Economics and Policy, Land Economics/Use, Resource /Energy Economics and Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124935&r=ene |
| By: | Du, Xiaodong |
| Abstract: | Despite a growing literature on the integration of energy and agriculture, few have rigorously examined structural changes in the evolution of related energy and agricultural prices. Motivated by strong comovement and increasing volatility of energy and agricultural prices, we examine dynamic evolutions of ethanol, gasoline, and corn prices over the period of March 2005 – March 2011. A structural change is found around March 2008 in the pairwise dynamic correlations between the prices in a multivariate GARCH model. A structural VAR (SVAR) model is then estimated on two subsamples, one before and one after the identified change point. Using the novel method of “identification through heteroscedasticity”, we exploit the time-varying price volatilities to fully identify the SVAR model. In the more recent period, ethanol, gasoline, and corn prices are found to be more closely linked. Specifically, ethanol (corn) shocks have the largest impact on corn (ethanol) price. The strengthened corn-ethanol relation can be largely explained by the new developments of the biofuel industry and related policy instruments. Variance decomposition shows that for each market a significant and relatively large share of the price variation could be explained by the price changes in the other two markets. For example, corn price changes explain 27% of the variation of ethanol prices, and shocks to ethanol price account for 23% of the variance of corn prices. The results are robust to the inclusion of seasonal dummies, and various representative macroeconomic and financial indicators. |
| Keywords: | identification through heteroscedasticity, structural change, SVAR, variance decomposition, Resource /Energy Economics and Policy, |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae12:125146&r=ene |
| By: | Barrow, Geoffrey; Hochman, Gal; Zilberman, David |
| Keywords: | Resource /Energy Economics and Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124698&r=ene |
| By: | Aye, Goodness C. |
| Abstract: | The current global food crisis presents a puzzle, thus raising concerns among researchers and policymakers. A number of causes have been identified. However, the relative importance of each factor is still uncertain. In this study, the link between food prices and the various interconnected factors are modelled. The study also quantifies the current and future poverty impacts of rising food and energy prices under a number of scenarios. In general, it was observed that rising food and energy prices have adverse effects on the Nigerian economy and household welfare. Thus, the need for appropriate policy responses cannot be overstressed. |
| Keywords: | fuel price, food price, climate change, poverty, Nigeria, Consumer/Household Economics, Food Security and Poverty, International Relations/Trade, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare12:125048&r=ene |
| By: | Rosa, Franco |
| Abstract: | The agricultural sector is receiving a great deal of attention for topics of general interest as the security, multifunctional activities, alternative uses of crops in food/feed/fuel, reduction in GHG (Green House Gas) emission, LCA (Life Cycle Assessment). The EU policies are directed to implement sustainable local agro-food systems, and the AFSC (agro-fuel supply chain) represent the central issue in planning agricultural commodities to be used for fuel production performed in a space-time dimension. In this paper it is presented a methodology of regional planning the AFSC supported by empirical evidences in the region FVG (Friuli Venezia Giulia). The reference crop is the Mais largely cultivated in this region and now used to satisfy food-feedstock-fuel demands. A composite d-base information system is used to simulate the AFSC to predict the consequences of food policies and suggest measures for the RDP (Regional Development Plan).With the integration of agronomic and economic disciplines it is possible to develop a strategy of regional planning for a sustainable production of bio-fuel. |
| Keywords: | planning AFSC, regional development plan, multifunctional approach, agri-food supply chain, simulation, Resource /Energy Economics and Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aieacp:124130&r=ene |
| By: | Chakravorty, Ujjayant (University of Alberta, Department of Economics); Hubert, Marie-Helene (Economics and Management Research Centre); Nostbakken, Linda (University of Alberta School of Business) |
| Abstract: | More than 40% of US grain is now used to produce biofuels, which are used as substitutes for gasoline in transportation. Biofuels have been blamed universally for recent increases in world food prices. Many studies have shown that these energy mandates in the US and EU may have a large (30-60%) impact on food prices. In this paper we show that demand-side effects - in the form of population growth and income-driven preferences for meat and dairy products rather than cereals - may play as much of a role in raising food prices as biofuel policy. By specifying a Ricardian model with differential land quality, we show that a significant amount of new land will be converted to farming which is likely to cause a modest increase in food prices. However, biofuels may increase aggregate world carbon emissions, due to leakage from lower oil prices and conversion of pasture and forest land for farming. |
| Keywords: | clean energy; food demand; land quality; renewable fuel standards; transportation |
| JEL: | Q24 Q32 Q42 |
| Date: | 2012–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:albaec:2012_011&r=ene |
| By: | E.M., Sajeev; Ji, Tianyun; Tyner, Wallace E.; Gramig, Benjamin M |
| Abstract: | This paper provides the first comprehensive economic and life cycle analysis for three major proposed cellulosic feedstocks for biofuels: corn stover, miscanthus, and switchgrass. This economic and environmental evaluation is needed to determine if (how) the emissions reduction requirement in the Renewable Fuel Standard (RFS) is (can be) satisfied and can inform decisions about the structure of policies going forward. The study provides an integrated framework for the estimation of emissions and costs associated with cellulosic biofuel production. Costs for each feedstock are estimated under a range of assumptions, and the costs of conversion via both biochemical and thermochemical pathways are estimated to provide total biofuel costs. The cost and emissions results are presented in the context of the RFS, and the economic and environmental implications of the results are analyzed through the lens of environmental and energy policy. |
| Keywords: | Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124917&r=ene |
| By: | Fatal, Shay; Kotsiri, Sofia; Tejeda, Hernan; Zhan, Congnan |
| Abstract: | The purpose of this study is to identify potential reductions of energy use2 and Green House Gases (GHG) emissions in the U.S. downstream (i.e., after production) supply chain of ethanol and gasoline fuels, by determining optimal transportation modes and routes. The analysis considers ethanol producers and fuel blending terminals, including consolidation and receiving hubs (Russell et al., 2009). Likewise transportation modes used for shipping ethanol are taken into account - rail, truck - in order to determine optimal delivery. Initial results support the need for construction of a new hub consolidation terminal or the expansion of the existing ones. This initial study leaves gasoline fuels, as well as shipments of ethanol via barge or vessel and of gasoline via pipeline, for a future extension. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124700&r=ene |
| By: | Taheripour, Farzad; Tyner, Wallace E. |
| Abstract: | Much research has provided estimates of induced land use change and emissions for first generation biofuels. Relatively little has estimated land use change for the second generation cellulosic biofuels. In this paper we estimate induced land use change and emissions for these biofuels. Estimated emissions due to land use changes induced by biofuels production are uncertain not only because their associated land use changes are uncertain, but also because of uncertainty in the land use emissions factors (EFs). This paper also examines uncertainties related to these EFs and their assumptions. Three emissions factors including EFs obtained based on Woods Hole (WH) data, EFs developed by California Air Resources Board (CARB), and EFs obtained from the Terrestrial Ecosystem Model (TEM) are examined. Using these three EFs, induced land use emissions are calculated for several biofuel pathways under alternative assumptions. The land use change results suggest that corn stover (and by implication other crop residues) have no significant induced land use change associated with biofuel production, but that is not the case for dedicated energy crops. Use of dedicated energy crops induces land use change and transfers natural land (in particular forest) to crop production. Producing bio-gasoline from miscanthus generates the lowest land requirement across all alterative pathways. The largest land requirement is associated with the switchgrass. The difference is due largely to the assumed yields of switchgrass and miscanthus in this analysis. The two major conclusions from this emissions analysis are: 1) inclusion or exclusion of cropland pasture makes a huge difference; and 2) there is wide divergence among the emission factor sources, especially for dedicated crop conversion to ethanol. Inclusion of cropland pasture emissions doubles or triples the emissions obtained using the WH EFs. The estimated induced land use emissions for ethanol and bio-gasoline produced from dedicated crops are essentially the same using the WH EFs, but vastly different using the CARB or TEM EFs factors, with cellulosic ethanol producing substantially more emissions. |
| Keywords: | cellulosic biofuels, land use change emissions, Resource /Energy Economics and Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124407&r=ene |
| By: | Taheripour, Farzad; Tyner, Wallace E. |
| Keywords: | Resource /Energy Economics and Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124737&r=ene |
| By: | Georges, Jessica |
| Abstract: | As petroleum supplies remain in constant limbo, alternative sources are needed to meet energy demands. Biofuels have the potential to mitigate environmental impact, improve balance of payments though foreign exchange savings while providing countries with greater energy security. Considering that biofuels are expected to gain a larger share of the automotive fuel market, biofuels are pertinent to both developed and developing countries. It is necessary to conduct an economic analysis on a biofuel mandate since other countries are contemplating mandates and are moving towards a biofuel economy. This paper finds that coconut farm gate prices are higher but coconut workers’ wages decreased and farmers experienced an increase in volatility in their farm gate price during the time the Biofuel Act was in effect. |
| Keywords: | International Relations/Trade, Resource /Energy Economics and Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124952&r=ene |
| By: | Gedikoglu, Haluk |
| Abstract: | The Energy Independence and Security Act of 2007 set a renewable fuel standard of 36 billion gallons of biofuel production by 2022, of which 21 billion gallons are to come from cellulosic sources, such as Switchgrass and Miscanthus.The objective of this study is to measure the impact of innovativeness and environmental stewardship on farmers’ willingness to grow Switchgrass and Miscanthus.The results of the current study show that innovative farmers are not more willing to grow Switchgrass or Miscanthus than late adopters and laggards. Farmers’ environmental stewardship is found to have a negative impact on willingness to grow Switchgrass and Miscanthus |
| Keywords: | Energgy Crops, Innovativeness, Environmental Stewardship, Ordered Probit, Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2012–05–31 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124323&r=ene |
| By: | Hurley, Sean |
| Abstract: | Utilizing information from two dairies in California, this paper develops a model for examining best management practices for designing and operating an anaerobic digester under the situation of a time-of-use net metering contract. It is argued that optimal decision making requires that multiple enterprise budgets should be developed that account for the different prices that can be received for producing at different times of the day for power that is consumed on-farm or net metered to the local utility. Furthermore, it is argued that while many anaerobic digesters are developed based on engineering efficiency, it would be better under differential pricing if they were built around the idea of maximizing profits, i.e., engineering efficiency is not synonymous with profit maximization. |
| Keywords: | anaerobic digesters, time-of-use, net metering, dairy, best management practices, electricity generation, differential pricing, Agribusiness, Farm Management, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124895&r=ene |
| By: | Torquati, Biancamaria; Marino, Daniela; Porceddu, Pier Riccardo |
| Abstract: | The use of biomass for energy is one of the promising alternatives identified by the European Union to reduce the greenhouse gases emissions and for the energy supply security. The aim of this research is to analyze the potential production, economic and environmental sustainability of the energy produced from the vineyards and olive orchards pruning at the 4 municipalities of Umbria Region. Geo-spatial, economic and environment analysis have been conducted. The integrated approach was used to estimate the total quantity of biomass produced in that area, identify a logistic network for its transportation and finally based on which a power plant has been suggested. The chain costs and the potential profit margins were also calculated and the resulted CO2 emissions into the atmosphere were also been estimated. The results have shown that the fragmentation and the dispersion of agricultural activities as well as technical and logistical decisions affect noticeably the economical and environmental (both in terms of energy balance and CO2 emissions) sustainability of the proposed agri-energetic chain. |
| Keywords: | Resource /Energy Economics and Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aieacp:124382&r=ene |
| By: | Cooper, Kristen; Gorter, Harry de; Drabik, Dusan |
| Abstract: | This paper presents a general equilibrium model of the U.S. economy and estimates the optimal corn ethanol consumption subsidy and blend mandate in two different fiscal environments: a labor market with a pre-existing tax and a fixed governmental revenue requirement, and an undistorted labor market. We first derive analytical formulas for the optimal policies in a theoretical version of the model and show how the first-order welfare effect of the pre-existing labor tax changes the optimal policies. We then build a numerical version of the model and calibrate it to the U.S. economy in 2009 when both a binding ethanol blend mandate and ethanol consumption subsidy were in place. We simulate various policy scenarios in the numerical model, and we find that the optimal ethanol tax credit or blend mandate is zero if the fuel tax is held fixed and the marginal external cost of emissions is about $25/tC. Through several related approaches, the paper shows how fiscal interaction effects raise the cost of the ethanol policies and make it less likely, for any given parameterization, that a positive ethanol policy will be optimal. |
| Keywords: | biofuel policies, ethanol mandate, ethanol subsidy, gasoline tax, greenhouse gas emissions, renewable fuel standard, second best., Research Methods/ Statistical Methods, Resource /Energy Economics and Policy, H2, Q4, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124763&r=ene |
| By: | Mohammad Reza Farzanegan (University of Marburg); Andreas Buehn (University of Utrecht) |
| Abstract: | Environmental quality and climate change have long attracted attention in policy debates. Recently, air quality has emerged on the policy agenda. We calculate a new index of air quality using CO2 and SO2 emissions per capita as indicators and provide a ranking for 122 countries from 1985 to 2005. The empirical analysis supports the EKC hypothesis and shows a significant influence of determinants such as energy efficiency, industrial production, electricity produced from coal sources, and urbanization on air quality. According to our index, Luxemburg, Norway, Iceland, Switzerland, and Japan are among the top 5 countries in terms of air quality performance. The Democratic Republic of Congo, Eritrea, Ethiopia, Togo, and Nepal performed worst in 2005. |
| Keywords: | Air quality, MIMIC model, EKC hypothesis, Development, Emissions |
| JEL: | O56 Q58 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:201226&r=ene |
| By: | J. Andrew Kelly (AP EnvEcon, NovaUCD); Herman R.J. Vollebergh (PBL Netherlands Environmental Assessment Agency and CentER and Tilburg Sustainability Center, Tilburg University) |
| Abstract: | In the context of transboundary air pollution policy the broad ambition is to achieve reductions in the level of environmental and societal damage associated with certain pollutant concentrations and exposure rates in a cost effective manner. Policy formulation and legislative frameworks in this field, such as the current National Emissions Ceiling Directive in the European Union, are challenged by the degree of scientific complexity involved, the dispersed sources of emissions, and the inherent uncertainties associated with long range forecasting under these conditions. This paper identifies the reasons why varied forms of adaptive policy mechanisms (also termed flexibilities) are necessary and valuable in this arena, presents the critical considerations for their design and operation, reviews a selection of the more prominent options currently considered in the associated transboundary research community, and concludes with recommendations for the next set of transboundary air pollution policy frameworks. |
| Keywords: | Transboundary Air Pollution, Emission Ceilings, Flexibility, Adaptive Policy, Integrated Assessment Modelling |
| JEL: | Q52 Q53 Q58 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.32&r=ene |
| By: | Stefan P. Schleicher (Wegener Center for Climate and Global Change at the University of Graz); Angela Köppl (Austrian Institute of Economic Research) |
| Abstract: | If dangerous and irreversible climatic events are to be avoided, global average temperature should not increase by more than 2°C above pre-industrial levels. In order to achieve such a global target, a mitigation pathway has to limit global emissions to about 50 percent below 1990 levels by 2050. We want to investigate in this paper the radical change of the energy system that would be needed for entering the pathway for halving emission levels by applying a global analytical tool. A comprehensive data base with a global coverage including socio-economic data as well as data on energy and emissions has been set up. By dividing the world into six countries and regions which account for two thirds of global emissions and a region for the rest of the world we investigate in an analytical framework the key drivers and parameters of the energy system which refer to population dynamics, economic activity, energy and carbon intensity. Based on assumptions about the diffusion and convergence of these key parameters we derive implications for long-term emission reduction targets. |
| Keywords: | Greenhouse Gas Emissions Reduction Targets, Energy Forecasts |
| JEL: | Q54 Q47 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.36&r=ene |
| By: | Cho, Seong-Hoon; Tanaka, Katsuya; Wu, JunJie; Chadourne, Matthew H.; Roberts, Roland K.; Kim, Seung Gyu |
| Keywords: | Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124896&r=ene |
| By: | Luca Spinesi |
| Abstract: | How to control and limit climate change caused by a growing use of fossil fuels are among the most pressing policy challenges facing the world today. The green paradox argues that carbon taxes can exacerbate global warming problem because firms have the incentive to bring forward the sale of fossil fuels. This paper shows that when technological progress allows the extraction costs of fossil fuels to be reduced over time, and a positive R&D subsidy is paid, a growing carbon tax reveals a welfare maximizing policy. |
| Keywords: | Global warming, carbon taxes, technological change |
| JEL: | O13 O30 Q54 H23 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:oxcrwp:068&r=ene |
| By: | Brown, Rachel; Dillon, Carl; Schieffer, Jack |
| Keywords: | Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124941&r=ene |
| By: | Enrica De Cian (Fondazione Eni Enrico Mattei (FEEM), and Centro Euro-mediterraneo per i Cambiamenti Climatici (CMCC)); Ramiro Parrado (Fondazione Eni Enrico Mattei (FEEM), Centro Euro-mediterraneo per i Cambiamenti Climatici (CMCC) and Ca’ Foscari University of Venice) |
| Abstract: | This paper uses a dynamic CGE model to assess the intertemporal and spatial dimension of technology spillovers embodied in international trade within a climate and trade policy framework. Three are the main contributions of the study. First, to include endogenous factor-biased technical change based on trade flows in a CGE model, particularly for energy and capital. Second, to analyse the implications of specific spillovers embodied in trade of capital goods (machinery and equipment), and third, to highlight the implications of accounting for indirect effects induced by spillovers. We find that explicitly modelling trade spillovers reveals significant effects thanks to the transmission mechanisms underlying imports of capital commodities. We then assess the net contribution of modelling trade spillovers within three policy scenarios. The aggregated net effects of spillovers are rather small confirming findings from previous studies. However, there are important international and intersectoral redistribution effects due to technology transfers represented as embodied spillovers. |
| Keywords: | Computable General Equilibrium Models, Climate Change, Economic Growth, Technological Spillovers |
| JEL: | C68 E27 O12 Q54 Q56 O33 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.27&r=ene |
| By: | Pancharatnam, Padmaja; Aisabokhae, Ruth |
| Abstract: | The inverted U shaped hypothesis between various indicators of environmental degradation and income per capita otherwise known as the Environmental Kuznets Curve (EKC) has gained immense popularity over the past twenty years. Cross-country panel data methods are generally adopted to study the relationship amongst the variables of interest with a possible drawback being that a certain causality structure is presumed to be true. The Directed Acylical Graph technique reveals the underlying causal structure amongst variables. This could aid in the selection of a better regression model. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124854&r=ene |
| By: | Paolo Paruolo (University of Insubria, Department of Economics, Italy); Ben Murphy (European Commission, Joint Research Centre, Institute for Environment and Sustainability, Italy); Greet Janssen-Maenhout (European Commission, Joint Research Centre, Institute for Environment and Sustainability, Italy) |
| Abstract: | This paper uses Vector Autoregressions that allow for nonstationarity and cointegration to investigate the dynamic relation between income and emissions in the period 1970-2008, for all world countries. We consider three emissions compounds, namely CO2, SO2 and a composite global warming index (GWP100). These emissions include energy-related activities with a share varying from 60% (GWP100) to almost 90% (SO2). For all chemical compounds, it is found that for over two thirds of cases income and emissions are driven by unrelated random walks with drift, at 5% significance level. For one quarter of the cases the variables are found to be driven by a common random walk with drift. Finally, for the remaining 4.5% of cases the variables are trend-stationary. Tests of Granger-causality show evidence of both directions of causality. For the case of unrelated stochastic trends, one finds a predominance of emissions causing income (in growth rates), which accords with a production-function rather than with a consumption-function interpretation of the emissions-income relation. The evidence challenges the main implications of the Environmental Kuznets Curve hypothesis, namely that the dominant direction of causality should be from income to emissions, and that for increasing levels of income, emissions should tend to decrease. |
| Keywords: | Environmental Kuznets Curve; Emissions; Income; Cointegration; Common trends |
| JEL: | Q53 Q54 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:32_12&r=ene |
| By: | Adamos Adamou (Department of Economics, University of Cyprus, Cyprus); Sofronis Clerides (Department of Economics, University of Cyprus, Cyprus; Centre for Economic Policy Research, UK); Theodoros Zachariadis (Department of Environmental Science and Technology, Cyprus University of Technology, Cyprus) |
| Abstract: | We estimate demand for automobiles in Greece using a discrete choice model of product differentiation and use the model to evaluate carbon-based tax schemes that could shift consumer purchases towards low-CO2 cars and thus lead to the reduction of fuel use and CO2 emissions. We find that careful policy design, supported by appropriate modeling, can bring about substantial environmental benefits without losing control of economic parameters such as public finances or firm profits. This finding comes in contrast to the results of recent vehicle tax reforms in European countries, which turned out to be more costly than initially expected. Our analysis indicates that, especially in countries with already heavy vehicle taxation, improper implementation of carbon-based taxes can have adverse unintended environmental consequences. |
| Keywords: | automobile market, carbon taxation, emissions, feebates |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:33_12&r=ene |
| By: | Irfanoglu, Zeynep Burcu; Golub, Alla A.; Hertel, Thomas W.; Henderson, Benjamin |
| Abstract: | Given the likely absence of a “top-down” global agreement after the 2012 expiry of the Kyoto Protocol, many countries (or groups of countries) may only be prepared to introduce a price on GHG emissions if they can maintain the competitiveness of their domestic sectors and prevent leakage effects associated with the expansion of unregulated sectors in other countries. One means of achieving this is through border tax adjustments (BTAs). Most of the studies to date have focused on BTAs in the context of CO2 combustion emissions from manufacturing sectors. Agricultural sectors, on the other hand, account for a large share of the hitherto underemphasized non-CO2 emissions. By drawing on recent research into non- CO2 emissions and abatement possibilities in the global agriculture and livestock sectors, this paper seeks to complement and extend the existing literature on BTAs. To do this, the paper uses the global computable general equilibrium model GTAP-AEZ-GHG. The analysis shows that BTAs are helpful in controlling loss of competitiveness and emissions leakage in livestock sectors. The study also assesses effect of BTAs on emissions leakage in other sectors and relationship between effectiveness of BTAs and coalition size. |
| Keywords: | Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:125006&r=ene |
| By: | Liwayway Adkins; Richard Garbaccio; Mun Ho; Eric Moore; Richard Morgenstern |
| Abstract: | The effects of a carbon price on U.S. industries are likely to change over time as firms and customers gradually adjust to new prices. The effects will also depend on offsetting policies to compensate losers and the number of countries implementing comparable policies. We examine the effects of a $15/ton CO2 price, including Waxman-Markey-type allocations, on a disaggregated set of industries, over four time horizons — the very-short-, short-, medium-, and long-runs — distinguished by the ability of firms to raise output prices, change their input mix, and reallocate capital. We find that if firms cannot pass on higher costs, the loss in profits in a number of energy-intensive trade-exposed (EITE) industries will be substantial. When output prices can rise to reflect higher energy costs, the reduction in profits is substantially smaller, and the offsetting policies in H.R. 2454 reduce output and profit losses even more. Over the medium- and long-terms, however, when more adjustments occur, the impact on output is more varied due to general equilibrium effects. We find that the use of the output-based rebates and other allocations in H.R. 2454 can substantially offset the output losses over all four time frames considered. Trade or "competitiveness" effects from the carbon price explain a significant portion of the fall in output for EITE sectors, but in absolute terms the trade impacts are modest and can be reduced or even reversed with the subsidies. The subsidies are less effective, however, in preventing emissions leakage to countries not adopting carbon policies. Roughly half of U.S. trade-related leakage to non-policy countries can be explained by changes in the volume of trade and the other half by higher emissions intensities induced by lower world fuel prices. |
| Keywords: | carbon price, competitiveness, input-output analysis, computable general equilibrium models, output-based allocations, carbon leakage |
| JEL: | D21 D57 D58 F14 H23 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:nev:wpaper:wp201203&r=ene |
| By: | Baptiste Perrissin Fabert (Centre International de Recherche sur l’Environnement et le Développement (CIRED)); Patrice Dumas (CIRED/CIRAD); Jean-Charles Hourcade (CIRED) |
| Abstract: | Given disparate beliefs about economic growth, technical change and damage caused by climate change, this paper starts with the seeming impossibility of determining a unique time profile of the social costs of carbon as a benchmark for climate negotiations and for infrastructure decisions that need to be made now in the absence of an inclusive international accord on climate policies. The paper demonstrates that determining a workable range of the social costs of carbon is however possible in a sequential decision-making framework that permits revising initial decisions in the light of new information. To do so, the paper exploits the results of a stochastic optimal control model run for more than 2000 scenarios that represent the set of beliefs presented about key uncertain parameters in the literature. The paper provides a heuristic mapping of the climate debate in the form of six “clubs of opinions” and shows the possibility of determining a range of social costs of carbon that might permit a compromise between the maximum range of “clubs” and those most likely to emerge in the future. |
| Keywords: | Optimal control, Mitigation, Social Cost of Carbon, Uncertainty |
| JEL: | Q54 Q21 D81 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.34&r=ene |
| By: | Lamia Kamal-Chaoui; Marissa Plouin |
| Abstract: | This report, developed within the framework of the OECD Green Cities programme, is a pilot case study examining the green growth potential of the Paris-IDF region. In a context of stiff international competition and internal socio-economic and environmental pressures, green growth could be an appropriate path toward revitalising the regional economy and improving environmental outcomes. Building and transportation are among the urban sectors with the greatest potential. Several emerging approaches to a more flexible form of metropolitan governance show promise, yet would benefit from greater private sector involvement throughout the policymaking process. Financing green growth will require the further greening of public revenue sources and the creation of new ones. Adapting procurement processes and pursuing innovative coorerative arrangements with the private sector could also be considered. |
| Keywords: | sustainable development, government policy, planning, global warming, regional, regional economics, urban sustainability, territorial, cities, urban, green growth, climate |
| JEL: | O1 O3 Q1 Q2 Q3 Q4 Q5 R1 R4 R5 |
| Date: | 2012–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:oec:govaab:2012/2-en&r=ene |
| By: | Matthew Ranson; Robert N. Stavins |
| Abstract: | The outcome of the December 2011 United Nations climate negotiations in Durban, South Africa, provides an important new opportunity to move toward an international climate policy architecture that is capable of delivering broad international participation and significant global CO2 emissions reductions at reasonable cost. We evaluate one important component of potential climate policy architecture for the post-Durban era: links among independent tradable permit systems for greenhouse gases. Because linkage reduces the cost of achieving given targets, there is tremendous pressure to link existing and planned cap-and-trade systems, and in fact, a number of links already or will soon exist. We draw on recent political and economic experience with linkage to evaluate potential roles that linkage may play in post-Durban international climate policy, both in a near-term, de facto architecture of indirect links between regional, national, and sub-national cap-and-trade systems, and in longer-term, more comprehensive bottom-up architecture of direct links. Although linkage will certainly help to reduce long-term abatement costs, it may also serve as an effective mechanism for building institutional and political structure to support a future climate agreement. |
| JEL: | Q28 Q38 Q48 Q5 Q58 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18140&r=ene |
| By: | Sven Rudolph (University of Kassel); Takeshi Kawakatsu (University of Kyoto) |
| Abstract: | Megacities already account for a major part of global energy-related CO2 emissions with a strong tendency to increase; hence, future climate policy has to put a special emphasis on reducing big cities’ energy consumption, especially in a world, where global climate negotiations are deadlocked. Tokyo, the world’s biggest metropolis and emitter of greenhouse gases roughly comparable to Scandinavian countries, started the world’s first megacity carbon market in 2010, the design of which is unique, due to its focus on end-energy use in buildings. While the program only started in 2010, the first results are now available. Hence, the paper answers the question to what extend Tokyo’s new carbon market can be considered a worthwhile model for other cities as well as an additional building-stone in a bottom-up global climate policy regime. By applying up-to-date sustainability economics reasoning, the paper evaluates the design and the recent results of Tokyo’s carbon market, showing that, while there is still room for improvements, Tokyo has the potential to be a world leader in sustainable local climate policy. |
| Keywords: | climate policy, ETS, local, city, Tokyo |
| JEL: | D62 Q48 Q54 Q58 R59 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:201225&r=ene |
| By: | Perkis, David F.; Cason, Timothy N.; Tyner, Wallace E. |
| Abstract: | Tradable emissions permits have been implemented to control pollution levels in various markets around the world and represent a major component of legislative efforts to control greenhouse gas (GHG) emissions in the United States. Because permits are supplied for a fixed level of pollution, allowing the market for permits to determine the price, there is a desire for price control mechanisms which would protect firms otherwise susceptible to price spikes caused by fluctuations in the demand for pollution abatement. We test permit markets in an experimental laboratory setting to determine the effectiveness of several price control mechanisms. Evidence suggests that both permit supply adjustments and traditional price ceilings (hard ceilings) effectively limit elevated prices in this setting. In contrast, reserve auctions (associated with soft ceiling designs) do not consistently control prices, especially when a minimum reserve permit price is applied. Furthermore, the grandfathering of permits allows permit sellers to realize significant welfare gains at the expense of buyers under a soft ceiling policy. Of the two ceiling options, our results point towards a hard ceiling as the preferred mechanism for controlling short term price increases. |
| Keywords: | Tradable Emissions Permit Market, Price Controls, Hard Ceiling, Soft Ceiling, Experimental Economics, Environmental Economics and Policy, Institutional and Behavioral Economics, Resource /Energy Economics and Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124096&r=ene |
| By: | Garnache, Cloe; Merel, Pierre |
| Keywords: | Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124960&r=ene |
| By: | Ralf Martin; Mirabelle Muûls; Ulrich J. Wagner; Laure B. de Preux |
| Abstract: | When industry compensation is offered to prevent relocation of regulated firms, efficiency requires that payments be distributed across firms so as to equalize marginal relocation probabilities, weighted by the damage caused by relocation. We formalize this fundamental economic logic and apply it to analyze industry compensation rules proposed under the EU Emissions Trading Scheme, which allocate permits for free to carbon and trade intensive industries. We estimate that this practice will result in overcompensation in the order of €6.7 billion every year. Efficient allocation would reduce the aggregate risk of job loss by two thirds without increasing aggregate compensation. |
| Keywords: | Industry compensation, industrial relocation, emissions trading, permit allocation, EU ETS, firm data |
| JEL: | H23 H25 Q52 Q54 F18 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1150&r=ene |
| By: | Haim, David; Plantinga, Andrew J.; Thomann, Enrique A. |
| Keywords: | Resource /Energy Economics and Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:125066&r=ene |
| By: | Ruiz-Tagle, J. Cristolbal |
| Abstract: | This paper aims to test experimentally the fundamental economic incentives for countries to pledge reductions in emissions of green-house gases (GHG) at each negotiation of an International Environmental Agreement for Climate Change (IEACC). |
| Keywords: | Resource /Energy Economics and Policy, |
| Date: | 2012–08–12 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124921&r=ene |
| By: | Céline Kauffmann; Cristina Tébar Less; Dorothee Teichmann |
| Abstract: | This paper provides an overview of current government schemes promoting corporate reporting of greenhouse gas (GHG) emissions and analyses their main building blocks. It describes the drivers and challenges for governments, companies and investors in dealing with GHG reporting and includes 4 case studies examining in more depth the domestic GHG emission reporting schemes of the UK, France, Japan and Australia. This work is part of a project with UNCTAD, the Climate Disclosure Standards Board (CDSB) and the Global Reporting Initiative (GRI) on consistency of climate change reporting. |
| Keywords: | corporate governance, climate change, reporting, greenhouse gas emissions, emissions trading, responsible business conduct |
| JEL: | F23 G32 L15 M4 Q56 |
| Date: | 2012–06–12 |
| URL: | http://d.repec.org/n?u=RePEc:oec:dafaaa:2012/1-en&r=ene |
| By: | Leszek Kąsek (World Bank); Olga Kiuila (University of Warsaw, Faculty of Economic Sciences); Krzysztof Wójtowicz (UPolish Ministry of Economy, Strategy and Analyses Department); Tomasz Żylicz (University of Warsaw, Faculty of Economic Sciences) |
| Abstract: | We analyze existing definitions of carbon leakage and provide a new rigorous one. This is then tested using computable general equilibrium analysis for unilateral carbon dioxide abatement programs in the EU. Our model of the global economy is disaggregated into three regions. The analysis includes a decomposition of change in carbon emission. While some anti-leakage measures reduce carbon leakage significantly, some of them are less effective. We identified a list of parameters which affect not only the magnitude but also the sign of carbon leakage rate. Manipulating with elasticities of substitution in production function suggests that in reaction to the unilateral action of the EU, the other regions may both increase or decrease their carbon emissions. Even though we are positive about computable general equilibrium models’ application in this policy area, their policy simulations cannot be directly treated as policy recommendations without a careful validation of their assumptions. |
| Keywords: | CO2 abatement, CGE models, EU climate policy, decomposition analysis |
| JEL: | C68 Q54 F47 Q48 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:war:wpaper:2012-12&r=ene |
| By: | Guan, Zhengfei |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124684&r=ene |
| By: | Chen, Yu-Fu; Funke, Michael; Glanemann, Nicole |
| Abstract: | The quintessence of recent natural science studies is that the 2 degrees C target can only be achieved with massive emission reductions in the next few years. The central twist of this paper is the addition of this limited time to act into a non-perpetual real options framework analysing optimal climate policy under uncertainty. The window-of-opportunity modelling setup shows that the limited time to act may spark a trend reversal in the direction of low-carbon alternatives. However, the implementation of a climate policy is evaded by high uncertainty about possible climate pathways. |
| Keywords: | Climate policy, CO2 scenarios, non-perpetual real options, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:edn:sirdps:320&r=ene |
| By: | Hussein, Zekarias; Golub, Alla A.; Hertel, Thomas W. |
| Abstract: | Mitigating the potential impacts of climate change is one of the leading environmental policy concerns of the 21st Century. However, there continues to be heated debate about the nature, content and, most importantly, about the impact of the policy actions needed to limit greenhouse gas emissions. One major contributing factor is the lack of systematic evidence on the impact of mitigation policy on the welfare of the poor in developing countries. This paper provides quantitative evidence on the poverty impacts of climate change mitigation polices. We consider a scenario whereby a carbon price of $27/tCO2eq is applied to all sectors in all Annex I regions along with a forest carbon sequestration subsidy to all regions. Using a novel economic-climate policy analysis framework, we assess the poverty impacts of the above policy scenario on seven socio-economic groups in 14 developing countries. In general, we find that such a policy scenario increases poverty in 11 out of the 14 countries in our sample. There are, however, differences when we decompose the scenario by policy drivers, including Annex I taxes on CO2 emissions, a tax on Annex I non-CO2 emissions coupled with a forest carbon sequestration subsidy in Annex I countries, and finally, a carbon forest sequestration subsidy in the non-Annex I countries, paid for by the rich countries. More specifically, the non-fossil fuel GHG tax in Annex I countries boosts agricultural production and helps reduce poverty in countries where there are large concentration of the poor in the agricultural stratum. The fossil fuel tax in Annex I countries is, on average, poverty reducing in the sample of 14 developing countries considered here, but the magnitude of the impact is much smaller. A combination of both fossil fuel and non-fossil fuel GHG taxes in the Annex I region, is more effective at reducing poverty in developing countries. Our results show that a forest carbon sequestration subsidy in the developing countries leads to increased poverty and that happens to be the dominating sub-component of the policy package. There are two forces at work here. One is that such a subsidy bids land away from agriculture and brings substantial benefits to land owners. However, the elasticity of poverty to income changes to land is very small for most countries and this translates to smaller changes to poverty reduction. Furthermore, the subsidy bids land away from agriculture and leads to decline in output of the sector and hence factor income. For most countries, the latter effect seem to dominate and hence the worsening poverty. The second impact is that the inflow of the transfer creates a “Dutch disease” effect, which affects the manufacturing output negatively and reduces non-agricultural income substantially. |
| Keywords: | Climate Change, Mitigation Policies, Computable General Equilibrium, Developing Countries, Poverty Headcount, Environmental Economics and Policy, Food Security and Poverty, Q54, C68, F18, I32, R20, O13, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124689&r=ene |
| By: | Castiglione, Concetta; Infante, Davide; Smirnova, Janna |
| Abstract: | Recent research has clearly demonstrated that economic development is closely related to environmental quality. In last two decades this relationship has been described by the Environmental Kuznets Curves that postulates an inverted U-shaped relationship between pollution and income. However, while theoretical and empirical research has focused on the polluting effects of economic development, few have identified the policy instruments which can be introduced to counteract such negative effects. This paper concentrates on one of these instruments and examines how environmental taxation is related to economic development. The introduction of environmental taxes usually requires strong regulation capabilities such as effective monitoring and enforcement. We assume that these capabilities reflect the integrity of the institution of rule of law and examine how the strength of rule of law affects the environmental taxation-income path. Data from 28 European countries analysed confirm the existence of an inverse U-shaped relationship between environmental taxation and per capita income. The empirical results clearly demonstrate that the environmental taxation-income relationship is strongly influenced by the rule of law which, when strong, ensures that environmental policies are implemented effectively. A strong rule of law thus contributes to achieving a turning point at lower levels of per capita income. Our analysis also made it possible to identify differences in environmental taxation-income paths among European countries, showing that post-transition economies may have not yet reached the turning point of the curve due to the presence of a weaker rule of law. |
| Keywords: | Environmental taxation; Environmental Kuznets Curve; Rule of law |
| JEL: | O43 P28 H23 Q58 |
| Date: | 2012–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39433&r=ene |
| By: | Shewmake, Sharon; Okrent, Abigail M.; Thabrew, Lanka; Vandenbergh, Michael |
| Abstract: | We construct a model to predict how consumers will respond to better information about the carbon content of 42 foods and a nonfood composite as well as product categories through a label, and provide guidance as to what kinds of goods would provide the highest CO¬2eq emission reductions through a labeling scheme. Our model assumes that consumers value their individual carbon footprint, allowing us to utilize estimates of own- and cross-price elasticities of demand from the literature on demand analysis. We make three different assumptions about how consumers currently value their carbon footprint and find that when a label informs consumers, their baseline perception matters. We also find that carbon labels on alcohol and meat would achieve the largest decreases in carbon emissions. |
| Keywords: | Carbon emissions, food labeling, Agricultural and Food Policy, Consumer/Household Economics, Demand and Price Analysis, Environmental Economics and Policy, Resource /Energy Economics and Policy, Q53, D83, Q18, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124369&r=ene |
| By: | Garces-Voisenat, Juan-Pedro; Mukherjee, Zinnia |
| Abstract: | In this paper we assess, through contingent valuation surveys, the willingness to pay (WTP) of the population for more environment-friendly sources of energy, in the context of the proposed construction of big hydroelectric dams in the Chilean Patagonia region. We use two different data samples constructed from the survey responses: (1) A sample of Chileans currently living in Chile. These are individuals who will be receiving the economic benefits that will stem from hydroelectric dams constructed in Patagonia. Their WTP reflects the “user value” of the resource to Chileans. (2) A sample of non-Chileans or Chileans living outside Chile. Their WTP reflects the “existence value” of the natural environment in Patagonia and the expected amount people are willing to pay to protect its pristine conditions. We identify the key determinants that affect the WTP estimates. We then compare this to the real costs of generating electricity with the different currently available technologies. The WTP estimate from sample 1 would provide the Chilean governments a numerical value of the contributions Chilean residents are willing to make to protect the natural environment in Patagonia. The estimate from sample 2 will indicate the contribution that the rest of the world is willing to make in order to preserve unique natural environments and wildlife in remote places of the globe. Overall, it should be a good guide for policymaking in energy matters for developing countries. |
| Keywords: | Energy; Environment; Sustainable Development; Chile; Patagonia |
| JEL: | O1 Q2 Q4 |
| Date: | 2012–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39320&r=ene |
| By: | Loureiro, Maria L.; Labandeira, Xavier; Hanemann, Michael |
| Keywords: | Environmental Economics and Policy, International Relations/Trade, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124933&r=ene |
| By: | Banerjee, Prasenjit; Shogren, Jason F. |
| Abstract: | This paper investigates the interaction between consumers and producers in designing incentive mechanism for climate protection. Firms have material interests in building a moral reputation for those consumers who prefer buying from socially responsible firms. We examine optimal monetary transfer by addressing crowding out effect due to reputation. We find green reputation leads to overprotection and brown firms buy reputation if consumers have strong preference on green products. When consumers care less about firms’ reputation, firms do not have any incentive to buy reputation. |
| Keywords: | Asymmetric Information, Climate change, Crowding out, Mechanism Design, Reputation., Consumer/Household Economics, D02, D03, Q15, Q34, Q57, |
| Date: | 2012–06–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124920&r=ene |