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on Energy Economics |
| By: | Igarashi, Yoshiyuki; Coupal, Roger; Finnoff, David; Andersen, Matt |
| Keywords: | Reclamation Bond, Natural Resource, Oil and Natural Gas, Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170600&r=ene |
| By: | Guivarch, Céline; Monjon, Stéphanie; Rozenberg, Julie; Vogt-Schilb, Adrien |
| Abstract: | Energy security improvement is often presented as a possible co-benefit of climate policies. This paper evaluates this claim. It presents a methodology to investigate whether climate policy would improve energy security, while accounting for the difficulties entailed by the many-faceted nature of the energy security concept and the large uncertainties on the determinants of future changes in energy systems. To do so, it uses a set of indicators in a four-dimension analysis grid of the energy security concept, and a database of scenarios exploring the uncertainty space. The results, focusing on Europe, reveal there is no unequivocal effect of climate policy on all the dimensions of energy security and that some trade-offs are involved. The many-faceted nature of energy security matters: energy security has several dimensions, some of which can be heightened by climate policy. Time matters: the effect of climate policy on energy security depends on the time horizon considered. Last, these results are robust to key uncertainties on the future potential and costs of technologies, on future improvements in energy efficiency, on fossil fuel resources and markets and on drivers of economic growth. However, some of these uncertainties determine the magnitude of the effect of climate policy on energy security indicators. |
| Keywords: | Climate policy; energy security; Europe; scenarios database; multi-criteria decision; |
| JEL: | Q48 Q54 Q34 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:dau:papers:123456789/13920&r=ene |
| By: | Gabriel Gomes |
| Abstract: | This paper investigates to which extent dollar real exchange rate movements affect the relationship between oil prices and oil currencies. Estimating a panel cointegrating model between the real exchange rate and its drivers for a sample of 11 OPEC countries and 8 major oil-exporting economies over the 1980-2013 period, we find evidence to support the existence of oil currencies. To analyze how dollar movements may affect the oil price – oil currency nexus, we then estimate a panel smooth transition regression model. Results show that beyond a certain threshold for the dollar depreciation, the sign of the relationship between oil prices and oil countries’ exchange rate switches from positive to negative. In fact, when the dollar depreciation is higher than 2.45%, an increase in oil price has a negative impact on oil exporters’ exchange rate. We also re-explore the causality between the USD real exchange rate and the oil price, showing that the causality between the two variables has changed over the period under study. Finally, we investigate how the Fed monetary policy may impact the oil currency – oil price relationship, and find evidence to support that the US policy rate is a key to understand oil currencies movements. |
| Keywords: | Oil price; Oil currencies; Non-linearities |
| JEL: | C33 F31 Q43 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2014-53&r=ene |
| By: | Farren, Michael D. |
| Abstract: | Recent drilling innovations allowing access to unconventional resources like tight oil and shale gas have spurred a number of drilling booms around the United States. One side effect is rising housing prices caused by migrating oil and gas industry workers who create a positive housing demand shock. Initial research has examined the effect of these shale drilling booms on rental prices and home valuations, but thus far the effect of the price signal on housing supply has not been investigated. Using two-way fixed effects estimators I analyze the effect of shale drilling operations on population, home and hotel construction in the Marcellus, Bakken and Fayetteville Shale regions, finding that a housing boom accompanies the drilling boom. The size of the impact tends to increase as the considered region becomes more rural and remote. |
| Keywords: | Natural Resources, Hydraulic Fracturing, Shale Gas, Housing Supply, Boomtown, Community/Rural/Urban Development, Resource /Energy Economics and Policy, Q3, Q4, R1, O1, |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170644&r=ene |
| By: | Verónica Acurio Vasconez (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne); Gaël Giraud (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); Florent Mc Isaac (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne); Ngoc Sang Pham (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne) |
| Abstract: | The economic implications of oil price shocks have been extensively studied since the oil price shocks of the 1970s'. Despite this huge literature, no dynamic stochastic general equilibrium model is available that captures two well-known stylized facts: 1) the stagflationary impact of an oil price shock, together with 2) two possible reactions of real wages: either a decrease (as in the US) or an increase (as in Japan). We construct a New-Keynesian DSGE model, which takes the case of an oil-importing economy where oil cannot be stored and where fossil fuels are used in two different ways: One part of the imported energy is used as an additional input factor next to capital and labor in the intermediate production of manufactured goods, the remaining part of imported energy is consumed by households in addition to their consumption of the final good. Oil prices, capital prices and nominal government spendings are exogenous random processes. We show that, without capital accumulation, the stagflationary effect is accounted for in general, and provide conditions under which a rise (resp. a declinr) of real wages follows the oil price shock. |
| Keywords: | New-Keynesian model; DSGE; oil; capital accumulation; stagflation |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00827666&r=ene |
| By: | Harrison Fell (Division of Economics and Business, Colorado School of Mines); Daniel T. Kaffine (Department of Economics, University of Colorado) |
| Abstract: | Since 2007, coal-fired electricity generation in the US has declined by a stunning 25%. At the same time, natural gas-fired generation and wind generation have dramatically increased due to technological advances and policy interventions. We examine the joint impact of natural gas prices and wind generation on coal generation, with a particular focus on the interaction between low natural gas prices and increased wind generation. Exploiting detailed daily unit-level data, we estimate the response of coal-fired generation across four transmission regions within the US. Low natural gas prices and increased wind generation have both led to reductions in coal-fired generation. Furthermore, we find evidence that the interaction between natural gas prices and wind generation is statistically and economically significant, and led to a greater reduction in coal-fired generation than would be explained by either factor alone. In some regions, marginal responses of coal-fired generation to natural gas prices in 2013 were several times what they would have been had wind generation remained at 2008 levels. Similar sensitivities were found for responses to wind generation. As a consequence, our results suggest that policies such as carbon pricing combined with those that increase wind generation would be complementary in terms of their impact on coal-fired generation. |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:mns:wpaper:wp201410&r=ene |
| By: | Hunt Allcott; Daniel Keniston |
| Abstract: | Does natural resource production benefit producer economies, or does it instead create a "Natural Resource Curse," perhaps as Dutch Disease crowds out the manufacturing sector? We combine a new panel dataset of oil and gas production and reserves with county-level aggregate outcomes and restricted-access Census of Manufactures microdata to estimate how oil and gas booms have affected local economic growth in the U.S. since the 1960s. We find that a boom that doubles national oil and gas employment increases total employment by 2.9 percent in a county with one standard deviation larger oil and gas endowment. Despite substantial migration, wages also rise. Notwithstanding, manufacturing employment and output are actually pro-cyclical with oil and gas booms, because many manufacturers in resource-abundant counties supply inputs to the oil and gas sector, while many others sell locally-traded goods and benefit from increases in local demand. Manufacturers' revenue productivity also grows during booms, especially in linked and local industries, but there is no evidence that output prices rise. The results demonstrate how a meaningful share of manufacturers produce locally traded goods, and they highlight how linkages to natural resources can be a driver of manufacturing growth. |
| JEL: | J2 L6 O4 Q43 R1 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20508&r=ene |
| By: | Gaudet, Gérard; Salant, Stephen (Resources for the Future) |
| Abstract: | The purpose of this chapter is to provide an elementary introduction to the nonrenewable resource model with multiple demand curves. The theoretical literature following Hotelling (1931) assumed that all energy needs are satisfied by one type of resource (e.g. “oil"), extractible at different per-unit costs. This formulation implicitly assumes that all users are the same distance from each resource pool, that all users are subject to the same regulations, and that motorist users can switch as easily from liquid fossil fuels to coal as electric utilities can. These assumptions imply, as Herfindahl (1967) showed, that in competitive equilibrium all users will exhaust a lower cost resource completely before beginning to extract a higher cost resource: simultaneous extraction of different grades of oil or of oil and coal should never occur. In trying to apply the single- demand curve model during the last twenty years, several teams of authors have independently found a need to generalize it to account for users differing in their (1) location, (2) regulatory environment, or (3) resource needs. Each research team found that Herfindahl's strong, unrealistic conclusion disappears in the generalized model; in its place, a weaker Herfindahl result emerges. Since each research team focussed on a different application, however, it has not always been clear that everyone has been describing the same generalized model. Our goal is to integrate the findings of these teams and to exposit the generalized model in a form which is easily accessible. |
| Keywords: | Climate, Energy, Transportation, Waste Management |
| Date: | 2014–07–31 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-14-21&r=ene |
| By: | Daniel Huppmann; Franziska Holz |
| Abstract: | Climate change mitigation and the transformation to a global low-carbon economy is a pressing issue in policy discussions and international negotiations. The political debate is supported by the scientific community with a large number of projections, pathway simulations and scenario analyses of the global energy system and its development over the next decades. These studies are often based on numerical economy-energy-environment-climate models. This DIW Roundup provides an overview of the model types used in the academic arena to evaluate and quantify the potential impacts of energy and climate policy measures. Their aim is to translate specific mitigation pathways into an economic and socio-political assessment, in order to identify trade-offs between different mitigation options. Since no single modelling framework can adequately capture all relevant aspects, a comprehensive assessment requires a mix of models and approaches. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwrup:44en&r=ene |
| By: | Khanna, Madhu; Louviere, Jordan; Yang, Xi |
| Keywords: | Energy Crops, Contracts, Environmental Economics and Policy, Q42, Q51, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:169970&r=ene |
| By: | Sébastien Houde; Joseph E. Aldy |
| Abstract: | The effectiveness of investment subsidies depends on the existing array of regulatory and information mandates, especially in the energy efficiency space. Some consumers respond to information disclosure by purchasing energy-efficient durables (and thus may increase the inframarginal take-up of a subsequent subsidy), while other consumers may locate at the lower bound of a minimum efficiency standard (and a given subsidy may be insufficient to change their investment toward a more energy-efficient option). We investigate the incremental impact of energy efficiency rebates in the context of regulatory and information mandates by evaluating the State Energy Efficient Appliance Rebate Program (SEEARP) implemented through the 2009 American Recovery and Reinvestment Act. The design of the program -- Federal funds allocated to states on a per capita basis with significant discretion in state program design and implementation -- facilitates our empirical analysis. Using transaction-level data on appliance sales, we show that most program participants were inframarginal due to important short-term intertemporal substitutions where consumers delayed their purchases by a few weeks. We find evidence that some consumers accelerated the replacement of their old appliances by a few years, but overall the impact of the program on long-term energy demand is likely to be very small. Our estimated measures of cost-effectiveness are an order of magnitude higher than estimated for other energy efficiency programs in the literature. We also show that designing subsidies that reflect, in part, underlying attribute-based regulatory mandates can result in perverse effects, such as upgrading to larger, less energy-efficient models. |
| JEL: | H31 Q4 Q48 Q58 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20541&r=ene |
| By: | Eleftheria Vasileiadou; Boukje Huijben; Rob Raven |
| Abstract: | TThere is a huge gap between demand and supply of finance for energy transitions, and the financial and economic crisis have had a negative impact in the already meagre funds for transforming the energy system towards renewable resources. In this paper we explore whether crowdfunding can provide an adequate business model for the creation, nurturing and upscaling of renewable energy niches. We empirically investigate crowdfunding initiatives and platforms linked to renewable electricity projects in the Netherlands. The main conclusion is that the volume of crowdfunding today is low, but the dynamic of these projects holds potential. There is limited indication of learning processes until now, as well as limited support from regime actors, pointing at a low level of niche stabilization and break-through potential, which may however be related to the early stage of development of crowdfunding in the Netherlands. On the other hand, the heterogeneity of crowdfunders is very promising. Platforms dedicated to renewable electricity exclusively, and with an investment based business model seem to be the most successful. We show how governmental market regulation and support mechanisms are shaping crowdfunding as a business model, and discuss the implications for other countries. |
| Keywords: | renewable energy, crowdfunding, sustainability transitions, business models, up-scaling |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:ein:tuecis:1410&r=ene |
| By: | Yu SHENG (Australian National University); Yanrui WU (University of Western Australia); Xunpeng SHI (National University of Singapore); Dandan ZHANG (Peking University) |
| Abstract: | As This paper uses the data envelope analysis method to investigate the Malmquist index-based gravity relationship between bilateral energy trade flows and their determinants throughout the world. Using a balance panel data of 40 countries between 1995 and 2008, this paper shows that market integration will increase energy trade by improving trade efficiency between trade partners, though allowing for a flexible substitution between different energy products tends to weaken these effects. This result highlights cross-product substitution and its implications for the aggregate energy trade pattern, providing insights on the importance of prioritising product-specific trade facilitating policies. |
| Keywords: | energy trade efficiency, energy market integration, Malmquist index; energy trade efficiency, energy market integration, Malmquist index |
| JEL: | Q27 Q47 O47 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2014-20&r=ene |
| By: | Baldi, Lucia; Peri, Massimo; Vandone, Daniela |
| Abstract: | In the last few years Rare Earth Materials (REMs) prices have experienced a strong increase, due to geopolitical policies and sustainability issues. Provided that these materials at risk of supply disruptions are largely employed in the development of new technologies - such as clean energy industries - financial markets may already have included these concerns into clean energy companies evaluation. We use a multifactor market model for the period January 2006-September 2012 to analyse the impact of REMs price changes – specifically Dysprosium and Neodymium - to six clean energy indexes (NYSE-BNEF) tracking the world’s most active quoted companies in the clean energy sector. Results show that during period of price increase there is a negative relation between REMs price changes and the stock market performance of clean energy indexes, specifically wind. The European clean energy index is also negatively affected and this may be relevant to policy makers considering that Europe is putting in place some relevant policy actions to support the development of the clean energy sector. |
| Keywords: | Clean energy, rare earth materials, stock prices, Agribusiness, Agricultural and Food Policy, Financial Economics, Food Consumption/Nutrition/Food Safety, Production Economics, Risk and Uncertainty, Q56, Q33, G11, C58, E39, |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iefi13:164750&r=ene |
| By: | Chalak, Morteza; Pannell, David |
| Keywords: | Climate change, threshold, carbon tax, global warming, dynamics, Environmental Economics and Policy, Risk and Uncertainty, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:169844&r=ene |
| By: | Chang, Charles W. |
| Abstract: | The effects of anthropogenic greenhouse gas emission to climate change are uncertain; how does this uncertainty affect the optimal carbon abatement policy? Tackling this classic problem is challenging; not only does it require integrated assessment analyses that consolidate an adequate representation of both climate and economy, but also a sensible understanding of hedging incentives and decision making under uncertainty. In the Integrated Assessment Model (IAM) community, this representation is severely restricted by computational burdens and model intractability (Webster, Santen, and Parpas, 2012). I provide a minimal framework that relies on the transparency of mathematical programming, to assess precautionary mitigation as a means to hedge against the risk and uncertainty of climate catastrophes. The scope of the paper encompasses the following: assessment of optimal abatement under parameter uncertainty and endogenous learning; decomposition of optimal abatement with respect to mitigatory incentives; assessment of policy sensitivity to assumed distributions of uncertain temperature thresholds. I introduce DICESC, a multistage stochastic control version of Nordhaus’ DICE model to demonstrate that policy optimization in which the hazard rates of climate catastrophes can be controlled significantly increases incentives for precautionary abatement. Despite the drastic level increase in precautionary abatement the proposed formulation achieves, I stress the importance of understanding the distributive properties of uncertainty for the robust assessment of optimal policy. |
| Keywords: | Climate Change, Catastrophes, Integrated Assessment Models, Stochastic Control, Environmental Economics and Policy, Risk and Uncertainty, Q50, Q54, Q58, D58, D81, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170831&r=ene |
| By: | Lade, Gabriel; Lin, C.-Y. Cynthia; Smith, Aaron |
| Abstract: | Tradeable credits are a central component of many market-based regulations. Whenever the market for compliance credits is efficient and policies are enforced over time, credit prices should reflect both current and expected future discounted marginal compliance costs, which are a function of both expected future market conditions and policy environments. We study credit prices for a relatively recent policy, the market for Renewable Identification Numbers (RINs) under the Renewable Fuel Standard (RFS2). We provide a comprehensive study of RIN markets. Due to the dynamic nature of the program and the feature that credits can be banked and borrowed over time, we specify the first dynamic model of an industry facing a RFS2 to highlight the importance of expectations in driving current RIN prices. We then provide a test of market efficiency, and study historical cost drivers of prices. We find encouraging signs of a maturing over-the-counter market for RINs. Historically, the largest drivers of prices in the program has been policy announcements. We estimate that one particular announcement, the 2013 final rule, was responsible for between a \$10.3 and \$20.7 billion reduction in support the RFS2 provides for the US biofuel industry. The findings call into question the efficacy of using quantity based mechanisms such as the RFS2 to drive innovation and investments in new production technologies, particularly when the regulator faces a classical problem of dynamically inconsistent responses to increases in compliance costs. |
| Keywords: | Renewable Fuel Standard, Tradeable credits, Market Efficiency, Public Economics, Resource /Energy Economics and Policy, Q50, Q42, H23, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170673&r=ene |
| By: | Datta, Deepa Dhume (Board of Governors of the Federal Reserve System (U.S.)); Londono, Juan M. (Board of Governors of the Federal Reserve System (U.S.)); Ross, Landon J (Board of Governors of the Federal Reserve System (U.S.)) |
| Abstract: | We investigate the informational content of options-implied probability density functions (PDFs) for the future price of oil. Using a semiparametric variant of the methodology in Breeden and Litzenberger (1978), we investigate the fit and smoothness of distributions derived from alternative PDF estimation methods, and develop a set of robust summary statistics. Using PDFs estimated around episodes of high geopolitical tensions, oil supply disruptions, and macroeconomic data releases, we explore the extent to which oil price movements are expected or unexpected, and whether agents believe these movements to be persistent or temporary. |
| Keywords: | Options-implied PDFs; futures; options; oil |
| JEL: | C13 G13 G14 |
| Date: | 2014–10–29 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgif:1122&r=ene |
| By: | Spurlock, C. Anna |
| Abstract: | I derive and test predictions from the classic Mussa and Rosen (1978) second-degree price discrimination model using data from the United States clothes washer market. I find evidence consistent with price discrimination in the market response to energy efficiency policy changes. Concurrent with the effective dates of both the new 2004 and 2007 federal minimum efficiency and ENERGY STAR standards, within-model clothes washer prices dropped on average. The heterogeneous pattern of price reduction across market segments, and adjustments in the menu of products, were consistent with predictions from the price-discrimination model, and not with a perfectly competitive market. |
| Keywords: | Price discrimination, minimum performance standards, energy efficiency, Consumer/Household Economics, Research Methods/ Statistical Methods, D43, L51, Q48, |
| Date: | 2014–07–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:180235&r=ene |
| By: | Qiu, Feng; Zhao, Jieyuan |
| Abstract: | Rich empirical literature has investigated the price transmission among spatially separated and vertically linked markets. In this study, we fill a gap in the price transmission literature by investigating extreme dependence that allows varying general dependence structure between extreme and non-extreme market conditions (through mixed copula functions), and changing degree of co-movements (through time-varying dependence parameters for any given copula functions). Our work is a combination and generalization of time-varying attributes with the mixture model idea. The data used for the analysis are weekly prices for US crude oil, ethanol, and corn from Jan 2000 through December 2013. Our results demonstrate that time-varying attributes in extreme price co-movements can result from many reasons such as government interventions, financial contagion, disease outbreaks, and altering consumer tastes. It is thus a useful extension and generalization of existing approaches for modeling price transmission that has appeared in the literature. |
| Keywords: | price transmission, mixed copula, food price, energy price, Research Methods/ Statistical Methods, Risk and Uncertainty, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170119&r=ene |
| By: | Randy Chugh; Maureen L. Cropper |
| Abstract: | We estimate a model of vehicle choice and miles driven to analyze the impact of fuel conservation policies in the Indian car market. Taxing diesel fuel to equalize diesel and petrol prices would reduce fuel consumption in the new car market by 7% and reduce diesel cars sales by 26%. A tax on diesel cars with the same sales impact would reduce fuel consumption by only 2%. The compensating variation per liter of fuel saved is smaller for the fuel tax than for the car tax; however, the car tax has lower deadweight loss per liter of fuel saved. Our estimates of the long-run elasticities of fuel consumption with respect to fuel prices imply that the CAFE standards contemplated by the Indian government would generate a significant rebound effect. Projected fuel savings are 20% if consumers do not adjust to the change in operating costs and less than 9% once consumers adjust. |
| JEL: | L9 Q48 R48 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20460&r=ene |
| By: | McCarty, Tanner; Sesmero, Juan |
| Abstract: | The present study formalizes and quantifies the importance of uncertainty, irreversibility, and managerial flexibility for investment in a corn-stover based cellulosic biofuel plant. Using a real options model, we recover prices of gasoline that would trigger entry into the market and compare it to breakeven entry price (long run average cost). Our analysis shows that the price premium (above breakeven) likely to be required by investors to enter the market due to the uncertain and irreversible nature of investment is substantial. Managerial flexibility (embedded by the option of mothballing and reactivating the plant) does not sensibly reduce the entry premium. Results also suggest that price volatility may greatly increase hysteresis (i.e. a range of gasoline prices for which there is neither entry nor exit in the market) in firm behavior and decrease supply elasticity. In combination all of these results suggest that, 1) policies supporting second generation biofuels may have fell short of their targets because of their failure to alleviate price uncertainty, and 2) the use of price-based instruments such as reverse auctions, either in isolation or in combination with mandates, may be warranted. |
| Keywords: | Resource /Energy Economics and Policy, Risk and Uncertainty, |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:179201&r=ene |
| By: | Olmstead, Sheila (Resources for the Future); Richardson, Nathan (Resources for the Future) |
| Abstract: | Booming production of oil and gas from shale, enabled by hydraulic fracturing technology, has led to tension between hoped-for economic benefits and feared environmental and other costs, with great associated controversy. Study of how policy can best react to these challenges and how it can balance risk and reward has focused on prescriptive regulatory responses and, to a somewhat lesser extent, voluntary industry best practices. While there is undoubtedly room for improved regulation, innovative tools are relatively understudied. The liability system predates environmental regulation yet still plays an important—and in some senses predominant—role. Changes to that system, including burden-shifting rules and increased bond requirements, might improve outcomes. Similarly, new regulation can and should incorporate modern understanding of the benefits of market-based approaches. Information disclosure requirements can benefit the liability system and have independent benefits of their own. Policymakers faced with a need for policy change in reaction to shale development should carefully consider alternatives to regulation and, when regulation is deemed necessary, consider which tool is best suited. |
| Keywords: | shale, shale gas, liability, market-based tools, burden shifting, information |
| Date: | 2014–07–18 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-14-15&r=ene |
| By: | Christoph Böhringer (University of Oldenburg, Department of Economics); Nicholas Rivers (University of Ottawa); Hidemichi Yonezawa (University of Ottawa) |
| Abstract: | We show that imposition of a state-level environmental tax in a federation crowds out preexisting federal taxes. We explain how this vertical fiscal externality can lead unilateral statelevel environmental policy to generate a welfare gain in the implementing state, at the expense of other states. Using a computable general equilibrium model of the Canadian federation, we show that vertical fiscal externalities can be the major determinant of the welfare change following environmental policy implementation by a state government. Our numerical simulations indicate that - as a consequence of vertical fiscal externalities - state governments can reduce greenhouse<br>gas emissions by over 20 percent without any net cost to themselves. |
| Keywords: | fiscal externality, climate policy, federalism, computable general equilibrium |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:old:dpaper:370&r=ene |
| By: | Thai-Thanh Dang; Annabelle Mourougane |
| Abstract: | Now that pollution is reaching worrisome levels in some countries and at the global level, there is a growing consensus that it needs to be explicitly considered as a by-product of the production process and incorporated in economic decisions. But this is not easy in the absence of markets and observable prices. Shadow prices of pollution, the opportunity cost of abating pollution in the form of reduced output, have to be estimated using specific techniques and serve several purposes. It’s a signal firms have to take into consideration when they decide upon their investment decisions. Shadow prices can also inform policymakers when they set policies. They can be used to assess policy ex ante by comparing the marginal benefits of environment policies with the cost they involve for private firms. These prices can be seen as benchmark for allowance price in emission market-based schemes or can be useful in designing optimal environmental tax schemes. The indicator can also be used ex post and can be considered as a policy indicator of pollution regulation and compliance to these regulations. More generally such prices are used each time there is a need to value pollution... |
| Date: | 2014–08–21 |
| URL: | http://d.repec.org/n?u=RePEc:oec:envddd:2014/2-en&r=ene |
| By: | Toman, Michael |
| Abstract: | Information on ecosystem characteristics as well as economic statistics is needed to more fully inform decision makers on the impacts of climate change on human well-being. Climate change risks involve potentially large and irreversible as well as highly uncertain impacts that need to be evaluated with information that complements cost-benefit analysis. Information on the irreversibility of impacts also is relevant for evaluating implications for intergenerational equity. In addition, climate change is subject to a large degree of Knightian uncertainty, making it useful to understand how individuals perceive and evaluate climate change risks. |
| Keywords: | Climate Change Economics,Environmental Economics&Policies,Climate Change Mitigation and Green House Gases,Science of Climate Change,Biodiversity |
| Date: | 2014–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7094&r=ene |
| By: | Purkus, Alexandra; Gawel, Erik; Deissenroth, Marc; Nienhaus, Kristina; Wassermann, Sandra |
| Abstract: | Mit dem EEG 2012 wurde die gleitende Marktprämie in das Förderregime der erneuerbaren Energien zunächst als Option eingeführt. Das EEG 2014 baut diesen Ansatz durch verpflichtende Direktvermarktung weiter aus, ohne die Grundstruktur der Prämie anzutasten. Mit dem Instrument verbinden sich hohe Erwartungen an Kostensenkungen, die durch eine Steigerung der Vermarktungseffizienz und eine verstärkte Bedarfsorientierung von erneuerbaren Energien erzielt werden sollen. Der Beitrag wertet die bisherigen Erfahrungen mit der Marktprämie aus und geht der Frage nach, welche Effizienzgewinne durch die Weiterentwicklung im EEG 2014 realistisch sind. Das Inkrafttreten des EEG 2014 markiert einen Zwischenschritt in der Debatte um die Weiterentwicklung des Förderregimes für erneuerbare Energien (EE) im Stromsektor. Einen zentralen Kritikpunkt, der mit der EEG-Reform adressiert werden sollte, stellen die als zu hoch empfundenen Kosten des EE-Ausbaus dar; dies betrifft nicht nur die Höhe der von (nichtprivilegierten) Stromverbrauchern zu tragenden EEG-Umlage, sondern auch die weiter gefasste Transformationskosten des Stromsystems, die durch eine verstärkte Ausrichtung der EE an marktlichen und systemischen Knappheitssignalen gesenkt werden sollen [1]. Eine verstärkte Marktintegration der Erneuerbaren wird vom Gesetzgeber als ein wichtiger Lösungsbeitrag zu beiden Problemdimensionen betrachtet und bildet daher einen zentralen Bestandteil der Reformbemühungen (§ 2 EEG 2014). |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ufzdps:212014&r=ene |
| By: | Voosholz, Frauke |
| Abstract: | In this paper we discuss the influence of using different production functions on modeling the resource extraction rates and economic growth. The focus is set on the modeling of the production sector, which requires either non-renewable resources, renewable resources or a combination of both resources for production. There are great differences between the possible assumptions when modeling the substitution process between the different input factors. It is shown that the existence of an optimal extraction rate in conjunction with economic growth depends on the specification of the production function even if the same parameterization is used. The target is to provide an overview on the different possibilities of modeling, and to support the decision which kind of production function should be used for modeling different aspects of economic growth. |
| Keywords: | economic growth,natural resources,production function |
| JEL: | E23 O13 O41 O40 Q20 Q32 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cawmdp:72&r=ene |
| By: | Tetsuji Okazaki (Faculty of Economics, The University of Tokyo) |
| Abstract: | In the late 1940s, the Japanese economy transited to a market economy from an economy under the government planning and control, which had continued since the period of the Sino-Japanese War. This paper explored the impact of the transition on the micro-aspect of the economy, focusing on the coal mining industry. By comparing productivity of coal mines before and after the transition, we found that the price control indeed hurt the incentive for coal mines, in particular relatively efficient ones, to enhance productivity. |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:tky:jseres:2014cj263&r=ene |
| By: | Maximilian Mueller (WHU–Otto Beisheim School of Management); Denis Schweizer (Concordia University); Volker Seiler (University of Paderborn) |
| Abstract: | The strategic importance of rare earth elements (REEs) has become increasingly important because of their relative scarcity and worldwide increasing demand, as well as China’s quasi-monopoly of this market. REEs are virtually not substitutable, and they are essential for a variety of high-tech products and modern key technologies. This has raised serious concerns that China will misuse its dominant position to set export quotas in order to maximize its own profits at the expense of other rare earth user industries (e.g., the wealth transfer motive). In fact, export restrictions on REEs were the catalyst for the U.S. to lodge a formal complaint against China in 2012 at the WTO. This paper analyzes possible wealth transfer effects by focusing on export quota announcements (so-called MOFCOM announcements) by China, and then calculating share price reactions for Chinese REE suppliers, U.S. REE users, and the rest of the world REE refiners. The results of the multivariate regression analyses do not support the view of a wealth transfer in connection with the MOFCOM announcements. This suggests that export quotas may be viewed more as a public scapegoat, and have limited influence on markets. We find instead that extreme REE price movements should be the topic of concern, as they have a significant impact on share prices for all companies in the REE industry. |
| Keywords: | Announcement Effects, Event Study, Rare Earths Elements, WTO |
| JEL: | F13 F52 G14 Q31 Q34 Q37 Q38 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:pdn:ciepap:86&r=ene |