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on Energy Economics |
| By: | James Fenske |
| Abstract: | Oil prices experienced in early life predict differential adult outcomes across Nigerian ethnic groups. Our difference-in-difference approach compares members of southern ethnicities to other Nigerians from the same birth cohort. Greater prices in a southern individual's birth year predict positive relative outcomes, including reduced fertility, delayed marriage, higher probabilities of working and having a skilled occupation, and greater schooling. By contrast, health outcomes suffer, including reduced height and increased BMI. These microeconomic impacts can be explained by macroeconomic responses to greater oil prices. Relative Southern incomes increase, food production declines, maternal labor intensifies and Southern conflict rises. |
| Keywords: | Commodity prices, conflict, early life, ethnicity, Nigeria |
| JEL: | I12 I15 O12 |
| Date: | 2015–01–02 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:wps/2015-02&r=ene |
| By: | Rabah Arezki; Valerie A. Ramey; Liugang Sheng |
| Abstract: | This paper explores the effect of news shocks on the current account and other macroeconomic variables using worldwide giant oil discoveries as a directly observable measure of news shocks about future output - the delay between a discovery and production is on average 4 to 6 years. We first present a two-sector small open economy model in order to predict the responses of macroeconomic aggregates to news of an oil discovery. We then estimate the effects of giant oil discoveries on a large panel of countries. Our empirical estimates are consistent with the predictions of the model. After an oil discovery, the current account and saving rate decline for the first 5 years and then rise sharply during the ensuing years. Investment rises robustly soon after the news arrives, while GDP does not increase until after 5 years. Employment rates fall slightly for a sustained period of time. |
| Keywords: | news shocks, curent account, saving, investment, employment, oil, discovery |
| JEL: | E00 F3 F4 |
| Date: | 2015–01–12 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:oxcarre-research-paper-153&r=ene |
| By: | Andrew Sharpe; Bert Waslander |
| Abstract: | The objective of this report is to evaluate the impact of the oil and gas industry on labour productivity growth in Canada since 2000 through an exploration of the various channels, both direct and indirect, by which the oil and gas sector affects aggregate productivity. The report sheds light on the paradoxical lack of a direct negative contribution of the oil and gas sector to aggregate labour productivity growth despite the very large fall in productivity experienced by the sector. It highlights the divergent productivity growth paths for the oil and gas sectors in Alberta and Newfoundland and Labrador, which drove the aggregate productivity performance of these two provinces. The report also discusses how developments in the oil and gas industry, notably the increase in the price and production of petroleum, have affected productivity growth in other parts of the economy. It finds that the oil boom has had a substantial negative effect on the cost competitiveness of manufacturing by putting upward pressure on the value of the Canadian dollar – the so-called Dutch Disease. Counteracting this are positive effects associated with demand and incomes generated by the oil boom, as well as increases in spending on R&D and education by the major oil-producing provinces. |
| Keywords: | Canada, Oil Boom, Oil, Natural Gas, Energy Sector, Labour Productivity, Dutch Disease, Alberta, Newfoundland, Labrador, Oil and Gas Industry, Productivity Growth, Productivity |
| JEL: | J24 O47 O51 N72 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:sls:resrep:1405&r=ene |
| By: | Samuel Wills |
| Abstract: | This paper studies how capital-scarce countries should manage volatile resource income. Existing literature recommends that capital-scarce countries invest domestically, but that volatile resource income should be saved in a foreign sovereign wealth fund. I reconcile these by combining a stochastic model of precautionary savings with a deterministic model of a capital-scarce resource exporter. I show that capital-scarce countries should still establish a Volatility Fund, but it should be relaively smaller than in capital-abundant countries. The fund should be built before anticipated windfalls, partially invested domestically, and used as a source of income rather than a buffer against temporary shocks. To do so I develop a parsimonious framework that nests a variety of existing results as special cases, which are presented in seven principles. The first three apply to capital-abundant countries: i) Smooth consumption using a Future Generations Fund; (ii) Build a Volatility Fund quickly, then leave it alone; iii) Invest to stabilise the real exchange rate. The remaining four apply to capital-scare countries; iv) Finance consumption and investment with oil; v) Use a temporary Parking Fund to improve absorption, vi) Invest part of the Volatility Fund domestically; and vii) Support private investment. |
| Keywords: | Natural resources, oil, volatility, precautionary saving, capital scarcity, anticipation |
| JEL: | D81 D91 E21 F34 H63 O13 Q32 Q33 |
| Date: | 2015–01–26 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:oxcarre-research-paper-154&r=ene |
| By: | Brock Smith |
| Abstract: | This paper examines the impact of the oil price boom in the 1970s and the subsequent bust on non-oil economic activity in oil-department countries. During the boom, manufacturing value added and exports increased significantly relative to non-oil dependent countries, along with wages, employment and investment. These measures decreased, though to a lesser extent, during the bust, displaying a positive relationship with oil prices. In contrast with the Dutch Disease model, exportable manufacturing sectors grew faster than non-exportable ones. However, exports of non-hydrocarbon natural resources and agricultural products displayed a strongly negative relationship to prices. The results suggest a push towards industrialization induced by the oil revenue windfall. |
| Date: | 2014–03–05 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:oxcarre-research-paper-133&r=ene |
| By: | Congressional Budget Office |
| Abstract: | Energy savings performance contracts (ESPCs) allow federal agencies to finance investments in energy-efficient equipment through private vendors, using anticipated reductions in energy costs to pay for investments over time. Given constraints on discretionary appropriations, ESPCs may help agencies to invest in energy-efficient equipment and reduce energy costs. However, compared with paying for such investments up front with appropriated funds, such contracts result in greater financing costs to the government. |
| JEL: | Q40 Q55 |
| Date: | 2015–02–05 |
| URL: | http://d.repec.org/n?u=RePEc:cbo:report:49869&r=ene |
| By: | Riadh Aloui (LAREQUAD & FSEGS, University of Sousse, Tunisia); Rangan Gupta (Department of Economics, University of Pretoria); Stephen M. Miller (Department of Economics, University of Nevada, Las Vegas, USA) |
| Abstract: | We use a copula approach to investigate the effect of uncertainty on crude-oil returns. Using copulas to construct multivariate distributions of time-series data permit the calculation of the dependence structure between the series independently of the marginal distributions. Further, we implement the copula estimation using a rolling window method to allow for a time-varying effect of equity and economic policy uncertainty on oil returns. The results show that higher uncertainty, as measured by equity and economic policy uncertainty indices, significantly increase crude-oil returns only during certain periods of time. That is, we find a positive dependence prior to and into the financial crisis and Great Recession, Interestingly, estimation of the copula over the entire sample period leads to a negative dependence between the equity and economic policy indices and the crude-oil return. |
| Keywords: | Uncertainty, oil shocks, copulas |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:201503&r=ene |
| By: | Mohammad Reza Farzanegan (University of Marburg); Mohammad Mohammadikhabbazan (Tarbiat Moddaress University); Hossein Sadeghi (Tarbiat Moddaress University) |
| Abstract: | We examine the macroeconomic and household welfare consequences of oil sanctions in Iran. We use social accounting matrix (SAM) and develop a computable general equilibrium (CGE) model to simulate selected scenarios in which the exportation of oil from Iran to the rest of the world is banned. Our main results show that higher income households are losing more significantly under oil sanctions. Total imports, exports, private consumption, and GDP fall in response to oil sanctions. Interesting is the increase of net indirect taxes at the time of oil revenues fall. Real exchange rate appreciates in the oil sanction crisis. In addition, labor income increases while the capital income falls in response to oil sanctions in Iran. These simulations are in line with reality of the Iranian economy in post-oil sanction period. |
| Keywords: | oil, sanctions, CGE model, social accounting matrix, Iran |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:201507&r=ene |
| By: | Kelsey, Timothy; Partridge, Mark; White, Nancy |
| Abstract: | This paper examines the economic experience of past energy booms and of current unconventional shale gas and oil development. It focuses on key economic characteristics of gas and oil development, such as its employment potential, the geography of such development, its boom-bust nature, and the economic experience with shale oil and gas development. This background is used to discuss important economic policy issues arising with unconventional oil and gas development, such as taxation, governmental use of those revenues, preemption, and equity in the distribution of costs and benefits. The paper concludes with economic policy recommendations for states and communities affected by such development. |
| Keywords: | economic impact; Marcellus shale; Bakken shale; natural gas |
| JEL: | L71 R11 R12 |
| Date: | 2014–02–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:62154&r=ene |
| By: | Ujjayant Chakravorty; Martino Pelli; Beyza Ural Marchand |
| Abstract: | This paper estimates the returns to household income due to improved access to electricity in rural India. We examine the effect of connecting a household to the grid and the quality of electricity, defined as hours of daily supply. The analysis is based on two rounds of a representative panel of more than 10,000 households. We use the district-level density of transmission cables as instrument for the electrification status of the household. We find that a grid connection increases non-agricultural incomes of rural households by about 9 percent during the study period (1994-2005). However, a grid connection and a higher quality of electricity (in terms of fewer outages and more hours per day) increases non-agricultural incomes by about 28.6 percent in the same period. |
| Keywords: | Electricity Supply, Quality, India, Energy and Development, Infrastructure |
| JEL: | O12 O18 Q48 |
| URL: | http://d.repec.org/n?u=RePEc:tuf:tuftec:0804&r=ene |
| By: | Estiri, Hossein |
| Abstract: | This paper re-conceptualizes the planning process in the big data era based on the improvements that non-linear modeling approaches provide over the mainstream linear approaches. First, it demonstrates challenges of conventional linear methodologies in modeling complexities of residential energy use, addressing the “variety” from the three Vs of big data. Suggesting a non-linear modeling schema to analyze household energy use, the paper develops its discussion around the repercussions of the use of non-linear modeling in energy policy and planning. Planners / policy-makers are not often equipped with the tools needed to translate complex scientific outcomes into policies. To fill this gap, this work proposes modifications in the traditional planning process in order to be able to benefit from the abundance of data and the advances in analytical methodologies. The conclusion section introduces three short-term repercussions of this work for energy policy (and planning, in general) in the big data era: tool development, data infrastructures, and planning education. |
| Keywords: | Energy Policy,Residential Buildings,Non-Linear Modeling,Big Data,Planning Process |
| JEL: | Q4 Q5 R21 C3 C54 O21 |
| Date: | 2014–08–12 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esconf:106936&r=ene |
| By: | Kvasnicka, Michael; Bauer, Thomas K.; Braun, Sebastian |
| Abstract: | The Fukushima Daiichi accident in Japan in March 2011 caused a fundamental change in Germanys energy policy which led to the immediate shut down of nearly half of its nuclear power plants. Using data from Germanys largest internet platform for real estate and employing a difference-in-differences approach, we find that Fukushima reduced house prices near nuclear power plants that were in operation before Fukushima by almost 5%. House prices near sites that were shut down right after the accident even fell by 9.7%. Our results suggest that economic reasons are of prime importance for this observed fall in house prices. |
| JEL: | R31 Q48 Q58 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc14:100297&r=ene |
| By: | Dallinger, David; Kohrs, Robert; Mierau, Michael; Marwitz, Simon; Wesche, Julius |
| Abstract: | This paper examines how plug-in electric vehicles can be managed to balance the fluctuation of renewable electricity sources. In this context, different control strategies are introduced. To investigate indirect control via electricity tariffs, an electricity market analysis is conducted of a system with a high share of generation from renewable electricity sources. The analysis uses driving data collected from battery electric and plug-in hybrid vehicles in a research project which means that real charging and driving behavior can be considered. The results show that it is difficult to implement smart charging based on economic arguments because the incentives from day-ahead electricity markets are relatively small. In addition, a novel, autonomous control approach is discussed for plug-in electric vehicles. While measuring the voltage at the grid connection point, plug-in electric vehicles are able to fully independently generate operation schedules that can avoid load peaks and integrate fluctuating power outputs from distributed renewable generation sources. The results reveal that combining indirect, price-based control to consider the system level with autonomous voltage-based control to consider the situation in distribution grids is a very promising control approach that allows electric vehicles to benefit from sustainable renewable generation and avoids load peaks due to simultaneous charging. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fisisi:s42015&r=ene |
| By: | Julie Poirier; Nick Johnstone; Ivan Haščič; Jérôme Silva |
| Abstract: | This paper presents an analysis of the effect of international co-authorship of scientific publications on patenting in wind energy technologies. It is found that the number of scientific publications co-authored by researchers in OECD countries has a positive and very significant impact on the number of wind energy innovations patented in OECD countries. However, non-OECD countries produce a greater number of patent filings when their researchers collaborate with OECD countries. This suggests that there exist knowledge spillovers between OECD and non-OECD countries that particularly benefit non-OECD countries. This empirical finding is important because it strengthens the case for international research cooperation between OECD and non-OECD countries in the area of climate mitigation.<BR>On trouvera dans le présent document une analyse de l’incidence que le co-autorat international de publications scientifiques a sur le brevetage des technologies éoliennes. Il apparaît que le nombre de publications scientifiques rédigées conjointement par des chercheurs de la région OCDE a un impact positif et très significatif sur le nombre des innovations brevetées par les pays membres dans le domaine de l’énergie éolienne. Toutefois, on observe également que les pays non membres sont à l’origine d’un plus grand nombre de demandes de brevets lorsque les chercheurs de ces pays collaborent avec des homologues de pays de l’OCDE. Cela laisse penser qu’un transfert indirect de connaissances s’opère entre les pays membres et non membres de l’OCDE, principalement pour le bénéfice de ces derniers. Cette constatation empirique est importante car elle apporte un argument supplémentaire en faveur de la coopération entre chercheurs des pays membres et non membres de l’OCDE dans le domaine de l’atténuation du changement climatique. |
| Keywords: | knowledge spillovers, climate change mitigation, innovation, scientific collaboration, collaboration scientifique, innovation, atténuation du changement climatique, diffusion des connaissances. |
| JEL: | O3 O31 O38 Q4 Q42 Q48 Q55 |
| Date: | 2015–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:oec:envaaa:81-en&r=ene |
| By: | Dramé, Cheikh |
| Abstract: | The electricity sector in West Africa provides power supply to only about 30% of the population (WAPP, Business Plan 2012 - 2015, 2012). The West African electricity dilemma refers to poor access to electricity due to an amalgamation of constraints primarily emanating from the regulatory environment and the demand and supply side of the electricity sector. This paper reviews the pertinent literatures in order to identify and communicate constraints upon access to electricity in the region, considered low by world standard. In order to alleviate West Africa's electricity dilemma, this paper suggests the pursuit of smart grid opportunities such as off-grid small-scale renewable energy technologies (RETs), smart meters, power line communication, metered-based tariffs and prepayments via mobile phones. The conceptual framework used in this paper integrates interrelated socio/economic aspects, regulatory aspects, financial aspects, and technical aspects deemed fundamental to successfully deploy smart grid technologies in West Africa, with Côte d'Ivoire as a case study. Telecommunications will play a key role in leveraging benefits of smart grid. The next step in this research will be to conduct interviews with stakeholders of the West African electricity sector as a mean to verify the extent to which smart grid opportunities are realizable in the region and enrich what can be learned through secondary research with what can only be learned from those active on the ground. |
| Keywords: | Electricity Access,Electricity Dilemma,Smart Grid,Telecommunications,West Africa |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itsb14:106833&r=ene |
| By: | Orlova, Ekaterina; Hubert, Franz |
| Abstract: | We study the impact of the liberalization of EU natural gas markets on the balance of power between `local champions', customers, and outside producers. We distinguish between two steps of the reform: 1. opening access to transit pipes and 2. opening access to distribution systems, hence customers. Using the Shapley value as a power index, we find a modest and rather heterogeneous impact from the first step. The impact of the second step is much larger and yields a clear pattern: all local champions lose, while all customers and all outside players gain. As one third of the losses of champions within EU leaks to players abroad, current reforms might enhance the dominance of already powerful outside producers. This effect, however, completely vanishes, when network power is assessed with the nucleolus. |
| JEL: | L51 L95 C71 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc14:100474&r=ene |
| By: | Ujjayant Chakravorty (Department of Economics, Tufts University, USA); Marie-Helene Hubert (CREM UMR CNRS 6211, University of Rennes 1, France); Beyza Ural Marchand, (Department of Economics, University of Alberta, Canada) |
| Abstract: | Many countries have adopted energy policies that promote biofuels as a substitute for gasoline in transportation. For instance, more than 40% of U.S. grain is now used for energy and this share is expected to rise under the current Renewable Fuels Mandate. This paper examines the distributional effects of this energy mandate on India using micro-level survey data. First, we use a model with endogenous land use to estimate the effect of the biofuel policy on the world price of selected food commodities - rice, wheat, sugar and meat and dairy, which together provide almost 70% of Indian food calories. Their world prices are predicted to increase between 5% and 11%. Uncertainty in model parameters is incorporated using Monte Carlo techniques that generate standard errors on these price predictions. The effect of these price increases on household welfare is then estimated using data on consumption and wage incomes. We estimate pass-through elasticities from time-series data then compute the negative consumption effects and positive wage impacts under perfect and imperfect pass-through from world to domestic prices. Under perfect pass-through, the mandate leads to a reduction in rural poverty by about 39 million people, and an increase in the number of urban poor by 4 million people. Under imperfect price pass-through, both rural and urban poverty increase by a total of 8 million people. Our study suggests that the US biofuel mandate may lead to modest increase in food prices, but have sizable global welfare impacts, which may differ across rural and urban households. |
| Keywords: | Biofuels, Food Prices, HouseholdWelfare, Renewable Fuel Standards, Poverty |
| JEL: | D31 O12 Q24 Q42 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:tut:cremwp:201501&r=ene |
| By: | Winer, Arthuer; Zhu, Yifang; Paulson, Suzanne |
| Keywords: | Architecture, Arts and Humanities, Education, Social and Behavioral Sciences |
| Date: | 2014–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:uctcwp:qt81f063z9&r=ene |
| By: | Anis Omri; Mohamed Shahbaz; Anissa Chaibi; Christophe Rault |
| Abstract: | The aim of this study is to investigate whether oil consumption, international tourism, environmental quality and political instabilty affect economic growth in 18 MENA countries over the period 1995- 2011using both the static (POLS, FE and RE) and dynamic (Diff-GMM and Sys-GMM) panel data approaches. The empirical results show that the increases in oil consumption and international tourist arrivals are the major drivers of economic growth in MENA countries indicating the presence of energy-led-growth (ELG) and tourism-led-growth (TLG) hypotheses in these countries. We also find that economic growth in MENA countries reacts negatively to the environmental degradation and political instability. These empirical insights are of particular interest to policymakers as they help build sound economic policies to sustain economic development. |
| Keywords: | Economic growth, Static and dynamic panel data, MENA countries. |
| Date: | 2015–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2015-613&r=ene |
| By: | Schöb, Ronnie; Aronsson, Thomas |
| Abstract: | Economic models of climate policy (or policies to combat other environmental problems) typically neglect psychological adaptation to changing life circumstances. People may adapt or become more sensitive, to different degrees, to a deteriorated environment. The present paper addresses these issues in a simple model of tax policy to combat climate change and elaborates on the consequences for optimal climate policies. Furthermore, it argues from a normative point of view that psychological adaptation needs to be taken into account by a pure welfarist government, which aims at internalizing an intertemporal externality. |
| JEL: | D03 D61 H21 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc14:100287&r=ene |
| By: | Habibi, Shiva (KTH); Frejinger, Emma (Université de Montréal); Sundberg, Marcus (KTH) |
| Abstract: | In the car type choice models, alternatives are usually grouped into categories by some of their main characteristics such as make, model, vintage, body type and/or fuel type. Each of these categories contains different versions of the cars that are usually not recognized in the applied literature. In this study we empirically investigate whether including the heterogeneity of these versions in the modeling do matter in estimation and prediction or not. We have detailed data on alternatives available on the market down to the versions level of each model which enables us to account for heterogeneity in the model. We also have Swedish car registry data as demand. We estimate different discrete choice models with different methods of correction for alternative aggregation including nesting structure. We estimate these models on based on year 2006 Swedish registry data for new cars, predict for 2007 and compare the results. The results show that including heterogeneity of cars' versions in the model improves model fitness but it does not necessarily improve prediction results. |
| Keywords: | Aggregate alternatives; Prediction; Car type choice; Discrete choice modeling; Clean vehicles |
| JEL: | R40 |
| Date: | 2015–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ctswps:2015_003&r=ene |
| By: | Sahbi FARHANI; Jaleleddine BEN REJEB |
| Abstract: | This paper studies the relationship between economic growth (GDP) and energy consumption (EC) by using panel data for 95 countries from 1971 to 2008. The World Bank classification helps us to divide our 95 countries into four income groups of countries: low income group, lower-middle income group, upper-middle income group and high income group countries. To specify what matter, we use panel data analysis. The empirical results conclude that panel causality test results reveal that there is a long-run Granger causality running from GDP to EC for low and high income countries and bidirectional Granger causality between GDP and EC for the lower-middle and upper-middle income countries. |
| Keywords: | Economic Growth, Energy Consumption, Panel data analysis |
| JEL: | C33 O13 Q43 |
| Date: | 2015–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2015-614&r=ene |
| By: | Pittel, Karen; Röpke, Luise |
| Abstract: | The paper analyzes resource policies in an economy in which renewable and fossil resources are realistically assumed to be essential inputs to production. Also realistically, the two types of resources are imperfect substitutes whose degree of substitutability can, however, increase over time. The focus of the - analytical as well as numerical - analysis is on the impact of this rising substitutability on the extraction of the exhaustible resource. This is especially interesting in a setting in which the use of the fossil resource induces a market failure, e.g., in the form of an environmental externality (of which climate change is the most prominent example), and in which policies are introduced to internalize this market failure. It is shown that policies which aim to slow down resource extraction but whose design is determined from political rather than optimality considerations are likely to result in even faster resource extraction. We show that this effect - often labeled a Green Paradox - can be accompanied by extraction-increasing effects of rising substitutability. More specifically, we find two types of flexibility effects that have opposing effects on the extraction path. The first effect speeds up extraction due to the expectation of higher flexibility in the future. This effect arises independently of whether the increase in substitutability is due to exogenous technological change or is endogenously driven. The second effect slows down extraction and arises when substitutability increases endogenously in accord with a changing input mix. Our results have several important implications for the design of policy measures. Specifically, a policy measure that induces flexibility-increasing technological progress must take into consideration the supply-side effects that result from the anticipation of increasing flexibility. The model also shows that for a policy to be effective, not only must flexibility effects be taken into account but the specific type of flexibility effect is also important. |
| JEL: | Q32 O44 O30 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc14:100321&r=ene |
| By: | WILSON, Jordan |
| Keywords: | Social and Behavioral Sciences, China, high performance computing, HPC, oil security, Tianhe, exascale computing, oil exploration |
| Date: | 2014–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:globco:qt2tr126jk&r=ene |
| By: | Luke G. Fitzpatrick (Department of Economics, University of Miami); David L. Kelly (Department of Economics, University of Miami) |
| Abstract: | We study stabilization targets: common environmental policy recommendations that specify a maximum probability of an environmental variable exceeding a fixed target (e.g. limit climate change to at most 2°C above preindustrial). Previous work generally considers stabilization targets under certainty equivalence. Using an integrated assessment model with uncertainty about the sensitivity of the temperature to greenhouse gas (GHG) concentrations (the climate sensitivity), learning, and random weather shocks, we calculate the optimal GHG emissions policy with and without stabilization targets. We characterize the range of feasible targets and show that in general, climate change has too much uncertainty and inertia to be controlled with the precision implied by stabilization targets. We find that uncertainty exacerbates the welfare cost of stabilization targets. First, the targets are inflexible and do not adjust to new information about the climate system. Second, the target forces the emissions policy to overreact to transient shocks. These effects are present only in a model with uncertainty. Total welfare costs in the baseline model are 4.7%, which is 66% higher than the welfare cost under certainty. |
| Keywords: | Climate Change, Stabilization Targets, Probabilistic Stabilization Targets, Uncertainty, Learning Publication Status: Under Review |
| JEL: | Q54 Q58 O44 |
| Date: | 2015–02–06 |
| URL: | http://d.repec.org/n?u=RePEc:mia:wpaper:2015-03&r=ene |
| By: | Wessel Vermeulen; Michel Beine; Serge Coulombe |
| Abstract: | This paper evaluates whether immigration can mitigate the Dutch disease effects associated with booms in natural resource sectors. We derive predicted changes in the size of the non-tradable sector from a small general-equilibrium model a la Obstfeld-Rogoff. Using data for Canadian provinces, we find evidence that aggregate immigration mitigates the increase in the size of the non-tradable sector in booming regions. The mitigation effect is due mostly to interprovincial migration and temporary foreign workers. There is no evidence of such an effect for permenent international immigration. Interprovincial migration also results in a spreading effect of Dutch disease from booming to non-booming provinces. |
| Keywords: | Natural Resources, Dutch Disease, Immigration, Mitigation Effect |
| JEL: | F22 O15 R11 R15 |
| Date: | 2015–01–06 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:oxcarre-research-paper-151&r=ene |
| By: | Asian Development Bank (ADB); (Regional and Sustainable Development Department, ADB); ; |
| Abstract: | This report summarizes the investments in clean energy made by the operations departments of the AsianDevelopment Bank (ADB) in 2013, condensing information from project databases and formal reports in an easy-to-reference format. This report was prepared by ADB’s Clean Energy Program which provides the cohesive agenda that encompasses and guides ADB’s lending and non-lending assistance, initiatives, and plan of action for sustainable growth in Asia and the Pacific. |
| Keywords: | clean energy, energy projects, adb projects, power sector rehabilitation, energy efficiency, solar power, adb operations, investments, sustainable growth, central and west asia department, east asia department, private sector operations department, south asia department, southeast asia department, project summary |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:asd:wpaper:rpt146557-2&r=ene |
| By: | Aygul Ozbafli (JDINT’L, Department of Economics, Queen’s University, Canada); Glenn P. Jenkins (Queen’s University, Canada and Eastern Mediterranean University, North Cyprus) |
| Abstract: | This research examines households’ willingness to pay (WTP) for an improved electricity service. Households’ WTP is estimated using the contingent valuation (CV) method on data from 350 in-person interviews in North Cyprus. In order to avoid the cost of outages, households are willing to incur a 13.5% increase in their monthly electricity bill. A cost–benefit analysis (CBA) indicates that the annualized economic benefits of improved reliability of the electricity service would be approximately USD 37.8 million for the residential sector alone. This figure is more than enough to finance the investments needed to completely eradicate any electricity outages. In addition, the fuel savings from substituting the generation of the new plants for the old plants would yield about USD 44.6 million per year in fuel savings. Hence, a change from the current low-reliability policy to one of providing a high-quality service would yield an economic net present value to the residents of North Cyprus of over 2.5 times the investment costs or USD 226 million within five years. |
| Keywords: | Willingness to pay; contingent valuation; electricity; outages; reliability; cost-benefit analysis |
| JEL: | D12 D61 L94 L98 Q41 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:qed:dpaper:272&r=ene |
| By: | Asjad Naqvi (Vienna University of Economics and Business, Welthandelsplatz 1, 1020 Vienna, Austria) |
| Abstract: | Economic policy in the EU faces a trilemma of solving three challenges simultaneously - growth, distribution, and the environment. In order to assess policies that address these issues simultaneously, economic models need to account for both sector-sector and sector-environment feedbacks within a single framework. This paper presents a multi-sectoral stock-flow consistent (SFC) macro model where a demand-driven economy consisting of multiple institutional sectors - firms, energy, households, government, and financial - interacts with the environment. The model is calibrated for the EU region and five policy scenarios are evaluated; low consumption, a capital stock damage function, carbon taxes, higher share of renewable energy, and technological shocks to productivity. Policy outcomes are tracked on overall output, unemployment, income and income distributions, energy, and emission levels. Results show that investment in mitigation technologies allows for absolute decoupling and ensures that the above three issues can be solved simultaneously. |
| Keywords: | ecological macroeconomics, stock-grow consistent, growth, distribution, environment, European Union |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwiee:ieep2&r=ene |
| By: | Brown, W. Mark; Macdonald, Ryan |
| Abstract: | This analysis examines provincial income convergence in Canada from 1926 to 2011 using National Accounts-based estimates of per capita household disposable income. Household disposable income is the income available for consumption and saving, and is, therefore, closely aligned with material well-being. Convergence is a long-run tendency for income levels between economies to become more similar. In its most literal sense, convergence implies that all provincial per capita disposable incomes across Canada will eventually reach the same level. Less exacting forms of convergence allow for differences in per capita income levels due to structural differences across provinces. Factors such as resource endowments, urbanization, human capital, and industry structure are believed to be sources of such differences. |
| Keywords: | Business performance and ownership, Consumer price indexes, Economic accounts, Energy, Prices and price indexes, Regional and urban profiles |
| Date: | 2015–02–12 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp5e:2015096e&r=ene |
| By: | Anis Omri; Saida Daly; Anissa Chaibi; Christophe Rault |
| Abstract: | This paper examines the relationship between financial development, CO2 emissions, trade and economic growth using simultaneous-equation panel data models for a panel of 12 MENA countries over the period 1990-2011. Our results indicate that there is evidence of bidirectional causality between CO2 emissions and economic growth. Economic growth and trade openness are interrelated i.e. bidirectional causality. Feedback hypothesis is validated between trade openness and financial development. Neutrality hypothesis is identified between CO2 emissions and financial development. Unidirectional causality running from financial development to economic growth and from trade openness to CO2 emissions is identified. Our empirical results also verified the existence of environmental Kuznets curve. These empirical insights are of particular interest to policymakers as they help build sound economic policies to sustain economic development and to improve the environmental quality. |
| Keywords: | Financial development, CO2 emissions, Trade, Economic growth, Simultaneous-equation models. |
| Date: | 2015–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2015-622&r=ene |
| By: | Ziegler, Andreas; Schwirplies, Claudia |
| Abstract: | This paper examines the determinants of voluntary individual carbon offsetting, i.e. the financial compensation of emissions from energy use. In contrast to former studies in this field, we particularly consider a comprehensive set of factors that are discussed in the context of voluntary contributions to public goods, such as psychological motives or social norms. The empirical analysis is based on unique data from representative surveys among more than 2000 citizens from Germany and the United States. These data reveal a higher extent of the past purchase of carbon offsets in the United States. In both countries, our micro-econometric analysis with discrete choice models indicates a strong positive correlation between the perceived contribution of this offsetting mechanism to climate protection and both actual carbon offsetting in the past and the planned purchase of carbon offsets in the future. In Germany, psychological motives such as the feeling of warm glow play an additional important role, while in the Unites States social motives such as expectations from the society are of a high relevance. Interestingly, a high environmental preference (measured by the membership in an environmental organization and the identification with green politics) is significantly correlated with already purchased carbon offsets in the United States, but not in Germany. These results suggest that not only the whole society in Germany has a lower average acceptance of carbon offsetting, but also that environmentally conscious people in this country obviously did not consider carbon offsetting as a measure to avoid further anthropogenic global warming so far. |
| JEL: | Q54 Q58 H41 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc14:100422&r=ene |
| By: | Wagner, Ulrich; Petrick, Sebastian |
| Abstract: | We estimate the causal impact of the EU Emissions Trading Scheme on manufacturing firms using comprehensive panel data from the German production census. Semiparametric matching estimators yield robust evidence that the policy caused treated firms to abate one fifth of their CO2 emissions between 2007 and 2010, relative to non-treated fi rms. This reduction was achieved predominantly by improving energy efficiency and by curbing the consumption of natural gas and petroleum products, but not electricity use. We find no evidence that emissions trading lowered employment, turnover or exports of treated fi rms. |
| JEL: | D22 Q54 Q52 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc14:100472&r=ene |
| By: | Hille, Erik |
| Abstract: | Given the ambiguous empirical results of previous research, this paper tests whether support for a climate policy induced pollution haven effect and the pollution haven hypothesis can be found. Unlike the majority of previous studies, the analysis is based on international panel data and includes several methodological novelties: By arguing that trade flows of dirty goods to less polluting sectors may also be influenced by changes in policy stringency, trade information on primary, secondary, and tertiary sectors are included. In order to clearly differentiate between dirty sectors and sectors with high pollution abatement costs, separate measures for pollution intensity and policy stringency are implemented. For the latter an internationally comparable, sector-specific measure of climate policy stringency is derived using a shadow price approach. Endogeneity between a country s trade openness and its trade flows is addressed by estimating a gravity-based instrumental variable. The results provide evidence for a stronger pollution haven effect regarding carbon dioxide intensive and emission relevant energy intensive sectors. However, the impact of climate policy on polluting sectors seems to be rather limited as a distinct pollution haven effect for gross energy intensive sectors cannot be found. Similarly, no support for the stronger pollution haven hypothesis is revealed. |
| JEL: | F18 Q54 D24 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc14:100551&r=ene |
| By: | Paul David (Stanford University); Adriaan van Zon (SBE Maastricht University and United Nations University) |
| Abstract: | This paper analyzes the requirements for a social welfare-optimized transition path toward a carbon-free economy, focusing particularly on the deployment of low-carbon technologies, and the roles of engineering upgrading of extant facilities, and directed R&D to enhancing their productivity. The goal in each case is to achieve timely supply-side transformations in the global production regime that will avert catastrophic climate instability, and do so in a manner that minimizes the social welfare costs of stabilizing the level of the atmospheric concentration of greenhouse gases (GHG). This "planning-model" approach departs from conventional IAM exercises by dispensing with the need to make (generally dubious) assumptions about the macro-level consequences of behaviors of economic and political actors in response to market incentives and specific public policy instruments, such as a carbon tax. It shifts attention instead to the need for empirical research on critical technical parameters, and problems of inter-temporal coordination of investment and capacity utilization that will be required to achieve a timely, welfare-optimizing transition. A suite of heuristic integrated models is described, in which global macroeconomic growth is constrained by geophysical system with climate feedbacks, including extreme weather damages from global warming driven by greenhouse gas emissions, and the threshold level GHG concentration beyond which the climate system will be "tipped into" catastrophic runaway warming. A variety of technological options are identified, each comprising an array of specific techniques that share a distinctive instrumental role in controlling the concentration level of atmospheric CO2. The development of low-carbon technologies through investment in R&D, and their deployment embodied in new physical capital formation, is explicitly modeled; as is the implementation of known engineering techniques to "upgrade" existing fossil-fueled production facilities. The social-welfare efficient exercise of the available technological options is shown to involve sequencing different investment and production activities in separate temporal "phases" that together form a transition path to a sustainable low-carbon economy— one in which gross CO2-emissions do not exceed the Earth’s “natural” abatement capacity. Parametric variations of the "tipping point" constraint in these models will permit exploration of the corresponding modification in the required sequencing and durations of investment and production in the phases that form the optimal transition path. The preliminary solutions (using mufti-phase optimal control methods) expose important dynamic complementarities among technological options that are often presented as substitutes by current climate policy discussions. |
| Keywords: | global warming, tipping points, catastrophic climate instability, technology fix options, R&D investments, capital-embodied innovations, optimal sequencing, IAM and DIRAM policy design approaches, multi-phase optimal control, sustainable endogenous growth |
| JEL: | Q54 Q55 O31 O32 O33 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:sip:dpaper:15-003&r=ene |
| By: | Isabelle CADORET (CREM-CNRS and Condorcet Center, University of Rennes 1, France); Fabio PADOVANO (CREM-CNRS and Condorcet Center, University of Rennes 1, France, Department of Political Sciences, University Roma Tre, Italy) |
| Abstract: | This paper empirically analyzes how political factors affect the deployment of renewable energy (RE) sources and compares it to other economic, energy and environmental drivers that have received greater attention in the literature so far. The sample encompasses the EU countries bound to attain the target of 20% share of gross final energy consumption by 2020. The panel data analysis shows that lobbying by the agricultural industry negatively affect RE deployment, whereas standard measures of government quality show a positive effect; furthermore left-wing parties promote the deployment of RE more than right wing ones, but this effect is reduced when the governing coalition is highly concentrated. Among the control variables, economic growth shows a positive impact on RE deployment. |
| Keywords: | renewable energy sources, energy policy, quality of government, lobbying, political ideology |
| JEL: | Q28 H54 H87 D72 D73 D78 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:tut:cccrwp:2015-01-ccr&r=ene |
| By: | Saraly Andrade de Sa; Julien Daubanes |
| Abstract: | Demand for oil is very price inelastic. Facing such demand, an extractive cartell induces the highest price that does not destroy its demand, unlike the conventional Hotelling analysis: the cartel tolerates ordinary substitutes to its oil but deters high-potential ones. Limit-pricing equilibria of non-renewable-resource markets sharply differ from usual Hotelling outcomes. Resource taxes have no effect on current extraction; extraction may only be reduced by supporting its ordinary substitutes. The carbon tax applies to oil and also penalizes its ordinary (carbon) substitutes, inducing the cartel to increase current oil production. The carbon tax further affects ultimately-abandoned oil reserves ambiguously. |
| Keywords: | Carbon tax, Limit pricing, Non-renewable resources, Monopoly, Demand inelasticity, Substitutes subsidies |
| JEL: | Q30 L12 H21 Q42 |
| Date: | 2014–05–02 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:oxcarre-research-paper-136&r=ene |
| By: | ITO Koichiro; Mar REGUANT |
| Abstract: | We develop a theoretical framework to characterize strategic behavior in sequential markets under imperfect competition and limited arbitrage. Our theory predicts that these two elements can generate a systematic price premium. We test the model predictions using microdata from the Iberian electricity market. We show that the observed price differences and firm behavior are consistent with the model. Finally, we quantify the welfare effects of arbitrage using a structural model. In our setting, we show that full arbitrage is not necessarily welfare-enhancing in the presence of market power. It reduces consumer costs but decreases productive efficiency. |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:15015&r=ene |
| By: | Øglend, Atle (UiS); Osmundsen, Petter (UiS); Kleppe, Tore Selland (UiS) |
| Abstract: | This paper investigates the economic value of trade when prices of transportation services are endogenous to cross-market price spreads. This is relevant for liquefied natural gas (LNG) exports. LNG transportation capacity is limited in the short-run, and long lead-times are involved in extending the transportation infrastructure. We establish empirically that LNG transportation costs have been endogenous to regional gas prices spreads. As such, transportation service providers have been able to capture part of the price spread. We proceed to develop a method to value LNG exports under conditions of endogenous transportation costs and market integration. We use this method to quantify the effect of endogenous transportation costs on the value of LNG exports from the US to Japan. Our analysis shows that when transportation costs are correctly treated as endogenous, the LNG export benefit can drop by as much as 20-50% relative to the case of exogenous cost. |
| Keywords: | LNG; natural gas; export; trade policy |
| JEL: | F13 Q27 Q48 |
| Date: | 2015–02–09 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:stavef:2015_005&r=ene |
| By: | Edward B. Barbier (Department of Economics & Finance, University of Wyoming, USA); Mikolaj Czajkowski (Department of Economic Sciences, University of Warsaw); Nick Hanley (Department of Geography and Sustainable Development, University of St. Andrews) |
| Abstract: | This paper explores both theoretically and empirically whether or not the willingness to pay (WTP) for pollution control varies with income. Our model indicates that the income elasticity of the marginal WTP for pollution reduction is only constant under very restrictive conditions, which are not necessary for an environmental Kuznets curve relationship between pollution and income. Our empirical analysis tests the null hypothesis that the elasticity of the WTP for pollution control with respect to income is constant, employing a multi-country contingent valuation study of eutrophication reduction in the Baltic Sea. Our findings reject this hypothesis, and estimate an income elasticity of the WTP for eutrophication control of 0.1-0.2 for low-income respondents and 0.6 - 0.7 for high-income respondents. Thus, our empirical results suggest that the elasticity is not constant and always less than one. |
| Keywords: | Baltic Sea, benefit transfer, environmental Kuznets curve, eutrophication, income elasticity of willingness to pay, non-market valuation. |
| JEL: | Q51 Q53 Q56 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:sss:wpaper:2015-04&r=ene |
| By: | Gao, Yuning; Zheng, Yunfeng; Hu, Angang; Meng, Bo |
| Abstract: | The rapid growth of China's economy has brought about huge losses of natural capital in the form of natural resource depletion and damages from carbon emissions. This paper recalculates value added, capital formation, capital stock, and related multifactor productivity in China's industrial sectors by further developing the genuine savings method of the World Bank. The sector-level natural capital loss was calculated using China's official input–output table and their extensions for tracing final consumers. The capital output elasticity in the productivity estimation was adjusted based on these tables. The results show that although the loss of natural capital in China's industrial sectors in terms of value added has slowed, the impacts on their productivity during the past decades is still quite clear. |
| Keywords: | China, Input-output tables, Economic sector, Productivity |
| JEL: | C67 E01 O4 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper490&r=ene |
| By: | Löschel, Andreas; Pothen, Frank; Schymura, Michael |
| Abstract: | One of the most promising ways of meeting climate policy targets is improving energy efficiency, i.e. reducing the amount of scarce and polluting resources needed to produce a given quantity of output. This study undertakes an empirical exercise using the World Input-Output Database (WIOD), a harmonized dataset comprising time-series of input-output tables along with environmental satellite accounts and socioeconomic information. The paper consists of two parts. In the first part we begin with an aggregated picture of EU27 energy intensity and its evolution between 1995 and 2009. Then we dig deeper and introduce sectoral detail to identify the economic changes that occurred during the same period. Finally, we disaggregate the EU27 into countries for regional analysis and perform a sectoral disaggregation for a fine-grained picture of energy intensity in Europe. In the second part of the study we take our findings from index decomposition analysis and subject them to panel estimations. The objective is to control for factors that may have shaped the evolution of energy intensity in the European Union. In particular, we investigate the impact of technological change, structural change, trade, environmental regulation and country-specific characteristics. |
| Keywords: | Environmental and Climate Economics,Energy Intensity,Index Decomposition |
| JEL: | Q0 Q50 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cawmdp:79&r=ene |
| By: | Tao Hong; Pierre Pinson; Shu Fan |
| Abstract: | The Global Energy Forecasting Competition (GEFCom2012) attracted hundreds of participants worldwide, who contributed many novel ideas to the energy forecasting field. This paper introduces both tracks of GEFCom2012, hierarchical load forecasting and wind power forecasting, with details on the aspects of the problem, the data, and a summary of the methods used by selected top entries. We also discuss the lessons learned from this competition from the organizers’ perspective. The complete data set, including the solution data, is published along with this paper, in an effort to establish a benchmark data pool for the community. |
| Keywords: | Energy forecasting; Load forecasting; Forecasting competition; Wind power forecasting |
| JEL: | Q41 Q47 |
| Date: | 2013–12–31 |
| URL: | http://d.repec.org/n?u=RePEc:wuu:wpaper:hsc1316&r=ene |
| By: | Ahrend, Klaus-Michael; Meyer-Renschhausen, Martin |
| Abstract: | Die Bewertung von Strom- und Gasnetzen hat für jeden Netzeigentümer eine hohe Bedeutung. In dem Beitrag werden die relevanten Bewertungsmethoden dargestellt. Vertieft werden die Elemente für die Ermittlung des Ertragswerts unter Berücksichtigung der deutschen Netzregulierung. Für die gewichteten Kapitalkosten, den WACC, wird eine neue Formel für die Berechnung präsentiert. Auch wird die Realoptionstheorie auf die Bewertung von Energienetzen übertragen. Die Werte der bestehenden Realoptionen können den ermittelten Ertragswert erhöhen oder ihn reduzieren. Jedenfalls lassen sich Realoptionen bei den Verhandlungen für einen angemessenen Preis der Energienetze berücksichtigen. Der Beitrag schließt mit Empfehlungen für die Netzbewertung in der Praxis. |
| Abstract: | The valuation of electricity and gas grids is an important task for every grid company. Starting from the relevant valuation methods the paper focuses on the elements of the earnings valuation method. Those are described based on the inputs from the German Grid regulation. For the WACC – as one key element of the earnings valuation – a new calculation formula is presented. In the paper the real options theory is transferred on the valuation of energy grids. The values from existing real options can be added to or subtracted from the calculated earnings value. In any case the real options valuation can be used as a means for negotiating the appropriate price of the energy grid. The article closes with recommendations for the valuation of grids in business practice. |
| Keywords: | Bewertungsverfahren,Ertragswert,Energienetze,Stromnetz,Gasnetz,Realoptionsbewertung,Energieregulierung,Netzregulierung,Rekommunalisierung |
| JEL: | H70 L5 L94 L95 M1 Q4 Q43 |
| Date: | 2014–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:106943&r=ene |
| By: | Tao Hong; Jason Wilson; Jingrui Xie |
| Abstract: | The classical approach to long term load forecasting is often limited to the use of load and weather information occurring with monthly or annual frequency. This low resolution, infrequent data can sometimes lead to inaccurate forecasts. Load forecasters often have a hard time explaining the errors based on the limited information available through the low resolution data. The increasing usage of Smart Grid and Advanced Metering Infrastructure (AMI) technologies provides the utility load forecasters with high resolution, layered information to improve the load forecasting process. In this paper, we propose a modern approach that takes advantage of hourly information to create more accurate and defensible forecasts. The proposed approach has been deployed across many US utilities, including a recent implementation at North Carolina Electric Membership Corporation (NCEMC), which is used as the case study in this paper. Three key elements of long term load forecasting are being modernized: predictive modeling, scenario analysis and weather normalization. We first show the superior accuracy of the predictive models attained from hourly data, over the classical methods of forecasting using monthly or annual peak data. We then develop probabilistic forecasts through cross scenario analysis. Finally, we illustrate the concept of load normalization and normalize the load using the proposed hourly models. |
| Keywords: | Load forecasting; Load normalization; Weather normalization; Multiple linear regression model |
| JEL: | C22 C53 Q41 Q47 |
| Date: | 2013–12–31 |
| URL: | http://d.repec.org/n?u=RePEc:wuu:wpaper:hsc1313&r=ene |
| By: | Morath, Florian; Elsayyad, May |
| Abstract: | This paper considers investments in cost-reducing technology in the context of contributions to climate protection. Contributions to mitigating climate change are analyzed in a two-period model where later contributions can be based on better information, but delaying the contribution to the public good is costly because of irreversible damages. We show that, when all countries have access to the new technology, countries have an incentive to invest in technology because this can lead to an earlier contribution of other countries and therefore reduce a country's burden of contributing to the public good. Our results provide a rationale for the support of technology sharing initiatives. |
| JEL: | H41 Q52 D83 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc14:100396&r=ene |
| By: | Fernando Avalos; Marco Jacopo Lombardi |
| Abstract: | Biofuel policies are frequently mentioned in the policy and academic debates because of their potential impact on food prices. In 2005, the United States authorities passed legislation under which corn-based ethanol became in practice the only available gasoline additive. Some studies have then argued that ethanol and biodiesel subsidies in advanced economies may have strengthened the link between the prices of oil and those of some food commodities. This paper tests whether the response of food commodity prices to global demand shocks and to oil-specific demand shocks has changed following the introduction of this legislation. Our results show that corn prices exhibit a stronger response to global demand shocks after 2006. Some short-lived but statistically significant response to oil-specific demand shocks is also documented. Close substitutes of corn in the feedstock business (eg soybeans and wheat) exhibit comparable but more muted responses, while other food commodities unaffected by biofuel policies do not change their behaviour. We also report some evidence that global liquidity is a factor driving global demand shocks, and through that channel may have affected food commodity prices. |
| Keywords: | oil price, corn price, food prices, ethanol, biofuel, VAR |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:487&r=ene |
| By: | Saam, Marianne; Papageorgiou, Chris; Schulte, Patrick |
| Abstract: | Recently Acemolgu, Aghion, Bursztyn and Hemous (AER 2012) formulated a model in which a high macroeconomic elasticity of substitution between clean and dirty production represents a crucial condition for green growth. Until now it has never been systematically estimated. Using a novel panel of cross-country sectoral data, we formulate specifications of nested CES production functions that allow to estimate a special case of this parameter: the elasticity of substitution between clean and dirty energy inputs. Contrary to what is expected based on the earlier interfuel substitution literature, we find evidence that this elasticity exceeds one. |
| JEL: | O44 Q54 O47 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc14:100414&r=ene |
| By: | Alexander James (Department of Economics and Public Policy, University of Alaska Anchorage) |
| Abstract: | Existing development literature has argued that natural-resource endowments ``curse'' economic prosperity by reducing expenditures on education. According to this theory, public and private agents lack sufficient foresight to make optimal economic decisions and become poor as a result. Using a panel of U.S. state-level data, this paper offers evidence to the contrary. Public spending on education in resource-rich states greatly exceeds that in resource-scarce ones, and private education services are imperfectly crowded out as a result. More generally, this paper highlights the importance of exploiting both spatial and temporal variation in resource wealth when studying resource-rich economies. |
| Keywords: | Natural Resources, Education, Public Policy, Resource Curse |
| JEL: | Q32 Q33 Q38 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:ala:wpaper:2015-01&r=ene |