|
on Energy Economics |
| By: | Karsten Neuhoff; Jochen Diekmann; Friedrich Kunz; Sophia Rüster; Wolf-Peter Schill; Sebastian Schwenen |
| Abstract: | In Germany and beyond, various capacity mechanisms are currently being discussed with a view to improving the security of electricity supply. One of these mechanisms is a strategic reserve that retains generation capacity for use in times of critical supply shortage. We argue that strategic reserves have specific advantages compared to other capacity mechanisms in the context of the European energy transition. To date, however, the debate on capacity mechanisms has largely been restricted to national contexts. Against this background, we discuss the feasibility and potential benefits of coordinated cross-border strategic reserves to safeguard electricity supply and aid the energy transition in Germany and neighboring countries at large. Setting aside strategic reserve capacity which is deployed only in the event of extreme supply shortages could improve the security of electricity supply without distorting the EU’s internal electricity market. In addition, overall costs may decrease when reserve procurement and activation are coordinated among countries, particularly if combined with flow-based market coupling. |
| Keywords: | Capacity mechanisms, strategic reserve, market design, energy policy, energy transition |
| JEL: | L51 Q48 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1495&r=ene |
| By: | Elena Merle-Beral; Katharina Gassner |
| Keywords: | Science and Technology Development - Engineering Environment - Climate Change Mitigation and Green House Gases Environment - Environment and Energy Efficiency Energy - Energy Production and Transportation Energy - Energy and Environment |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:22113&r=ene |
| By: | Dr. Christian Lutz (GWS - Institute of Economic Structures Research); Dr. Markus Flaute (GWS - Institute of Economic Structures Research); Dr. Ulrike Lehr (GWS - Institute of Economic Structures Research); Dr. Kirsten Svenja Wiebe (GWS - Institute of Economic Structures Research) |
| Abstract: | This paper brings together the debate on economic impacts of renewable energy (RE) deployment and the discussion on modelling endogenous technological change on the global markets for the different renewable power generation technologies. Economic impacts of RE deployment are still mostly discussed on national level, where different effects have been identified. Recent research for Germany shows positive effects on the macro level and different distributional impacts. High investment in solar photovoltaics (PV) from 2010 to 2012 and induced increases in the RE surcharge are the main drivers. At the same time, cost reductions for wind and solar PV take place on global markets, with global learning curves explaining the cost reductions very well. This calls for better including the international dimension into the modelling. The complex feedback loops between global cost curves and national policies, which react to global learning with some time lags, are not yet integrated into quite complex economic models. These models have to capture different RE technologies, different industries, either delivering the RE technologies or strongly depending on electricity prices, which are influenced by national support policies and macroeco- nomic development. As a first step to better understand the role of international markets, assumptions on RE exports based on global scenarios can be used. Results show the importance of global markets at least for the German RE industries. If the international dimension is taken into account, mainly positive economic impacts of further RE deployment can be observed. |
| Keywords: | renewable energy, global learning curves, policies, economic models |
| JEL: | Q28 Q29 C51 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:gws:dpaper:15-9&r=ene |
| By: | Chia-Hsun Hsu (National Chung Hsing University); Shui-Yang Lien (DaYeh University); Pin Han (National Chung Hsing University) |
| Abstract: | Recently, building-integrated photovoltaic (BIPV) modules have attracted great attention since they can not only be a part of building materials but also generate electric power. Among many types of BIPV modules, translucent hydrogenated amorphous silicon (a-Si:H) solar module has expand the range of applications to include windows, sunroofs and skylights, where it can be useful for both purpose of generating electricity and transparency for sunlight at the day time. There are two main types of translucent a-Si PV modules. The first one builds with a transparent conductive oxide thin film, instead of the metal film, as the back electrode. However, this type of module only allows light with wavelengths longer than 500 nm to pass through, leading to a reddish light and therefore visual discomfort. The other type translucent a-Si PV module uses the so-called “P4 laser process” to remove silicon and back electrode layers so as to allow nature light transmission. In this study, 10% transmittance a-Si:H thin film solar modules are fabricated by laser processes. Effects of P4 laser line width and scribing directions, vertical, spot-like and horizontal in relation to the modules, are investigated. Firstly for the P4 laser line width optimization from 30-60 µm, the experimental result shows that with a constant transmittance, a module having a large line width could improve fill factor and conversion efficiency due to reduction of scribed line number needed, thus decreasing the damage of silicon layers. The 60 µm P4 laser line width leads to a minimum of performance degradation of about 11%. Further increasing the line width may need to introduce additional optical lens system to change laser beam distribution. Secondly, I-V curves and parameters of the modules fabricated using three different scribing directions show that the vertically scribed module has a high series resistance of 19.3 |
| Keywords: | building-integrated photovoltaic, translucent, amorphous silicon module |
| JEL: | Q40 Q20 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:2604147&r=ene |
| By: | Lade, Gabriel E.; Lin, C.-Y. Cynthia; Smith, Aaron |
| Abstract: | We critically review the Environmental Protection Agency’s (EPA) assessment of the costs and benefits of the Renewable Fuel Standard (RFS2) as summarized in its regulatory impact analysis (RIA). We focus particularly on EPA’s methods used to calculate the costs of the policy on the US fuel market. We compare EPA’s ex ante cost and benefit estimates to measures of ex post costs implied by the price of compliance credits under the policy. Overall, we find that the agency’s assessment was inadequate. In spite of, or perhaps because of, the detailed and complex analysis underlying the RIA, EPA overlooked several fundamental factors. We conclude by recommending a simplification of the analysis used in RIAs, as well as the use of “stress tests” in RIAs to ensure that programs like the RFS2 are designed in ways that can manage high compliance cost scenarios. |
| Keywords: | Renewable Fuel Standard, biofuels, compliance credits, renewable identification number, RIN prices, GHG emissions, regulatory impact analysis |
| Date: | 2015–06–19 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-15-22&r=ene |
| By: | Anna Kowalska-Pyzalska |
| Abstract: | This paper presents a review of recent literature on consumer energy behaviors and willingness to pay for innovative products in the energy market. Among such products green energy and dynamic electricity tariffs will be considered. Social and psychological factors, that influence the adoption of these products will be discussed. Consumer engagement and acceptance of green energy as well as dynamic electricity tariffs are necessary to make the diffusion of these products possible and effective. In conclusion some research challenges and potential research gaps will be described. |
| Keywords: | Dynamic pricing; Green energy; Social acceptance; Consumer behavior; Willingness to pay; Diffusion of innovation |
| JEL: | C63 O33 Q48 Q55 |
| Date: | 2015–07–17 |
| URL: | http://d.repec.org/n?u=RePEc:wuu:wpaper:hsc1507&r=ene |
| By: | Palmer, Karen (Resources for the Future); Walls, Margaret (Resources for the Future); O'Keeffe, Lucy (Resources for the Future) |
| Abstract: | Consumers often invest in information when faced with choices that have uncertain payoffs. Homeowners considering improvements or retrofits in order to lower their energy bills may decide to have a home energy audit, a professional assessment that identifies where a home is losing energy and recommends improvements that will lower energy use and costs. Follow-up on audit recommendations varies widely across households. We explore the reasons for these differences using data from a multistate survey of over 500 homeowners who have had energy audits. Our findings suggest that two sets of factors are important in explaining audit follow-up: factors related to the costs of retrofits and those related to the features and quality of the audits. Our findings have implications for policies to encourage the use of audits and suggest that the quality of the information and how it is delivered have important consequences for the role of audits in reducing energy consumption. |
| Keywords: | energy efficiency, economics of information, energy retrofits |
| JEL: | L94 L95 Q40 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-15-34&r=ene |
| By: | Samuel Oguah; Debabrata Chattopadhyay; Morgan Bazilian |
| Keywords: | Environment - Climate Change Mitigation and Green House Gases Environment - Environment and Energy Efficiency Energy - Energy Production and Transportation Energy - Energy and Environment Energy - Power & Energy Conversion |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:22112&r=ene |
| By: | World Bank |
| Keywords: | Macroeconomics and Economic Growth - Climate Change Economics Environmental Economics and Policies Private Sector Development - E-Business Information and Communication Technologies - ICT Policy and Strategies Energy - Energy Production and Transportation Environment |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:21776&r=ene |
| By: | Samuel Oguah; Debabrata Chattopadhyay |
| Keywords: | Environment - Climate Change Mitigation and Green House Gases Energy - Energy and Environment Power and Energy Conversion Energy - Energy Production and Transportation Environment - Environment and Energy Efficiency |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:21763&r=ene |
| By: | Neuhoff, Karsten; Ritter, Nolan; Schwenen, Sebastian |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esrepo:111922&r=ene |
| By: | Christine Shiel (Bournemouth University); Debbie Cotton (Plymouth University); Arminda do Paco (University of Beira Interior) |
| Abstract: | The role of Higher Education (HE) in contributing to a sustainable future has been consistently highlighted in global policy documents. HE has a key role to play in: educating graduates who will live and manage more sustainably in the future; contributing to sustainable development through research; and reducing the environmental impact of estates and thus contributing to lower carbon emissions. In regard to the latter, initiatives led by the Estates function within institutions as part of campus greening, serve to reinforce for students that HE is responsive to environmental concerns and that behaviour change is important. Further, combined with integrating education for sustainability within the curriculum, energy conservation projects should ultimately contribute to behaviour change. However, very little research to date has evaluated whether Education for Sustainability (EfS) and energy conservation projects impact in this way on student behaviour. A supposition might be that the more effectively and comprehensively an institution addresses energy conservation in both the educational and extra-curricular spheres, the more likely it is that there will be a positive impact on behaviours. This study explores that proposition by comparing students’ energy-related attitudes and behaviours across three distinctly different institutions, two in the UK and one in Portugal. The two UK institutions have both championed EfS but with different approaches: one has acknowledged the need to integrate EfS with extra-curricular and co-curricular initiatives; the other has had less success with EfS and less integration between campus and curriculum. The Portuguese university has not developed a strategic approach in relation to sustainable development and has very little in the way of formal policies. Survey data from students at the three institutions is used to explore the similarities and differences between the student populations in terms of their energy-related attitudes, behaviours and particularly their perspectives on their institution’s energy saving activities. The results demonstrate that there are significant differences between the students’ responses and that these are likely to relate, in part, to the efforts, or lack of efforts made by each institution in particular areas. The conclusion suggests that there is value in combining EfS with extra-curricular initiatives but that this will require closer working relationships between academics and professional services staff within institutions. Future research might explore those factors that facilitate or inhibit such integrated ways of working. Robust measures for evaluating the extent to which particular sustainability initiatives and approaches influence behaviour change, need to be developed. |
| Keywords: | Education for Sustainability; Energy saving; Behaviours |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:2604372&r=ene |
| By: | Stephen O'Connell (The Graduate Center, CUNY); Allan Collard-Wexler (Duke University); Hunt Allcott (NYU) |
| Abstract: | Endemic blackouts are a particularly salient example of how poor infrastructure might reduce growth in developing economies. We study how electricity shortages affect all Indian manufacturers, using an instrument based on hydroelectricity production and a hybrid Leontief/Cobb-Douglas production function model. Shortages reduce average output by about five percent, but because most inputs can be stored during outages, productivity losses are much smaller. Plants without generators have much larger losses, and because of economies of scale in generator capacity, shortages more severely affect small plants. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed015:159&r=ene |
| By: | Atamanov Aziz; Jon Jellema; Umar Serajuddin |
| Keywords: | Energy - Energy Consumption Energy - Energy Policies & Economics Energy - Energy Production and Transportation Energy - Energy and Poverty Alleviation Macroeconomics and Economic Growth - Taxation & Subsidies Poverty Reduction - Conditional Cash Transfers Poverty Reduction - Equity and Development Poverty Reduction - Services & Transfers to Poor |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:22051&r=ene |
| By: | World Bank |
| Keywords: | Science and Technology Development - Engineering Power Energy Conversion Environment - Environment and Energy Efficiency Energy - Energy Production and Transportation Energy - Energy and Environment Macroeconomics and Economic Growth - Taxation & Subsidies Social Protections and Labor - Social Protections & Assistance |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:22095&r=ene |
| By: | Lucas Bertinatto; Javier García-Cicco; Santiago Justel; Diego Saravia |
| Abstract: | This paper examines the real effects that a rise in the electricity rate would have on the Chilean economy. In general, the results and conclusions of the literature attest to the difficulties that arise when trying to predict the macroeconomic effects of such a shock. The results obtained with stochastic general equilibrium models are sensitive to the value of the elasticity of substitution between energy and the production factors. According to the models, for the commonly used substitution elasticities for Chile, a permanent shock of + 10% in the price of electricity would cause a drop in steady-state GDP between -0.3% and -0.4%, and of about -1% in consumption and investment. If, however, electric power could be more easily replaceable by labor and capital, the fall in steady-state GDP predicted by the model would be significantly lower (-0.1%). The regressions run using firm-level data suggest that a 10% increase in the electricity rate resulted in a -1.9% drop in investment and -0.1% in employment in manufacturing firms. |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:chb:bcchwp:759&r=ene |
| By: | Burtraw, Dallas (Resources for the Future); Bushnell, James; Munnings, Clayton (Resources for the Future) |
| Abstract: | The Clean Power Plan (CPP) is the centerpiece of the US efforts to reduce carbon emissions, introducing regulation of greenhouse gas emissions from existing power plants for the first time on a national basis. These regulations may interact with existing initiatives, for example, in California, where the state has a comprehensive economy-wide cap with emissions allowance trading in place. In addition, three Pacific coast states and British Columbia have supported the idea of comprehensive pricing. This paper provides a summary of a workshop that examined the interaction of these policy approaches. A main observation in the workshop was that the forthcoming CPP will likely facilitate and complicate the prospect of comprehensive carbon pricing. Multistate coordination in complying with the CPP could be key to making simultaneous progress on both the national and regional policy efforts and could provide a pathway from regulation to carbon pricing. |
| Keywords: | Clean Air Act, Clean Power Plan, carbon pricing, cap and trade, regulation, emissions rates |
| JEL: | Q28 Q48 Q58 |
| Date: | 2015–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-15-31&r=ene |
| By: | Yabei Zhang; Norma Adams |
| Keywords: | Science and Technology Development - Engineering Environment - Environment and Energy Efficiency Energy - Energy Production and Transportation Energy - Energy and Environment Energy - Energy Conservation & Efficiency |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:22114&r=ene |
| By: | Francesco Caravelli; James Requeima; Cozmin Ududec; Ali Ashtari; Tiziana Di Matteo; Tomaso Aste |
| Abstract: | We empirically analyze the most volatile component of the electricity price time series from two North-American wholesale electricity markets. We show that these time series exhibit fluctuations which are not described by a Brownian Motion, as they show multi-scaling, high Hurst exponents and sharp price movements. We use the generalized Hurst exponent (GHE, $H(q)$) to show that although these time-series have strong cyclical components, the fluctuations exhibit persistent behaviour, i.e., $H(q)>0.5$. We investigate the effectiveness of the GHE as a predictive tool in a simple linear forecasting model, and study the forecast error as a function of $H(q)$, with $q=1$ and $q=2$. Our results suggest that the GHE can be used as prediction tool for these time series when the Hurst exponent is dynamically evaluated on rolling time windows of size $\approx 50 - 100$ hours. These results are also compared to the case in which the cyclical components have been subtracted from the time series, showing the importance of cyclicality in the prediction power of the Hurst exponent. |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1507.06219&r=ene |
| By: | World Bank |
| Keywords: | Science and Technology Development - Engineering Environment - Climate Change Mitigation and Green House Gases Environment - Environment and Energy Efficiency Energy - Energy Production and Transportation Energy - Energy and Environment |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:22083&r=ene |
| By: | World Bank |
| Keywords: | Environment - Environment and Energy Efficiency Energy - Energy and Environment Economic Theory Research Infrastructure Economics and Finance - Infrastructure Economics Energy - Energy Production and Transportation |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:21874&r=ene |
| By: | Alicia Hammond; Inka Schomer; Alassane Ngom; Awa Seck; Vanessa Lopes Janik |
| Keywords: | Gender - Gender and Development Housing Human Habitats Gender - Gender and Health Gender - Gender and Law Communities and Human Settlements Energy - Rural Energy Gender - Gender and Energy Rural Development - Rural Development Knowledge & Information Systems |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:22111&r=ene |
| By: | World Bank |
| Keywords: | Oil Refining Gas Industry Energy - Energy and Environment Economic Theory Research Energy - Energy Production and Transportation Environment - Environment and Energy Efficiency Industry Macroeconomics and Economic Growth |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:21916&r=ene |
| By: | Medel, Carlos A. |
| Abstract: | To what extent geopolitical tensions in major oil-producer countries and unexpected news related to the Organisation of the Petroleum Exporting Countries (OPEC) affect oil price? What are the effects of non-market externalities in oil price? Are oil price forecasters aware or affected by such externalities when making their predictions? In this article, I analyse the influence of these events on oil price by means of Granger causality, using a unique measure of geopolitical events accounting for supply disruptions for the 2001-12 period. I found evidence favouring OPEC countries'-related news as an oil price driver jointly with supply disruptions influencing short-term forecasts, and reducing the consensus when unanticipated news are available. When considering separately OPEC news or other supply disruptions, the evidence is rather episodic. |
| Keywords: | Oil-producer countries; OPEC; oil price; Granger causality |
| JEL: | C12 C22 E66 Q41 |
| Date: | 2015–07–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:65667&r=ene |
| By: | Razmi, Fatemeh; Mohamed, Azali; Chin, Lee; Habibullah, Muzafar Shah |
| Abstract: | This paper examines the impact of oil price, as a cause of economic crisis, and monetary policy through the four known channels of monetary transmission mechanism (interest rate, exchange rate, domestic credit, and stock price). Using a structural vector autoregression model based on monthly data from 2002 to 2013 for Association of Southeast Asian Nations-4 countries, oil price and monetary transmission channels are compared pre- and post-crisis. The result indicates oil price remains an important factor in explaining price volatility, even though oil price has a weaker effect compared to a stronger effect of monetary transmission mechanism on prices. Stock price for Malaysia and domestic credit for the three others can affect the prices against oil price shock. Unlike prices, the output of all countries except Thailand is more affected by oil price post-crisis compared to pre-crisis. Different monetary transmission tools affecting industrial production are compared for the four countries. |
| Keywords: | monetary transmission, global financial crisis, oil price shock |
| JEL: | E52 Q43 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:65714&r=ene |
| By: | Clara Alvarez; Teuta Kacaniku |
| Keywords: | Finance and Financial Sector Development - Access to Finance Public Sector Corruption and Anticorruption Measures Finance and Financial Sector Development - Bankruptcy and Resolution of Financial Distress Finance and Financial Sector Development - Debt Markets Energy - Energy Production and Transportation Public Sector Development |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:21762&r=ene |
| By: | Lili Mottaghi |
| Keywords: | Energy - Energy Demand Oil Refining and Gas Industry Finance and Financial Sector Development - Debt Markets Energy - Energy and Environment Environment - Environment and Energy Efficiency Industry |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:21766&r=ene |
| By: | Teuta Kacaniku; Karina Izaguirre-Bradley |
| Keywords: | Environment - Climate Change Mitigation and Green House Gases Environment - Environment and Energy Efficiency Energy - Energy Production and Transportation Energy - Energy and Environment Energy - Power & Energy Conversion |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:22115&r=ene |
| By: | Emmanuel Eluke (Dnepropetrovsk National University) |
| Abstract: | The article «The Energy Policy of the US toward Central Africa After 2001» has many justifications. Academically, it should provide researchers of policy analysis a frame of reading Central Africa relations with the US in regards of the US energy security. It should also provide students of Central African affairs, especially in relation to the US the lenses through which to read ongoing events(human rights, civil unrest, terrorism) in the sub-region and how the US policy is influencing these events in the area. This work is also policy relevant because it should provide policy makers enough information and choices in formulating and conducting foreign policy decisions toward the US. The article aims to trace the US energy policy changes and subsequent US interest in the energy resources of Central Africa. Equally, to analyze the US foreign policy with regards to the US energy security toward Central Africa. In addition to the above, the article aims to concede the Central Africa’s energy resources for the development of the US global power. The foreign policy of the US towards Central Africa is influenced by its energy security in the sub-region. The US engage more with countries that produce oil than countries that are not oil producing nations. The US invest more in countries that can produce and sell oil and invest less in countries that have little to offer to the United States. With regards of the US energy policy toward Central Africa, it is clear that the US has been increasing to secure energy in the region confronting other powers like China, Russia and India as shown by the high increased in the US import of the energy resources in Central Africa. Also, the US is willing to co-operate with undemocratic and authoritarian governments in Central Africa like Cameroon, Congo, Angola, Equatorial Guinea and others just to protect its energy interest in the sub-region. However, the US energy policy toward Central Africa has also let to the increase in US investment in the energy sector of Central Africa. Equally, the Central African region has been provided financial, economic and social assistance from the US. Overall, the US energy policy has let to the development of the Sub-Saharan Africa region. |
| Keywords: | US, Energy Policy, Central Africa |
| JEL: | F50 F59 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:2604393&r=ene |
| By: | Adam Smith International |
| Keywords: | Energy - Energy Production and Transportation Energy - Hydro Power Energy - Oil & Gas Governance - Local Government Industry - Mining & Extractive Industry (Non-Energy) |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:22054&r=ene |
| By: | World Bank |
| Keywords: | Environment - Climate Change Mitigation and Green House Gases Environment - Environment and Energy Efficiency Transport Economics Policy Planning Energy - Energy Production and Transportation Energy - Energy and Environment Transport |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:21887&r=ene |
| By: | H. Ron Chan; B. Andrew Chupp; Maureen L. Cropper; Nicholas Z. Muller |
| Abstract: | We quantify the cost savings from the Acid Rain Program (ARP) by comparing compliance costs for non-NSPS coal-fired generating units under the ARP with compliance costs under a uniform performance standard that achieves the same aggregate emissions. In 2002 we find cost savings of approximately $250 million (1995$). We also compare health damages associated with observed SO2 emissions from all ARP units with damages from a no-trade counterfactual. Damages under the no-trade scenario are $2.4 billion (2000$) lower than under the ARP, reflecting allowance transfers from units in the western to units in the eastern US with higher exposed populations. |
| JEL: | Q51 Q52 Q58 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21383&r=ene |
| By: | Ralf Martin; Mirabelle Muuls; Laure B. de Preux; Ulrich J. Wagner |
| Abstract: | The EU Emissions Trading Scheme continues to exempt industries deemed at risk of carbon leakage from permit auctions. Carbon leakage risk is established based on the carbon intensity and trade exposure of each 4-digit industry. Using a novel measure of carbon leakage risk obtained in interviews with almost 400 managers at regulated firms in six countries, we show that carbon intensity is strongly correlated with leakage risk whereas overall trade exposure is not. In spite of this, most exemptions from auctioning are granted to industries with high trade exposure to developed and less developed countries. Our analysis suggests two ways of tightening the exemption criteria without increasing relocation risk among non-exempt industries. The first one is to exempt trade exposed industries only if they are also carbon intensive. The second one is to consider exposure to trade only with less developed countries. By modifying the carbon leakage criteria along these lines, European governments could raise additional revenue from permit auctions of up to €3. billion per year, based on a permit price of €30. |
| Keywords: | carbon leakage; industrial relocation; emissions trading; EU ETS; permit allocation; firm data |
| JEL: | F18 H23 H25 Q52 Q54 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:57538&r=ene |
| By: | Mawuli Segnon (Department of Economics, Univeristy of Kiel, Germany); Thomas Lux (Department of Economics, Univeristy of Kiel, Germany and Bank of Spain Chair of Computational Economics Department of Economics, Univeristy Jaume I Castellon, Spain); Rangan Gupta (Department of Economics, University of Pretoria) |
| Abstract: | This paper applies Markov-switching multifractal (MSM) processes to model and forecast carbon dioxide (CO2) emission price volatility, and compares their forecasting performance to the standard GARCH, fractionally integrated GARCH (FIGARCH) and the two-state Markov-switching GARCH (MS-GARCH) models via three loss functions (the mean squared error, the mean absolute error and the value-at-risk). We evaluate the performance of these models via the superior predictive ability test. We find that the forecasts based on the MSM model cannot be outperformed by its competitors under the vast majority of criteria and forecast horizons, while MS-GARCH mostly comes out as the least successful model. Applying various VaR backtesting procedures, we do, however, not find significant differences in the performance of the candidate models under this particular criterion. We also find that we cannot reject the null hypothesis of MSM forecasts encompassing those of GARCH-type models. In line with this result, optimally combined forecasts do indeed hardly improve upon the best single models in our sample. |
| Keywords: | Carbon dioxide emission allowance prices, GARCH, Markov-switching GARCH, FIGARCH, Multifractal Processes, SPA test, encompassing test, Backtesting |
| JEL: | Q47 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:201550&r=ene |
| By: | Salant, Stephen W. |
| Abstract: | In theory, how a fixed number of storable pollution permits are allocated in a cap-and-trade trade program should not affect intertemporal prices unless participants fail to receive permit endowments before they plan to use them. "Backloading" can create inefficiency; "frontloading" cannot. The European Union's Emissions Trading System, however, is regarded as a counterexample where frontloading itself is creating inefficiency. This view underlies current policy proposals to backload permits or to create a Market Stability Reserve. The goal of these policies is to shrink the current inventory of permits carried by the private sector without tightening the cap. We question the most prominent theory of why frontloading has been excessive by comparing its implications to a theory that attributes recent movements in the spot price of permits to ongoing regulatory risk of a price collapse much like what occurred in the 1970's in anticipation of the devaluation of the Mexican peso or the sale of massive government gold stockpiles. Correct diagnosis should precede treatment advice: if frontloading is excessive, inefficiency can be eliminated by suitable backloading of permits; if regulatory risk is excessive, however, backloading either directly or with a market stability reserve is unlikely to reduce inefficiency. |
| Keywords: | cap and trade, emissions trading, market stability reserve, peso problem, regulatory uncertainty |
| Date: | 2015–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-15-30&r=ene |
| By: | Fell, Harrison |
| Abstract: | Instability in cap-and-trade markets, particularly with respect to permit price collapses has been an area of concern for regulators. To that end, several policies, including hybrid price-quantity mechanisms and the newly introduced "market stability reserve" (MSR) systems have been introduced and even implemented in some cases. I develop a stochastic dynamic model of a cap-and-trade system, parameterized to values relevant to the European Union's Emission Trading System (EU ETS) to analyze the performance of these policies aimed at adding stability to the system or at least at reducing perceived over-allocations of permits. Results suggest adaptive allocation mechanisms such as a price collar or MSR can reduce permit over-allocations and permit price volatility in a more cost-effective manner than simply reducing scheduled permit allocations. However, it is also found that the performance of these adaptive allocation policies, and in particular the MSR, are greatly affected by assumed discount rates and policy parameters. |
| Keywords: | cap-and-trade, market stability reserve, price collar, EU ETS |
| Date: | 2015–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-15-17&r=ene |
| By: | Karsten Neuhoff; Carlos Batlle; Gert Brunekreeft; Christos Vasilakos Konstantinidis; Christian Nabe; Giorgia Oggioni; Pablo Rodilla; Sebastian Schwenen; Tomasz Siewierski; Goran Strbac |
| Abstract: | Abstract EU power market design has been focused on facilitating trading between countries and for this has defined interfaces for market participants and TSOs between countries. The operation of power systems and markets within countries was not the focus of these developments. This may have contributed to difficulties of defining or implementing a common perspective in particular on intraday and balancing approaches. This motivated us to pursue an in depth reviewof six European power markets to contribute to a better understanding of the common elements, differences and the physical and institutional reasons for these. With this paper we aim to present the main insights emerging from the reviews and to identify where there is a need for alignment of operational aspects and short-term trading arrangements, taking into account system requirements individual member states face in operating their power system. |
| Keywords: | Electricity trading, Power system operation, Institutional analysis |
| JEL: | D40 D80 G24 L94 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1494&r=ene |
| By: | Holt, Charles A.; Shobe, William |
| Abstract: | This paper reports the results of a laboratory experiment with financially motivated participants that is used to compare alternative proposals for managing the time path of emissions allowance prices in the face of random firm-specific and market-level structural shocks. In this setting, market performance measures such as social surplus are enhanced by the use of a price collar (auction reserve price and soft price cap). Comparable performance enhancements are not observed with the implementation of a quantity collar that adjusts auction quantities in response to privately held inventories of unused allowances. In fact, in some specifications, the quantity collar performed worse than no stabilization policy at all. The experiment implemented a specific set of structural elements, and extrapolation to other settings should be done with caution. Nevertheless, an examination of the observed behavioral patterns and deviations from optimal behavior suggests that a price collar has an important (although perhaps not exclusive) role to play in constructing an effective market stability reserve policy. |
| Keywords: | EU Emissions Trading System, market stability reserve, price collar, allowance prices, emissions allowances |
| Date: | 2015–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-15-29&r=ene |
| By: | World Bank |
| Keywords: | Environment - Climate Change Mitigation and Green House Gases Macroeconomics and Economic Growth - Climate Change Economics Transport Economics Policy and Planning Energy - Energy Production and Transportation Environmental Economics and Policies Transport |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:21811&r=ene |
| By: | Fraas, Art (Resources for the Future); Egorenkov, Alex (Resources for the Future) |
| Abstract: | Under the 1990 Clean Air Act Amendments, the US Environmental Protection Agency (EPA) was required to establish standards limiting air toxics emissions from industrial plants. This paper examines the effect of five of the largest cost rules issued by EPA in the initial round of air toxics rulemaking over the 1995 to 2000 period. Our estimates suggest that plants in the printing and publishing and pulp and paper industries realized important reductions in their air toxics emissions in the period between publication of the final rule and the effective date for compliance with the rule—although the reduction in air toxics emissions by pulp and paper mills falls short of EPA’s ex ante projections. However, our estimates suggest that plants in the other three industries—petroleum refining, pharmaceutical, and wood furniture—achieved little or no additional reduction in air toxics emissions over the compliance period in response to EPA’s air toxics rules. Finally, the paper explores steps that EPA should take in setting up future retrospective analyses. |
| Keywords: | air toxics emissions, regulation, emissions reductions |
| Date: | 2015–06–12 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-15-23&r=ene |
| By: | Fahri Seker (Bozok University); Murat Cetin (Namik Kemal University) |
| Abstract: | This paper deals with the relationship between renewable energy consumption and carbon emissions by incorporating economic growth, population density and trade openness as potential determinants of environmental pollution function in case of Turkey over the period 1960 to 2010. The ARDL bounds testing approach to cointegration and vector error correction model (VECM) are used to investigate the long-run and causal relationships between the variables. The empirical results reveal that there exist a long-run equilibrium relationship between renewable energy consumption, economic growth, population density, trade openness and carbon emissions. The empirical results also reveal that renewable energy consumption has a negative long run effect on carbon emissions. There exists an evidence supporting the presence of a positive relationship between carbon emissions and the other variables in the long run. However, there exists no evidence of short run relationship between renewable energy consumption and carbon emissions. The results show bi-directional long run Granger causality between trade openness, population density and carbon emissions and also uni-directional Granger causality running from economic growth and renewable energy consumption to carbon emissions in the long run. Besides, the findings present some policy implications for Turkish economy. |
| Keywords: | Carbon emissions, Renewable energy consumption, ARDL bounds test, VECM Granger causality, Turkey |
| JEL: | Q50 Q20 Q40 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:2604535&r=ene |
| By: | World Bank |
| Keywords: | Environment - Climate Change Mitigation and Green House Gases Macroeconomics and Economic Growth - Climate Change Economics Private Sector Development - E-Business Energy - Energy and Environment Environmental Economics and Policies |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:21817&r=ene |
| By: | World Bank |
| Keywords: | Environment - Climate Change Mitigation and Green House Gases Macroeconomics and Economic Growth - Climate Change Economics Environment - Montreal Protocol Transport Economics Policy and Planning Energy - Energy Production and Transportation Transport |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:21823&r=ene |
| By: | Dragan Ilić; Janick Christian Mollet (University of Basel) |
| Abstract: | The rationale of voluntary corporate initiatives is often explained with preparedness for future regulation. We test this hypothesis for the Chicago Climate Exchange (CCX) and the Climate Leaders (CL), two popular voluntary US environmental programs to curb carbon emission that were operating during a decisive regulatory event. In 2009 the Waxman-Markey Bill surprisingly passed the House of Representatives and brought the US economy on the brink of a nationwide CO2 emission trading system. In an event study we assess how the stock market adjusted prices when the likelihood of CO2 regulation suddenly increased. Our results suggest that only membership in the CCX was considered beneficial, an initiative whose design happened to dovetail with the bill. Earlier membership announcement effects paint a complementary picture. But membership alone cannot account for the entire price adjustments. Our results reveal that a substantial part of the market reaction consisted of industry-wide effects. |
| Keywords: | Voluntary markets, permit markets, climate change, greenhouse gas emissions, CO2, corporate social responsibility, shareholder wealth |
| JEL: | G38 Q53 Q54 Q58 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:bsl:wpaper:2015/06&r=ene |
| By: | FAKHRI, ISSAOUI; HASSEN, TOUMI; WASSIM, TOUILI |
| Abstract: | This paper has investigated the impact of CO2 emissions on per capita growth, energy consumption, life expectancy and urbanization in MENA countries (Algeria, Bahrain, Egypt, Emirates Arabs, Jordan, Saudi Arabs, Morocco, Qatar, Tunisia and Yemen) from 1990 to 2010. The empirical results have covered two time horizons: the short and long term. Indeed, in the short term we noticed for all countries of our sample, that the CO2 emission is explained by energy consumption and economic growth per capita which exert positive and significant effects. However, we noticed that the CO2 emission is always positively influenced by energy consumption and negatively influenced by life expectancy. Also, the effect of income per capita is negative and significant which means that the long-term economic strategy of these countries is based on activities and non-polluting sectors. In other words, growth-generating economic potential are located in non-polluting sectors and not generators of greenhouse gas. |
| Keywords: | Environmental Kuznets Curve, CO2, energy consumption, growth |
| JEL: | Q43 Q53 Q56 |
| Date: | 2015–07–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:65683&r=ene |
| By: | Chan, H. Ron; Chupp, B. Andrew; Cropper, Maureen (Resources for the Future); Muller, Nicholas Z. |
| Abstract: | This study quantifies the cost savings from the Acid Rain Program (ARP) compared with a command-and-control alternative and also examines the impact of trading under the ARP on health damages. To quantify cost savings, we compare compliance costs for non-NSPS (New Source Performance Standards) coal-fired Electricity Generating Units (EGUs) under the ARP with compliance costs under a uniform performance standard that achieves the same aggregate emissions. We do this for the year 2002, the third year of Phase II of the program. We find annual cost savings of approximately $250 million (1995$). To examine the health effects of trading, we compute the health damages associated with observed sulfur dioxide (SO2) emissions from all units regulated under the ARP in 2002—approximately 10.2 million tons—and compare them with damages from a No-Trade counterfactual in which each unit emits SO2 at a rate equal to its allocation of permits for the year 2002, plus any drawdown of its allowance bank. Damages under the No-Trade scenario are $2.4 billion (2000$) higher than under the ARP. This reflects the transfer of allowances from EGUs west of the Mississippi River to units in the eastern US with higher exposed populations. |
| Keywords: | sulfur dioxide, acid rain, performance standards, health effects, pollution permits, cap and trade |
| Date: | 2015–06–12 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-15-25&r=ene |
| By: | Karine Constant (Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS) |
| Abstract: | This paper analyzes the economic implications of an environmental policy when we take into account the life expectancy of heterogeneous agents. In a framework where everyone suffers from pollution, but health status depends also on individual human capital, we find that the economy may be stuck in a trap where inequalities persistently grow, when the initial level of pollution is too high. Therefore, we study whether a tax on pollution associated with an investment in pollution abatement can be used to reduce inequalities and to improve endogenous growth. We obtain that a tighter environmental policy may allow the economy to escape the inequality trap and hence to converge to a long-term equilibrium without inequality, while it enhances the long-term growth rate. However, if inequalities or pollution are initially too high, such a result does not hold for reasonable tax rates. |
| Keywords: | environmental policy, endogenous growth, human capital, Inequality, longevity |
| JEL: | I15 O44 Q58 |
| Date: | 2015–07–07 |
| URL: | http://d.repec.org/n?u=RePEc:aim:wpaimx:1527&r=ene |
| By: | Vietnam Ministry of Planning and Investment; World Bank Group; United Nations Development Programme |
| Keywords: | Environment - Climate Change Mitigation and Green House Gases Macroeconomics and Economic Growth - Climate Change Economics Energy - Energy Production and Transportation Science and Technology Development - Science of Climate Change Environment - Adaptation to Climate Change |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:22055&r=ene |
| By: | Nikos Tsakiris; Panos Hatzipanayotou (Athens University of Economics and Business); Michael S. Michael |
| Abstract: | We construct a general equilibrium model of two regions with cross-border pollution, and with inter-regional (RCM) or international (ICM) capital mobility. Each region uses emission taxes, or intra- regionally, or inter-regionally tradable emission permits to reduce pollution. We show that the non-cooperative settings of all three instruments are always inefficient relative to their cooperative settings. When regions are symmetric, then (i) with RCM the non-cooperative setting of intra-regionally tradable emissions permits is welfare superior to that of the other two instruments, and (ii) with ICM the non-cooperative settings of intra-regionally tradable emission permits and of emission taxes are equivalent and superior to that of inter-regionally tradable emission permits. |
| Keywords: | Cross-border pollution, Tradable emission permits, Capital mobility, Welfare ranking |
| JEL: | F18 F21 H21 |
| Date: | 2015–07–17 |
| URL: | http://d.repec.org/n?u=RePEc:aue:wpaper:1513&r=ene |
| By: | Debabrata Chattopadhyay; Rhonda L. Jordan |
| Keywords: | Environment - Climate Change Mitigation and Green House Gases Energy - Energy and Environment Power and Energy Conversion Energy - Energy Production and Transportation Environment - Environment and Energy Efficiency |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:21764&r=ene |
| By: | Joana Castro Pereira (Lusíada University) |
| Abstract: | South America is one of the most vulnerable regions to climate change, whose impacts can undermine the continent’s development. Nevertheless, a) it is very rich on natural resources; b) hydroelectricity plays an important role in its electric energy matrix; and c) the regional carbon emissions profile focuses on deforestation, agriculture and cattle raising. Therefore, the continent has an intrinsic potential to move towards a low carbon economy. Since there is a strong possibility of productive complementarity between countries, green energy integration in the region may be the best path to meet some of the challenges that lie ahead. Brazil is the continent’s largest economy, largest market and the holder of the largest generating facilities, and has emerged as the dominant figure in the energy integration project. Furthermore, the country is the ‘green pole’ of the region and has used South America energy integration processes as key-elements for consolidating its regional leadership. Thus, it seemed fair to assert that Brazil had the potential to lead the continent to a low carbon economy. However, and even though there have always been obstacles to the achievement of such an ambitious goal, some significant challenges have recently arisen: the Pacific Alliance, which has been increasing Mexico’s influence over South America; and the Brazilian political, economic and social situations’ deterioration from 2013 until today. So, this paper aims to analyze these two challenges and understand how they jeopardize a regional green energy integration process in South America. |
| Keywords: | South-America, Energy Integration, Brazil, Pacific Alliance |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:2604455&r=ene |