|
on Energy Economics |
| By: | Lynes, Melissa; Featherstone, Allen |
| Abstract: | Over the last two decades a large number of energy policy changes have occurred specifically with regards to renewable energy. This paper considers how these changes in renewable energy policy affect the production efficiencies of power plants that use renewable and/or nonrenewable energy inputs for electricity production. Using nationwide plant level data from 2003 – 2012 pure technical efficiency is estimated. This study considers the efficiencies of both renewable and nonrenewable energy sources. In addition, this study considers how state level renewable energy policies affect the efficiencies of power plants. In general, this study finds that renewable energy policies do not reduce the efficiencies of electricity generation from a technical aspect. |
| Keywords: | DEA, Electricity Generation, Renewable Energy Policy, Environmental Economics and Policy, Production Economics, D20, L94, Q40, Q48, |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:205674&r=ene |
| By: | Cai, Yongxia; Beach, Robert H. |
| Abstract: | Maintaining and improving future food and energy security poses key challenges globally, especially in the face of climate change and climate mitigation. a computable general equilibrium (CGE) model -- the Applied Dynamic Analysis of the Global Economy model focusing on agriculture and land use (ADAGE-ALU), is used to examine how the global economy, especially energy, agriculture and land use, responds when facing these challenges. Despite continued increases in land productivity and energy efficiency in future decades, the effects of population and economic growth would dominate, leading to global increases in agricultural production, but also rising food and energy prices as well as continually growing GHG emissions in the BAU scenario. Comparing the climate change scenario with the BAU scenario, there are substantial reductions in global crop production and significant further increases in food prices, but little change in fossil fuel and biofuel production and energy prices, and only mild increases in CO2 emissions due to land-use changes. Relative to the BAU case, the implementation of a carbon tax on emissions other than those from land use change leads to the expansion of global biofuel production and a shift in the mix of crops produced towards those used as biofuels feedstocks, raises food prices, and reduces oil consumption and price slightly. Meanwhile, GHG emissions are slightly reduced as a result of lower oil consumption. In the REDD scenario, some cropland is afforested to store carbon, leading to a moderate rise in food and energy prices and significant GHG emission reductions. When climate change, REDD scenarios are implemented together, we see even higher reductions in global crop production and larger food price increases, along with greater reduction in GHG emissions compared with the CC scenario. |
| Keywords: | Agricultural and Food Policy, Environmental Economics and Policy, Land Economics/Use, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:205717&r=ene |
| By: | Winchester, Niven; Reilly, John M. |
| Abstract: | What will large-scale global bioenergy production look like? We investigate this question by developing a detailed representation of bioenergy in a global economy-wide model. We develop a scenario with a global carbon dioxide price, applied to all anthropogenic emissions except those from land-use change, that rises from $15 per metric ton in 2015 to $59 in 2050. This creates market conditions favorable to biomass energy, resulting in global non-traditional bioenergy production of ~150 exajoules (EJ) in 2050. By comparison, in 2010 global energy production was primarily from coal (139 EJ), oil (175 EJ) and gas (108 EJ). With this policy, 2050 emissions are 16% less in our Base Policy case than our Reference case, although extending the scope of the carbon price to include emissions from land-use change would reduce 2050 emissions by 57% relative to the same baseline. Our results from various policy scenarios show that lignocellulosic (LC) ethanol may become the major form of bioenergy, if its production costs fall by amounts predicted in a recent survey and ethanol blending constraints disappear by 2030; however, if its costs remain higher than expected or the ethanol blend wall continues to bind, bioelectricity and bioheat may prevail. Higher LC ethanol costs may also result in expanded production of first-generation biofuels (ethanol from sugarcane and corn) so that they remain in the fuel mix through 2050. Deforestation occurs if emissions from landuse change are not priced, although the availability of biomass residues and improvements in crop yields and conversion efficiencies mitigate pressure on land markets. As regions are linked via international agricultural markets, irrespective of the location of bioenergy production, natural forest decreases are largest in regions with the lowest political constraints to deforestation. The combination of carbon price and bioenergy production increases food prices by 2.6%–4.7%, with bioenergy accounting for 1.3%–2.6%. |
| Keywords: | Bioenergy, climate policy, land-use change, greenhouse gas emissions, Environmental Economics and Policy, Q24, Q42, Q54, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:205106&r=ene |
| By: | O'Rear, Eric G.; Sarica, Kemal; Tyner, Wallace E. |
| Abstract: | I. Overview For close to a century fuel taxes have been used to finance the building, operations, and maintenance of the US transportation system. The contributions of tax revenues in real terms, however, have been consistently declining in the recent decade as average national tax rates have not budged since 1993 and failed to keep up with inflation – resulting in substantial losses in purchasing power. This coupled with the fact that average fuel economy levels for newer light-duty vehicles continues to improve given recent government legislation, fewer tax revenues can be recouped. Costs associated with constructing and maintaining transportation systems have increased over time, growing at faster rates than fuel tax revenues. The impacts of declining revenue streams on US highways have led to almost $130 billion in economic losses (in the form of increased vehicle repair and time costs). In order to correct the problem of eroding tax revenues groups such as the National Surface Transportation Infrastructure Finance Commission support the replacement of the current tax system with a tax on vehicle miles traveled (VMT) with hopes of encouraging less driving and creating more sustainable streams of revenue. Unlike a fuel tax, mileage charges directly target miles driven by consumers, which helps to lower fuel use and driving externality costs. One of the primary issues with the tax, however, is that it does not encourage the use of more fuel-efficient vehicles. So any reductions in emissions achieved by less driving could be displaced by the emissions of more heavily used, dirtier conventional automobiles. Our study compares a national VMT tax with the existing volumetric fuel tax system, observing the interaction between mileage charges and enacted policies such as the Renewable Fuels Standard (RFS) and the Corporate Average Fuel Economy (CAFE) Standard. II. Methodology The responsiveness of LDVs to a series of mileage taxes is observed using an elastic version of the US EPA MARKAL model. MARKAL is a bottom-up, demand-driven, partial equilibrium model that relies on linear optimization techniques to simultaneously minimize total system costs and maximize net total surplus. Exogenous end-use demands are satisfied using the most efficient and least-cost combination of technologies and primary resource usage rates chosen by the model. It operates on data supplied by the EPA National MARKAL database, which includes information on the five primary economic sectors. Existing fuel taxes are compared with three versions of a mileage-based tax. The first is a VMT charge ($/mile) set equivalent to the baseline national average gasoline tax ($0.49/gallon) and increases 1% annually. The second tax is tuned to achieve similar tax revenues as our series of baseline volumetric fuel taxes over time. The final VMT charge internalizes congestion, air pollution, oil dependency, and other driving-related externality costs. It is imperative that consideration for current environmental regulations and programs that either directly or indirectly impact the transportation sector is given to better understand differences in the ways mileage taxes interact with these policies. The current Renewable Fuels Standard is modeled alongside President Obama’s recent increases in CAFE standards which require that average fuel economy reach 54.5 miles per gallon by 2025 for LDVs. Plug-in hybrid-electric vehicles (PHEV) purchased after 2010 are eligible for a tax credit worth up to $7,500 based on the battery capacity. For simplicity, we assume that the $7,500 credit is applicable to all PHEVs and is deducted from annual investment costs for each type of plug-in hybrid vehicle III. Results Our first series of results in which we compare current fuel taxes to VMT tax rates set according to baseline fuel economy levels (Case 1), suggest that mileage charges begin to generate more revenue after complete implementation of newer CAFÉ standards in year 2025. Consumers respond to higher CAFE standards by driving more energy-efficient vehicles like PHEVs. These vehicles escape paying fuel taxes either partially or completely by using electricity instead of gasoline – thereby resulting in fewer fuel tax revenues. Under mileage taxes they face similar taxes as conventional vehicles and will now have a greater contribution to tax revenues. Case 2 directly contrasts fuel taxes and revenue-neutral mileage taxes. We discover that the revenue-neutral taxes fail to achieve any additional reductions in VMT. And the LDV fleet will experience an average loss in energy-efficiency as the tax structure switches from fuel to mileage taxes. CAFE increases and PHEV credits modeled help ensure that minimum fleet average efficiency will be achieved. However, VMT taxes prevent efficiency levels from improving much beyond this point partly due to their discouraging of the use of plug-in hybrid vehicles. Market responses to VMT taxes urge the substitution of the heavier gasoline-ethanol blend E85 (15% gasoline/85% ethanol) to one comprised of only 10% ethanol (E10). The implications of lower ethanol demands on the RFS are significant, as cellulosic ethanol is no longer used to meet fuel demands. However, there is a ramp up in the production of cheaper thermochemical fuels in order to satisfy RFS biofuel requirements. Similar to Case 2, internalizing driving externalities within VMT rates (Case 3) produce far greater reductions in miles driven, fuel use, and transportation sector emissions than fuel taxes internalizing similar externality costs. The switch from E85 to E10 occurs as well but at a much larger magnitude given higher VMT tax rates. IV. Conclusion Our work removes some of the ambiguity surrounding VMT taxes by confirming that mileage taxes have the ability to produce more revenues at both the state and federal levels at the expense of the overall LDV fleet becoming less fuel-efficient; and depending on their level of stringency, they can produce rather noticeable reductions in miles driven, total energy use, and greenhouse gas emissions. There exists potential for economic losses which continue to deepen as VMT tax rates increase. In other words, the higher VMT tax rates become, the more harmful they will be to US economic performance. Switching tax schemes showcased the possibility of spurring variations in the types of “green” fuels consumed. Mileage taxes have proven that they could potentially jumpstart the production of thermochemical gasoline and diesel replacing cellulosic ethanol as a part of the cellulosic biofuel requirement identified under the national RFS. |
| Keywords: | gasoline taxes, mileage taxes, MARKAL, Resource /Energy Economics and Policy, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:205296&r=ene |
| By: | P. Fabbri; A. Ninni |
| Keywords: | BRICS, environmental problems, energy |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:par:dipeco:2015-ep02&r=ene |
| By: | He, Jen Zheng |
| Keywords: | fuel efficiency, heavy-duty trucks, vehicle miles traveled, shipping efficiency, diesel fuel price, Demand and Price Analysis, Resource /Energy Economics and Policy, Q41, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:205104&r=ene |
| By: | Xian, Hui; Colson, Cregory; Mei, Bin; Wetzstein, E. Wetzstein |
| Abstract: | Real options is employed for investigating the lack of incentives for U.S. coal-power plants to cofire wood pellets. Results indicate that despite a thriving U.S. wood-pellet industry to supply EU demand, the price differential between wood pellets and coal and the muted level of fuel volatility renders U.S. cofiring unsupportable. |
| Keywords: | coal, electricity, real options, wood pellets, Environmental Economics and Policy, Resource /Energy Economics and Policy, Risk and Uncertainty, |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saea14:162484&r=ene |
| By: | Jung, Jinho; Tyner, Wallace E. |
| Abstract: | Solar energy is expanding in the US and globally recently in part because of policies encouraging its adoption such as net metering, financing tax benefits, or federal tax credits. Indiana is also expanding solar energy with other renewables to protect its environment because 95% of electricity is generated from coal (U.S. Energy Information Administration (U.S. EIA), 2014). Much of the attention to date on the expansion of solar energy has been on adopting solar PV systems in residential sectors. However, farm businesses offer an important opportunity as energy expenses account for 6% of total farm expenses on nationwide average (Brown and Elliot, 2005). As this analysis will show, the ability of farm and other businesses to depreciate the solar investment makes it much more economically attractive. In this analysis, we examine the economics of solar PV systems in Indiana in farm businesses and residential areas. We also compare these two sectors under different policy combinations so that we can see how they are different from an economic perspective. If adopting solar PV systems is shown to be cost competitive, it may be helpful for farm businesses to reduce energy expenses. We use stochastic benefit-cost analysis to evaluate the economics of solar PV systems under operating conditions in Indiana. A key indicator of economic viability is a comparison between the annualized cost of installing a solar PV system in each sector, a residence and a farm business, and the expected annualized electricity price from grids per kWh. We use the stochastic analysis to capture uncertainties in some key uncertain variables, and this makes the annualized costs probability distributions, not just a single deterministic value, so that our analysis can be more realistic. Through the distributions of the annualized costs, we also can calculate the probability that solar can be cheaper than grid electricity under different policy combinations in each sector. The analysis is done using Excel spreadsheets with the @Risk add-in to handle uncertainty. The uncertain variables were future grid electricity price, solar panel output rate of reduction over time, and solar panel failure rate. In addition, we conduct sensitivity analysis on several variables to see how changes in variables may affect the robustness of our results. The output is distributions of annualized costs of grid electricity, solar electricity, and the difference between the two. With the difference distribution, we are able to calculate the probability that solar electricity will be less expensive than grid electricity. Thus we can also evaluate how the economics of the solar PV system differs between a residence and a farm business. We do the analysis under three different combinations of policies: 1) Current policy set – federal tax credit, net metering, interest deduction for initial investment, and for the farm business depreciation of the solar investment 2) Level playing field policy set – carbon tax on grid electricity, no federal tax credit, net metering, interest deduction, and depreciation for both business and residential cases 3) No net metering – here we remove net metering from cases 1 and 2 We find that there is a 92% probability that a solar system in farm businesses is less expensive than grid electricity under current policy. Residential solar has a 50% chance of being less expensive than the grid under current policy. Under the level playing field case, residential and farm solar both show an 84% chance of being less expensive than the grid. Should net metering be removed, residential solar becomes un-economic while farm solar is still attractive even if it is not as much as with net metering in place. We did the analysis for two system sizes, and as would be expected, removing net metering causes more loss for the larger installation. The solar PV system may become a good option for farm businesses due largely to the added depreciation deduction. Another important result is that the level playing field case with carbon tax and depreciation allowed for all provides greater benefits than the current federal solar tax credit. From the sensitivity analysis, panel lifetime and discount rate are shown to be quite important in driving solar economics as would be expected. O&M costs are much less important. This analysis shows that the economics of solar energy are driven by policy considerations, which comes as no surprise. However, the difference in results under current policy between business and residential installations will be of interest to many. The fact that under current policy, solar is quite attractive to farm businesses will generate discussion. We will provide some case examples in the discussion. Also, the level the playing field case will be of significant interest. For profit electric companies can depreciate their capital investment, but homeowners cannot depreciate their solar investment. Also grid electricity imposes a carbon cost on society that solar does not. The federal tax credit is available for renewable energy but not fossil. Once we correct for these differences, we find that solar is more attractive than grid electricity, and this result will be of considerable interest. |
| Keywords: | Solar economics, solar photovoltaic systems, policy instruments, Environmental Economics and Policy, Farm Management, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:205449&r=ene |
| By: | Brown, Jason P.; Fitzgerald, Timothy; Weber, Jeremy G. |
| Abstract: | Innovation-spurred growth in oil and gas production from shale formations led the U.S. to become the global leader in producing oil and natural gas. Because most shale is on private lands, drilling companies must access the resource through private lease contracts that provide a share of the value of production – a royalty – to mineral owners. We investigate the competitiveness of leasing markets by estimating how much mineral owners capture geologically-driven advantages in well productivity through a higher royalty rate. We estimate that the six major shale plays generated $39 billion in private royalties in 2014, however, extraction firms capture most of the benefit from resource abundance, with a doubling of the ultimate recovery of the average well in a county leading to a 2 percentage point increase in the average royalty rate (an 11 percent increase). The low pass-through is consistent with firms exercising market power in private leasing markets. |
| Keywords: | royalty payments, oil, natural gas, mineral rights, Community/Rural/Urban Development, Environmental Economics and Policy, Resource /Energy Economics and Policy, L71, R11, Q32, Q35, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:205657&r=ene |
| By: | Wiggins, Seth; Etienne, Xiaoli |
| Abstract: | This paper uses a structural vector autoregression (SVAR) to model the US natural gas market. Domestic natural gas production has dramatically increased in the late 2000’s as producers implemented improved horizontal drilling and hydraulic fracturing techniques to extract natural gas from shale deposits. This paper applies techniques developed in the crude-oil literature that incorporate time-varying parameters (TVP), which more realistically model a changing market. Results suggest the supply curve associated with aggregate demand shocks, residential demand shocks, and other natural gas market demand shocks has become more elastic during the latter part of the sample. This latter period corresponds to the recent rapid expansion in shale gas production. By contrast, the curvature of the supply curve associated with precautionary inventory demand shocks has remained at a stable level for most of the sample since 2000, and has not changed significantly even with the rapid growth of shale gas production. Furthermore, it appears that in the new era of ample natural gas supply, the demand curve has also become more elastic, partly reflecting greater flexibility in fuel use substitution. |
| Keywords: | US Natural Gas Market, Structural Vector Autoregression, Time-Varying Parameters, Shale Gas Production, Resource /Energy Economics and Policy, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:205788&r=ene |
| By: | Tsvetkova, Alexandra; Partridge, Mark |
| Abstract: | The U.S. shale boom has intensified interest in how the expanding oil and gas sector affects local economic performance. Research has produced mixed results and has not compared how energy shocks differ from equal-sized shocks elsewhere in the economy. What emerges is that the estimated impacts of energy development vary by region, empirical methodology, as well as the time horizon that is considered. This paper captures these dimensions to present a more complete picture of energy boomtowns. Utilizing U.S. county data, we estimate the effects of changes in oil and gas extraction employment on total employment growth as well as growth by sector. We compare this to the effects of equal-sized shocks in the rest of the economy to assess whether energy booms are inherently different. The analysis is performed separately for nonmetropolitan and metropolitan counties using instrumental variables. We difference over 1-, 3-, 6-, and 10-year time periods to account for county fixed effects and to assess responses across different time horizons. The results show that in nonmetro counties, energy sector multiplier effects on total county employment first increase up to 6-year horizons and then decline for 10-year horizons. In metro counties, 1-year differences analysis suggests crowding out though the multipliers are insignificant in longer horizons. We also observe positive spillovers to the nontraded goods sector, while spillovers are small or negative for traded goods. Yet, equal-sized shocks in the rest of the economy produce more jobs on average than oil and gas shocks, suggesting that policymakers should seek more diversified development. |
| Keywords: | employment growth, job multipliers, energy boom effects, instrumental variable approach |
| JEL: | O13 Q33 R11 |
| Date: | 2015–07–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:65754&r=ene |
| By: | Duangnate, Kannika; Mjelde, James W.; Bessler, David A. |
| Abstract: | Potential structural changes among eight North America natural gas spot markets are investigated. Evidence from parameter instability tests of the long-run pricing relationship infers possible structural changes occurred around 2000 and again around 2009. Possible contributing factors to the structural changes around 2000 are U.S. Federal Energy Regulatory Commission Order, California’s electricity crisis, 9/11 terrorist attacks, changes in imports, and increased price volatility. The likely major contributing factor to the break occurring around 2009 is the shale gas revolution. Extreme weather events appear to cause transient instability, which should not be considered structural shifts. Results shade some light on why previous studies have conflicting results; the failure to consider structural changes. Further studies regarding potential structural changes and their effects on the natural gas market are necessary. |
| Keywords: | parameter instability, structural changes, break points, natural gas, Demand and Price Analysis, Financial Economics, Resource /Energy Economics and Policy, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:205661&r=ene |
| By: | Maher, Joe |
| Abstract: | To date, the energy savings from energy-efficiency building retrofits are assessed using ex-ante engineering models. In this paper, new evidence from project-level engineering models reveal a new optimism about the reliability of engineering predictions – findings that counter economists’ concerns about engineering bias. At the same time, results demonstrate the need for empirical evaluations to reform DSM policies. For example, policy makers might increase energy savings by targeting large houses with high energy saving potential, or prioritize retrofit technologies that reduce demand during peak-load seasons – insights that are not available from engineering models. This paper provides the first evaluation of engineering models that uses residential billing data, combined with data on observable characteristics of each residence, to assess the accuracy of project-level engineering predictions. |
| Keywords: | energy efficiency, demand side management, electricity billing data, Environmental Economics and Policy, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy, Q4, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:205981&r=ene |
| By: | Binder, Kyle E.; Mjelde, James W.; Woodward, Richard T. |
| Abstract: | Using a Vector Error Correction Model approach, relationships between REC, SREC, electricity, and natural gas prices in Massachusetts and Connecticut are estimated. Confirming previous studies, the results show that REC prices respond negatively to a shock in electricity prices. Additionally, SREC prices are determined mostly by forces outside of the estimated system. Preliminary evidence is found that REC markets across states are related, but that the markets are fragmented, possibly with high transaction costs. Further analysis is required to clarify some of the results which are currently difficult to understand. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:205644&r=ene |
| By: | Francis, Mwaura; Geoffrey, Okoboi; Gemma, Ahaibwe |
| Abstract: | High dependency on biomass has been associated with energy poverty in Uganda with successful intervention to modern energy expected to results to economic transformation. This paper examines utilization of various forms of cooking energy sources among households using data from the 2005/6 Uganda National Household Survey (UNHS). Results indicate that utilization of modern energy sources was only by 4 percent of households. A multinomial probit model (MNP) was used to estimate coefficient of determinants of energy choices. Determinants of household energy choices were observed as consumption expenditure welfare, residing in urban or rural areas, household size, achievement of education levels beyond primary level and regional location of a household. The study recommended deliberate efforts by government to intervene in addressing low adoption of modern energy especially now that the country has oil and gas reserves. The government should implement policies to encourage private sector involvement in provision of modern energy alternatives, provision of micro-credit for buying equipments and availing modern energy in smaller quantities. |
| Keywords: | economic transformation, energy sources, EPRC, Consumer/Household Economics, Environmental Economics and Policy, Food Consumption/Nutrition/Food Safety, Institutional and Behavioral Economics, Labor and Human Capital, Public Economics, Resource /Energy Economics and Policy, |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eprcrs:184170&r=ene |
| By: | Crago, Christine L.; Stranlund, John K. |
| Abstract: | In this paper we investigate the optimal taxation of CO2 and its co-pollutants. While CO2 is a uniformly mixed stock pollutant, important CO2 co-pollutants like SO2, PM2.5 and PM10 are flow pollutants with spatially differentiated damages. Recent proposals have called for CO2 control that accounts for its effects on emissions of its co-pollutants, which implies that optimal CO2 taxes would have a spatial component. However we demonstrate that setting a CO2 tax that varies from its marginal damage is justified only if co-pollutants are regulated inefficiently. We demonstrate that the optimal CO2 tax deviates from the CO2 marginal damage across sources depending on the source-specific co-pollutant marginal damage, the level of inefficiency in the co-pollutant regulation, and the abatement cost interaction of the two pollutants. An alternative to adjusting CO2 policy to account for the inefficient regulation of a co-pollutant is to address the inefficiency directly by modifying the regulation of the co-pollutant. Since this approach is more efficient in general, we quantify the expected reduction in social costs from this regulation relative to adjusting CO2 taxes. With a simulation of CO2 and SO2 control from the U.S. power sector, we find that setting efficient taxes for both CO2 and SO2 provides a welfare gain that is likely to be many orders of magnitude greater than the gain from adjusting CO2 taxes to account for the inefficient regulation of SO2. |
| Keywords: | multiple pollutants, co-pollutants, carbon tax, SO2 tax, Environmental Economics and Policy, H23, Q53, Q58, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:205594&r=ene |
| By: | Nuñez, Hector M.; Otero, Jesús |
| Abstract: | We employ a pair-wise approach to analyse regional integration in the gasoline and ethanol markets in Brazil. Using weekly price data for these two fuels at the state level over a period of almost 10 years, we find that more than half of the fuel price differentials are stationary, which reveals the importance of allowing for spatial considerations when testing for market integration. We find that the speed at which prices converge to the long-run equilibrium depends upon the distance between states and the similarity between tax regimes. Other demand and supply factors such as population density, number of gas stations and GDP per capita are not statistically significant. |
| Keywords: | Gasoline, ethanol, prices, market integration, distance, Demand and Price Analysis, Resource /Energy Economics and Policy, C33, L11, Q43, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:204306&r=ene |
| By: | Joseph, Mawejje; Lawrence, Bategeka |
| Abstract: | Uganda discovered commercially viable oil deposits in 2006. Estimated oil reserves as of September 2012 stood at 3.5 billion barrels. Since the discoveries, there has been much public debate on the types of public policies that the Government of Uganda (GoU) can implement in order to avoid or minimize the economic, social and political dislocations that have usually accompanied the exploitation of oil and gas in other African countries. It is important to note that the discovery and eventual exploitation of natural resources, such as gas and oil, are necessary but not sufficient conditions for the upheavals that are collectively referred to as “the curse of natural resources.” The reason why many African countries that have significant endowments of commercially viable oil and gas reserves often end up with the curse is that they do not have institutional arrangements that guarantee the rule of law. Without appropriate legal and judicial systems—that is, those that adequately constrain civil servants and politicians—the latter are likely to engage in corruption and other forms of political opportunism, and fail to implement policies to allocate resources efficiently and equitably and hence, enhance human development. It is hoped that Uganda will use its newly-discovered oil and gas resources to promote genuine economic growth and human development. This study employs a perception analysis of the views of key stakeholders on the suitability and impacts of available spending options. |
| Keywords: | growth, oil resources, intergenerational equity, oil and gas value chain, Uganda, Community/Rural/Urban Development, Demand and Price Analysis, Environmental Economics and Policy, Industrial Organization, Institutional and Behavioral Economics, Land Economics/Use, Production Economics, Productivity Analysis, Public Economics, Resource /Energy Economics and Policy, Risk and Uncertainty, |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eprcrs:167526&r=ene |
| By: | Zhou, You |
| Keywords: | freight emission, passenger emission, highway investment, Community/Rural/Urban Development, Environmental Economics and Policy, R4, Q5, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:205676&r=ene |
| By: | Liu, Zheng; Bian, Xiaodong |
| Keywords: | Resource /Energy Economics and Policy, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:205900&r=ene |
| By: | Lang, Markus; Saghaian, Sayed |
| Abstract: | This paper explores the effects of increasing energy production in North Dakota on cropland rents from 2009 to 2011. Results show a small negative impact of natural gas production revenue on average per acre rents. While small, the impact increased steadily over the three year period. |
| Keywords: | shale energy, North Dakota, cropland, rents, energy production, Farm Management, Land Economics/Use, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saea14:162460&r=ene |
| By: | An, Henry; Qiu, Feng; Rude, James |
| Keywords: | Biofuels, renewable fuel standard, multivariate GARCH, price volatility spillover, Agricultural and Food Policy, Crop Production/Industries, Demand and Price Analysis, Resource /Energy Economics and Policy, Q16, Q18, Q42, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:205672&r=ene |
| By: | Mundaca, Gabriela |
| Abstract: | This paper deals with impacts of fossil fuel subsidy reform on economic growth, focusing mostly on the countries of the Middle East and East Africa (MENA) region. We first develop a theoretical growth model, and use it to demonstrate that a country can achieve higher levels of economic growth if the government reduces its energy subsidies. Our empirical work confirms the main results from the theoretical model. That is, a country that initially subsidizes its fossil fuels, and then eliminates or reduces these subsidies, will as a result experience higher economic GDP per capita growth, higher employment, and greater levels of labor force participation, especially among the youth. These effects are strongest in countries where fuel subsidies are generally high, such as those in the MENA Region. We here predict that for a given level of subsidy, a 20 cents average increase in the gasoline and diesel price per liter can increase the GDP per capita growth rate by about 0.46 percent and 0.24 percent, respectively. In the MENA countries, savings in subsidies seem to be earmarked by the region’s governments to health expenditures, education expenditures and public investment in infrastructure. These channels appear to be strong contributing factors to higher long-run growth when fuel subsidies are reduced. |
| Keywords: | energy subsidies, economic growth, public investment |
| JEL: | Q3 Q4 Q43 Q48 |
| Date: | 2015–07–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:65741&r=ene |
| By: | Coon, Randal C.; Bangsund, Dean A.; Hodur, Nancy M. |
| Keywords: | Production Economics, Resource /Energy Economics and Policy, |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:ags:nddsps:190590&r=ene |
| By: | Jared C. Carbone (Division of Economics and Business, Colorado School of Mines); Kenneth J. McKenzie (Department of Economics, University of Calgary) |
| Abstract: | We examine the steady-state impact of a 10 percent reduction in the price of oil using a CGE model of the Canadian economy. The model includes a high degree of disaggregation at both the sectoral and provincial level, international and interprovincial flows of goods and services, labour which is mobile between sectors, capital which is partly mobile both inter-provincially and inter-sectorally, and equilibrium exchange rate adjustments arising from the oil price shock. The key result of our simulations is that--on balance--a negative oil price shock leaves Canadians worse off. We also find that the welfare losses associated with a negative oil price shock are shared broadly across the provinces. The corollary, of course, is that a positive price shock leaves Canadians better off. Our results have implications for the presence (or significance) of Dutch Disease in Canada; we argue that the "disease" is just one of a number of effects generated by oil-price changes. |
| Keywords: | resource curse, dutch disease, petroleum markets, Canada, computable general equilibrium |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:mns:wpaper:wp201507&r=ene |
| By: | Bento, Antonio M.; Roth, Kevin D.; Wang, Yiwei |
| Abstract: | The Obama administration seeks to tighten the fuel economy standards in the US and the target is to almost double the miles per gallon (MPG) of vehicles by 2025 comparing to that of 2010. With this new aggressive movement, there is an ongoing discussion about whether auto makers could meet the new standards without providing consumers with vehicles that are much lighter and less powerful. In this paper, we investigate how historical changes in the fuel economy standards impacted technological innovation in the automobile industry and estimate the changes in the rate of innovation in response to the changes in the standards. By decomposing innovation growth into natural growth and growth induced by standard changes, we not only show that standard changes can increase innovation growth but are also able to quantify the induced growth rate with respect to the rate of changes in standards. Such method can provide a more precise prediction of the future technological innovation under new standards. |
| Keywords: | CAFE standards, technological growth, regulation and innovation, fuel economy, vehicle attributes, Environmental Economics and Policy, Research and Development/Tech Change/Emerging Technologies, Resource /Energy Economics and Policy, L2, L5, Q4, Q5, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:206195&r=ene |
| By: | Klotz, Richard; Gurung, Ram; Ogle, Stephen; Paustian, Keith; Sheehan, John; Bento, Antonio M. |
| Abstract: | If emissions from a sector are unobservable, direct emissions policies are unlikely to be extended to this sector. However, alternative policies based on observable quantities may be able to reduce emissions from the unregulated source at costs similar to a first-best policy. This paper evaluates the costs of policy instruments for reducing GHG emissions from cropland agriculture, a large source of emissions that are unobservable, using an integrated biophysical and economic model. Results suggest that policies regulating readily observable quantities can reduce agricultural N2O emissions at costs approaching those of the unavailable emissions tax. However, alternative policies with costs similar to the emissions tax may have considerably different impacts on agricultural sector profit |
| Keywords: | climate policy, mitigation, Environmental Economics and Policy, Q54, Q58, Q15, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:205808&r=ene |
| By: | Deepti Mahajan Mittal |
| Abstract: | In the context of the political and economic changes that have marked Myanmar since 2010, this paper assesses the opportunities for sub-regional energy cooperation between four countries: Bangladesh, China, India and Myanmar, with Myanmar as a node. The paper also analyses the strategic importance of sub-regional energy initiatives, and the politico-economic and social undercurrents that may enhance/impede relationships in the future. A gas exporter and a country with large potential for hydropower development, Myanmar is at the centre of the regional energy policy discourse. The paper explores available opportunities in the trade and development of fossil fuels, hydropower and renewable energy. The emphasis, the paper suggests, needs to be on building win-win partnerships that will harness complementarities. Myanmar stands to gain significant strategic mileage if its decisions are governed by a balance of enlightened self-interest and the need to forge ties with varied political partners. |
| Keywords: | energy, regional cooperation, Myanmar, BCIM |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:pdb:opaper:108&r=ene |
| By: | Ye, Shiyu; Karali, Berna |
| Keywords: | Demand and Price Analysis, |
| Date: | 2015–05–27 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:205595&r=ene |
| By: | Golub, Alla; Cai, Yongyang; Hertel, Thomas; Steinbuks, Jevgenijs |
| Keywords: | global land use, energy prices, uncertainty, dynamic stochastic models, Environmental Economics and Policy, Land Economics/Use, C61, Q15, Q23, Q41, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:205406&r=ene |
| By: | Galinato, Gregmar I.; Graciano, Tim A.; Zhao, Xin |
| Abstract: | This article shows how policies to attract foreign direct investment (FDI) in a polluting sector affect home-country welfare relative to the autarky case. We consider a welfare maximizing country who attracts FDI into a polluting sector, while accounting for environmental quality changes. The government sets the level of environmental regulation and public infrastructure. Foreign investors prefer good infrastructure quality and less environmental regulation. We show that under autarky, environmental regulations are increasing over infrastructure. However, with FDI, optimal environmental regulations may be a subsidy if the benefits from a wage increase outweigh the damages from pollution. Also, we find that if a country has very poor levels of infrastructure it is better off not allowing FDI to enter but as infrastructure quality increases, the result is reversed where welfare with FDI is higher than under autarky. |
| Keywords: | Environmental Regulations, Infrastructure, Welfare, Pollution Haven, Environmental Economics and Policy, International Relations/Trade, Resource /Energy Economics and Policy, F64, Q58, O44, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:205092&r=ene |
| By: | Weaver, R. D.; Tian, Jiachuan |
| Abstract: | The variation of energy prices has been a traditional source of shocks to the real economy. In many cases, this variation has manifested in jumps in energy prices that were characterized by some persistence. From another perspective, energy price volatility has historically been noted and its effects on real economy debated. Historically, the importance of the shocks to the real economy has led them to be labeled as energy crises, as they were argued to have resulted in substantial changes in real prices that induced changes in behavior on the demand and supply sides of the many markets. However, empirical studies of transmission of energy prices into the real economy have produced no consensus and have been challenged by a number of significant specification issues that have resulted in substantial variation in inference drawn from results. Among these issues is the question of completeness of model specification. This paper examines the question of whether such models need to incorporate macroeconomic indicators. Clearly, macroeconomic factors such as interest rates and exchange rates play a role in the determination of energy and commodity prices, however, considerable specification uncertainty characterizes the question of which macro metrics to incorporate. This paper examines this issue from the perspective of weak exogeneity and finds evidence that the parameter estimates associated with time series models that exclude consideration of macro indicators are not compromised by their exclusion. We examine this issue using Italian, U.S. grain, and Brent crude oil prices. |
| Keywords: | Agribusiness, |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iefi15:206240&r=ene |
| By: | Huang, Jin; Divita, Frank; Belova, Anna; Dorn, Jonathan |
| Keywords: | Climate change, health effect, ozone, valuation, unit value, willingness-to-pay, cost-of-illness, mortality, morbidity, NAAQS, attainment cost, Environmental Economics and Policy, Health Economics and Policy, Resource /Energy Economics and Policy, Risk and Uncertainty, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:205627&r=ene |
| By: | Sesmero, Juan P.; Jung, Jinho; Tyner, Wallace E. |
| Abstract: | We adopt a real options approach to quantify transfers to households that are sufficient to induce adoption of solar panels. These transfers are then combined with the panels’ production capacity to obtain a measure of cost-effectiveness of alternative policies that are either in effect, or currently being considered by State governments. Alternative policies are then ranked based on their cost-effectiveness. Generally we find that a combination of net metering and peak-pricing is more cost-effective than the federal tax credit and the solar loan interest tax deduction. |
| Keywords: | solar energy, real options, net metering, peak pricing, cost-effectiveness, Resource /Energy Economics and Policy, Risk and Uncertainty, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:205792&r=ene |
| By: | Livy, Mitchell R.; Gopalakrishnan, Sathya; Klaiber, H. Allen; Roe, Brian |
| Abstract: | We utilize a newly developed stated preference survey to determine preferences for shale drilling and its associated externalities. Examining both willingness to pay (WTP) and willingness to accept (WTA) measures, this research presents evidence of the implications of recent shale gas drilling expansion in northeastern Ohio, and provides guidance for future work on the impacts of shale gas drilling activities on nearby residents. |
| Keywords: | Survey, Shale Drilling, Willingness to Pay, Willingness to Accept, Conjoint Analysis, Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:205390&r=ene |
| By: | Ramsey, Ford |
| Abstract: | Using elements of extreme value theory, I develop a Bayesian modeling approach that is capable of capturing the extremal dependence structures characterizing energy and agricultural prices. This approach is based on asymptotic arguments that hold for many underlying distributions of prices. Positive and negative movements of prices are considered separately which allows for asymmetry. Because the model is applied only to returns designated as extreme, inference does not depend on observations in the main body of the distribution. This is appealing because there is no reason to suspect a priori that the processes generating non--extreme and extreme observations are similar. |
| Keywords: | price analysis, extreme value theory, dependence, Demand and Price Analysis, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy, Q47, Q11, C58, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:205120&r=ene |
| By: | Lee, Eunhee; Han, Doo Bong; Ito, Shoichi; Rodolfo M. Nayga, Jr |
| Abstract: | This paper analyzes the multivariate stochastic volatilities with a common factor which is affecting both the volatilities of crude oil and agricultural commodity prices in both biofuel and non-biofuel use. We develop a stochastic volatility model which has a latent common volatility with two asymptotic regimes and a smooth transition between them. In contrast with conventional volatility models, stochastic volatilities in this study are generated by a logistic transformation of the latent factors, which consists of two components: the common volatility factor and the idiosyncratic component. In this study, we analyze the stochastic volatility model with a common factor for oil, corn and wheat from August 8, 2005 to October 10, 2014 using a Markov-Chain-Monte-Carlo (MCMC) method and estimate the stochastic volatilities and also extract the common factor. Our results suggest that the volatility of oil and grain markets are very persistent since the common factor generating the stochastic volatilities of oil and commodity markets is highly persistent. In addition, the volatilities of oil prices are more affected by a common factor while the volatilities of corn are more determined by the idiosyncratic component. |
| Keywords: | Stochastic Volatility Model, Regime Switching with Smooth Transitions, Common Latent Factor, MCMC, Gibbs sampling, Oil and Grain Prices, Research Methods/ Statistical Methods, Risk and Uncertainty, |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:205771&r=ene |
| By: | Rouhi-Rad, Mani; Brozovic, Nicholas; Mieno, Taro |
| Abstract: | This study develops a framework of search with frictions in the context of tradeable permit markets to explain the trading behavior and search effort of the participants. The study area is the groundwater market of the Twin Platte Natural Resources District, in Nebraska. The results show that overall the market is moving towards Pareto efficiency as irrigation rights are moving from lower value users to higher value users. The results also suggest that quantity of the rights traded affects the search effort of the participants positively. |
| Keywords: | Tradeable permit markets, transaction costs, search costs, groundwater markets, Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:205798&r=ene |
| By: | Kurkalova, Lyubov A.; Randall, Stephen M. |
| Abstract: | This study estimates the elasticities of derived demand for energy inputs for the state of Iowa using a bottom-up simulation model of farmers’ choices of crop rotation, tillage, and nitrogen fertilizer application rate. We find that as diesel prices increase, the changes towards fewer years of corn in rotations and less intensive tillage progress gradually from the lower- to the higher-quality land, and the majority of the decrease in diesel use is attributable to the crop rotation changes rather than to the reduced tillage. The results of analysis suggest that the own-price elasticity of diesel is – 0.135, and the own-price elasticity of the demand for Nitrogen fertilizer is – 0.783. The estimated marginal effects of the changes in energy prices could be used to improve the accuracy of existing, large-scale models of the U.S. energy and agricultural sectors. |
| Keywords: | Energy price elasticity, crop rotation, Demand and Price Analysis, Q11, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:205298&r=ene |
| By: | Mirzabaev, Alisher; Guta, Dawit; Goedecke, Jann; Gaur, Varun; Börner, Jan; Virchow, Detlef; Denich, Manfred; von Braun, Joachim |
| Abstract: | Modern bioenergy is a core ingredient of sustainable economic development as it plays an important role in poverty reduction and green growth. This makes bioenergy innovations critical, especially in developing countries where many households and rural communities rely on traditional bioenergy. Managing the multiple tradeoffs among bioenergy use, agricultural productivity, and ecosystem functions is a major development challenge. Addressing this challenge requires the identification of the drivers, tradeoffs and impacts of bioenergy production, trade and use in the Water, Energy and Food Security Nexus. The key objective of this paper is to provide an analytical framework and assess the track record of policy actions to stimulate modern bioenergy innovation in order to achieve multiple-win outcomes in terms of poverty alleviation, improved health and gender empowerment and environmental sustainability. We begin by describing the global trends and drivers in bioenergy production, trade and use. Secondly, we review the state of the art on impacts and links of bioenergy with the other Nexus components. Thirdly, we suggest a conceptual framework for evaluating the synergies and tradeoffs of bioenergy with other bioeconomic and economic activities along the Nexus. Follow-up empirical research at household and community levels in several developing countries will be based on this framework. Finally, a discussion on the conceptual framework is enriched by insights on the relevant actors, the tools and mechanisms specific to these actors for catalyzing innovations in the bioenergy for development. |
| Keywords: | bioenergy, poverty reduction, food security, decentralized energy, WEF Nexus tradeoffs and synergies, households and communities, innovations, Food Security and Poverty, Research and Development/Tech Change/Emerging Technologies, Resource /Energy Economics and Policy, O13, O33, Q01, Q42, B41, |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:ubonwp:180421&r=ene |
| By: | Liu, Shen; Colson, Gregory J.; Wetzstein, Michael E. |
| Abstract: | The effect of Poisson type policy jumps on biodiesel investment is investigated through the theory of investment under uncertainty. The analysis considers the probability of a policy being implemented if it is not in effect and the probability of it being withdrawn if it is in effect. As an application, the policy switching regime of the discontinuous federal tax credit of $1.00 per gallon on biodiesel is modeled as a Poisson jump process. Results support that time inconsistent government policies do lead to market uncertainty. The analysis reveals a pronounced negative impact on the decisions to invest in a biodiesel refinery. However, results indicate a consistent policy switching regime may not be that disruptive. It is policy uncertainty that drives the option pricing thresholds and a consistent policy switching does not increase the uncertainty. |
| Keywords: | Biodiesel investment, Disruptive biodiesel policy, Poisson policy jumps, Real options, Resource /Energy Economics and Policy, Risk and Uncertainty, Q42, Q48, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:205582&r=ene |
| By: | Zuo, Na; Schieffer, Jack |
| Keywords: | Community/Rural/Urban Development, Labor and Human Capital, Public Economics, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:205359&r=ene |
| By: | Fausti, Scott W.; Van der Sluis, Evert; Qasmi, Bashir A.; Lundgren, Jonathan |
| Abstract: | The effects of transgenic crop and federal biofuel policy (ethanol) on state-level cropping patterns in the Corn Belt region are investigated during 1996-2012. Empirical evidence generated by a random intercept model with fixed effects indicates corn production was positively impacted by these factors, but the effects across states are heterogeneous. |
| Keywords: | GMO diffusion, corn production, biofuel policy, longitudinal analysis, Crop Production/Industries, Resource /Energy Economics and Policy, Q1, |
| Date: | 2014–01–16 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saea14:162468&r=ene |
| By: | Hu, Lijiao |
| Abstract: | This paper investigates how payments for carbon offsets and bioenergy impact the optimal management of hardwood forests under conditions of risk and price uncertainty that represents by the use of an E-V model. The results show that higher carbon price increases LEV and rotation age; fire risk decreases LEV and rotation age. |
| Keywords: | carbon sequestration, catastrophic risk, price uncertainty, Hartman model, Environmental Economics and Policy, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saea14:162566&r=ene |
| By: | Hao, Na; Colson, Greg; Wetzstein, Michael |
| Abstract: | U.S. ethanol expansion objectives are to improve both energy security and the environmental. However, this expansion has raised issues concerning its detrimental impacts on the price volatility of developing countries’ agricultural commodities. These concerns are addressed by empirically investigating the relations among U.S. ethanol and corn markets with developing countries’ corn prices. Results indicate that U.S. ethanol demand impacts on developing countries’ corn prices vary by country. Further, results reveal that the transmission effects of U.S. ethanol shocks are systematically stronger for countries with higher food import dependency and U.S. food aid. |
| Keywords: | Ethanol, Food security, Panel structural vector autoregression, World hunger, Food aid, Agribusiness, Agricultural and Food Policy, Demand and Price Analysis, Food Security and Poverty, International Relations/Trade, Resource /Energy Economics and Policy, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:205580&r=ene |