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on Energy Economics |
| By: | John List; Robert Metcalfe; Michael Price; Florian Rundhammer |
| Abstract: | The literature has shown the power of social norms to promote residential energy conservation, particularly among high usage users. This study uses a natural field experiment with nearly 200,000 US households to explore whether a financial rewards program can complement such approaches. We observe strong impacts of financial rewards, particularly amongst low-usage and low-variance households, customers who typically are less responsive to normative messaging. Our data thus suggest important policy complementarities between behavioral and financial incentives: whereas non-pecuniary interventions disproportionally affect intense users, financial incentives are able to affect substantially low-user, "sticky households." |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:feb:natura:00597&r=ene |
| By: | Lionel Fontagné (PSE (Paris 1) and CEPII); Jean Fouré (CEPII) |
| Abstract: | We address in this paper the future geography of production, migration and energy at the world level, and the consequences for the largest European countries. We take scant account of the wide range of possible evolutions of the world economy in terms of technological progress and diffusion, education, demography including migrations and finally energy price and efficiency. Taking a 2035 horizon, we examine how world trade patterns will be shaped by the changing comparative advantages, demand, and capabilities of different regions, and what will be the implications in terms of location of value added at the sector and country level. We combine a convergence model fitting three production factors (capital, labour and energy) and two factor-specific productivities, alongside a dynamic CGE model of the world economy calibrated to reproduce observed elasticity of trade to income. Each scenario involves three steps. First, we project growth at country level based on factor accumulation, demography and migration, educational attainment and efficiency gains, and discuss uncertainties related to our main drivers. Second, we impose this framework on the CGE baseline. Third, we implement trade policy scenarios (tariffs as well as non-tariff measures in goods and services), in order to get factor allocation across sectors from the model as well as demand and trade patterns. |
| Keywords: | Growth, Macroeconomic Projections, Dynamic Baselines |
| JEL: | E23 E27 F02 F17 F47 |
| Date: | 2017–02–24 |
| URL: | http://d.repec.org/n?u=RePEc:csl:devewp:425&r=ene |
| By: | Marcos Agurto Adrianzén (Universidad de Piura) |
| Abstract: | This paper examines the effects of long term improved cooking stoves (ICS) usage on selfreported eye irritation symptoms and respiratory health in the Northern Peruvian Andes. To identify the effect of ICS, we exploit field data related to the quasi-random distribution of ICS with faulty iron frames. Our results indicate that ICS long term usage, with an operative chimney, reduces respiratory illnesses and eye discomfort symptoms among housewives. It is also shown that in the case of respiratory health, other household members may benefit from reduced household air pollution (HAP) exposure. |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:ima:wpaper:2016-002&r=ene |
| By: | Rohan Best |
| Abstract: | Does a country’s stock of financial capital affect its ability to achieve energy transitions? This paper uses data for up to 137 countries for the period 1998–2013 to investigate the importance of financial capital for changes in the use of each energy type. I find that financial capital supports transition to more capital-intensive energy types. For high-income countries, financial capital facilitates transitions from fossil fuels to modern renewable energy sources, especially wind. Both private credit from banks and domestic private debt securities support greater shares of wind energy. For lower-income countries, financial capital supports progression from biomass towards fossil fuel energy sources such as coal. I also find that countries with larger stocks of financial capital are more likely to move to more capital-intensive electricity generation systems. |
| Keywords: | energy, financial capital |
| JEL: | O11 O13 Q42 Q43 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:pas:papers:2017-02&r=ene |
| By: | Tsvetkova, Alexandra; Partridge, Mark |
| Abstract: | economic growth and overall regional socioeconomic wellbeing. Entrepreneurship is particularly important for economic health of rural and remote areas. The recent shale boom brought growth to many communities creating new jobs; however, it is unclear how these effects are distributed across self-employed and wage and salary segments of local economies. The resource curse literature suggests that a booming energy sector may crowd out entrepreneurship. Given the self-reinforcing nature of local self-employment and entrepreneurship in general, such a negative impact of expanding energy sector, if present, is likely to suppress future growth prospects in regions that experience the shale revolution. Using SUR and IV approaches and a differencing strategy, this paper estimates the effects of the growth in oil and gas extraction industry on self-employment growth in metropolitan and rural US counties during the 2001-2013 period. The results suggest that after three years, oil and gas sector expansion tends to crowd out self-employment. In contrast, energy sector expansion promotes wage and salary employment growth in nonmetro counties but has crowding out effects in metro counties. Overall, we find that the expanding energy sector suppresses self-employment, especially in rural communities, in line with one mechanism of the resource curse. |
| Keywords: | Entrepreneurship; Oil and Gas Extraction; economic development; regional economics |
| JEL: | L26 O1 O13 P25 |
| Date: | 2017–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:77058&r=ene |
| By: | Jonathan Eyer; Matthew E. Kahn |
| Abstract: | In recent years, the share of U.S electricity generated by coal has fallen from nearly 50% to 33%. The costs of this transition are spatially concentrated, and mining states have already lost income due to the reduced demand for coal. Coal states have enacted policies to encourage local power plants to purchase from within state mines. We document that power plants in states and counties with substantial mining activity are more likely to be coal fired and to purchase more within political boundary coal. These results are robust to including flexible controls for the distance from power plants to mines. While coal states benefits from local protectionism, these efforts impose social costs because coal mining and coal burning creates significant environmental consequences. We quantify these effects and find that a one-percentage point increase in the proportion of coal plants in a NERC region with an in-state coal mine results in approximately 2.3 million additional annual tons of CO2 emissions. |
| JEL: | Q35 Q54 R11 R3 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23190&r=ene |
| By: | Marzio Galeotti (Università degli studi di Milano, Centro Studi Luca D’Agliano, and IEFE-Bocconi); Silvia Salini (Università degli Studi di Milano); Elena Verdolini (Fondazione Eni Enrico Mattei and CMCC) |
| Abstract: | Proponents of the green growth strategy worldwide hold that reductions of harmful greenhouse gas emissions through environmental policy can be pursued together with increased growth and can result in higher competitiveness. Solid tests of this theory are impaired by the lack of appropriate empirical proxies for the commitment to, and stringency of, environmental policy. We contribute to the literature by: (1) computing different indicators of environmental policy stringency, both previously used in the literature and novel, (2) testing to what extent they convey similar insights through a comparison exercise, and (3) showing the implications of using one or the other methodology in an empirical application testing whether countries with more stringent environmental and energy policy have indeed shown historically higher degree of energy efficiency. The application is cast in an Energy Kuznets Curve framework. The analysis quite naturally carries over to the role of, more generally, economic policy. |
| Keywords: | Energy policy, environmental policy, ranking, Energy Kuznets Curve |
| JEL: | Q58 O57 C33 |
| Date: | 2017–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:csl:devewp:412&r=ene |
| By: | Nadia S. Ouedraogo |
| Abstract: | This paper develops a scenario-based model to identify and provide an array of electricity demand in Africa, and to derive them from the African power system of development. A system-based approach is performed by applying the scenario methodology developed by Schwartz in the context of the energy-economic modeling platform ‘Long-range Energy Alternative Planning’. Four scenarios are investigated. The Business as Usual scenario replicates the regional and national master plans. The renewable promotion scenario increases the share of renewable energy in the electricity mix. The demand- and supply-side efficiency scenarios investigate the impact of energy efficiency measures on the power system. The results show an increase in electricity demand by 4 per cent by 2040, supply shortages, and high emissions of greenhouse gases. Contrary to expectations, the renewable energy scenario did not emerge as the best solution to a sustainable electrification of the region. The energy efficiency scenarios have allowed us to draw a sustainable pathway for electrification. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2017-23&r=ene |
| By: | Vance, Colin; Frondel, Manuel |
| Abstract: | To mitigate information asymmetry problems with respect to the thermal quality of houses, many countries have introduced Energy Performance Certificates (EPCs). Using big data on real estate advertisements that cover large parts of the German housing market, this paper empirically investigates the consequences of a shift from a voluntary to a mandatory quality disclosure regime on the offer prices of houses. Motivated by a stylized theoretical model, we test the following key hypothesis: Prices for houses whose owners would not voluntarily disclose their house’s energy consumption in real estate advertisements should decrease upon a shift to a mandatory disclosure scheme. Employing an instrumental variable approach to cope with the endogeneity of disclosure decisions, our analysis demonstrates the relative advantage of mandatory over voluntary disclosure rules. |
| JEL: | D82 L15 Q58 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145815&r=ene |
| By: | Marz, Waldemar; Pfeiffer, Johannes |
| Abstract: | We analyze monopoly power in a market for a complementary fossil resource like oil in a two country/two period model with international trade in general equilibrium. Focusing on the complex interplay of capital and resource market, we elaborate how these effects feed back into the resource monopolist's extraction decision. His level of knowledge about the economic structure thereby plays a key role. The accumulation of own capital assets over time, together with a recognized influence of extraction on the interest rate, can lead the monopolist to accelerate or postpone extraction. Considering the interaction of resource market and global capital accumulation poses an incentive for the monopolist to accelerate extraction and to exploit the importers' increased resource addiction in the future. The conservationist bias of resource market power can be increased, dampened or reversed through the general equilibrium effects. |
| JEL: | D42 D90 Q30 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145876&r=ene |
| By: | Schmidt, Robert; Kovac, Eugen |
| Abstract: | A standard result from the game theoretic literature on international environmental agreements is that coalitions are either `broad but shallow' or `narrow but deep'. Hence, the stable coalition size is small when the potential welfare gains are large. We modify a standard climate coalition game by adding a - seemingly - small but realistic feature: we allow countries to delay climate negotiations until the next `round' if a coalition forms but decides to remain inactive. It turns out that results are surprisingly different under this modification. In particular, a large coalition with deep emissions cuts forms if countries are sufficiently patient. Our results also indicate that countries should try hard to overcome coordination problems in the formation of a coalition. A more cooperative outcome may then be reached, and it may be reached more quickly. |
| JEL: | D62 F53 Q54 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145481&r=ene |
| By: | Shuo Cao (Shenzhen Stock Exchange); Hongyi Chen (Hong Kong Institute for Monetary Research) |
| Abstract: | This paper identifies five factors that can capture 95% of the variance across 39 US dollar exchange rates based on the principal component method. A time-varying parameter factor-augmented vector autoregressive (TVP-FAVAR) model is used to analyze the determinants of movements in these exchange rates, revealing that impact of global oil prices and China¡¯s growth has increased significantly since 2008. In particular, shocks to these two fundamentals drive the movements of both commodity and non-commodity currencies recently. The impact of monetary policy shocks on the currency pairs is comparatively small. |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:hkm:wpaper:042017&r=ene |
| By: | Valeria Di Cosmo (Fondazione Eni Enrico Mattei and Economic and Social Research Institute); Laura Malaguzzi Valeri (Economic and Social Research Institute) |
| Abstract: | We evaluate how increasing wind generation affects wholesale electricity prices, balancing payments and the cost of subsidies using the Irish Single Electricity Market (SEM) as a test system, with hourly data from 1 January 2008 to 28 August 2012. We model the spot market using a system of seemingly unrelated regressions (SUR) where the regressions are the 24 hours of the day. Wind has a negative impact on the system marginal price, with every MWh increase in wind generation (equal to about 0.2% of the average wind generation in our sample) leading to a decrease of the system marginal price of €0.018/MWh, or about 0.3% of its average value. We use time series models to analyse the balancing market and show that wind generation increases balancing payments, as do the forecast errors of demand and wind. Every MWh of additional wind generation is associated with an increase in constraint payments of €3.2, or about 0.01%. Lack of storage increases the impact of wind on balancing payments whereas the lack of interconnection has no effect. Overall, wind decreases costs through its effect on the electricity price more than it increases constraint payments, even when storage is on outage. The effect of wind remains positive after including the cost of subsidies given to wind generation. |
| Keywords: | Wind Generation, Constraints, Storage, Interconnection, Subsidies |
| JEL: | L94 Q42 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2017.10&r=ene |
| By: | Grimm, Michael; Lenz, Luciane; Peters, Jörg; Sievert, Maximiliane |
| Abstract: | Providing electricity to the unconnected 1.1 billion people in developing countries is one of the top political priorities of the international community, yet the costs of reaching this objective are very high. The present paper examines whether the objective and the associated costs are justified by the value that target beneficiaries assign to electricity. We provide experimental evidence on the revealed willingness-to-pay (WTP) for three types of off-grid solar electricity devices. Our findings show that households are willing to dedicate a substantial part of their expenditures to electricity. In absolute terms, though, the WTP does not suffice to reach cost-covering prices. Different payment schemes, which we randomized across our sample, do not alter the WTP significantly. If universal electricity access is to be achieved, direct subsidies might be necessary. We argue that from a public policy perspective it is more rationale to promote off-grid solar than grid-based electrification because of its better cost-benefit performance. |
| Keywords: | Technology adoption, electrification, willingness-to-pay, real-purchase offer game, energy access, Resource /Energy Economics and Policy, D12, O12, O13, Q28, Q41, |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:ubzefd:253528&r=ene |
| By: | Trommsdorff, Maximillian |
| Abstract: | [Introduction] The way we produce food and generate energy substantially matters for major challenges of this century. Agricultural practices affect biodiversity, human health and quality of water; fossil-fuel power stations drive Carbon Dioxide (CO2) emissions exacerbating global warming; and efficiency of both sectors co-determines how many people do have access to food and energy supply. Seen in this light, it seems plausible that both sectors are - at least in most industrial countries - widely regulated (see e.g. Sumner, Alston, and Glauber, 2010; Pearce, 2002). Indeed, externalities, public good characteristics, spillovers, and issues of just distribution are frequently cited to justify regulations. In such an environment and given rapid changes and developments of today’s energy and food branches, it is an indispensable task of efficient governance to constantly monitor and assess technological innovations, either with respect to their eligibility to get supported or with respect to needs of restriction or prohibition. Recent examples of such a process entered the public debate under the headings of genetically modified crops, promotion of Renewable Energies (RE) or hydraulic fracturing. [...] |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cenwps:032016&r=ene |
| By: | Reardon, Thomas |
| Abstract: | Abstract. This is the first paper showing empirically the share of direct and indirect energy costs in the agrifood supply chains in Asia, or for that matter, in developing countries generally. We show a substantial share of total value chain costs come from energy costs. While the debate has focused on energy costs on the farm, we show that off-farm components of the value chain/food system have a higher share of total energy costs. The energy costs on the farm and off-farm in the food system are correlated with the degree of “transformation” of the value chain and its segments, such as capital intensification and geographic lengthening. While energy costs and food costs are generally correlated in the macro literature, the analysis here allows policymakers to unpack the black box of energy costs in the food sector and ascertain where energy vulnerability challenges are and energy economizing opportunities may best pay off for overall national food security. |
| Keywords: | supply chains, energy costs, food system transformation, Agribusiness, Industrial Organization, International Development, Marketing, L1, D2, D4, O1, Q1, Q4, |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ags:midasp:253438&r=ene |
| By: | Daniel A. Brent; Michael Ward |
| Abstract: | Recent attention has focused on the role of financial literacy as an explanation for anomalies in consumer choice in a range of settings, such savings, retirement investment, and debt. We contribute to this literature on this by analyzing the link between financial literacy and consumer durables in the context of energy efficiency. Energy efficiency is a compelling setting to assess the role of financial literacy on consumer behavior because purchasing energy durables is a complicated dynamic decision, and there is an extensive literature claiming that consumer investments in energy efficiency are sub-optimal. We augment a standard choice experiment for the purchase of a new hot water system by eliciting data on financial literacy. Financial literacy is an economically important and statistically significant determinant of investment in energy efficiency. A one standard deviation increase in our metric of financial literacy increases the willingness to pay for reduced operating costs by 9%. This result is robust to incorporating incentivized experimentally-elicited individual discount rates and risk aversion, as well as standard controls such as income and education, indicating that financial literacy is not merely a proxy for standard demographic characteristics. We show that financial literacy also makes choices more consistent with standard consumer preferences and increases the probability that respondents select the investments with the lowest lifetime discounted costs. The results establish low financial literacy as a specific mechanism driving low investment in energy efficiency. |
| URL: | http://d.repec.org/n?u=RePEc:lsu:lsuwpp:2017-04&r=ene |
| By: | Spyros Arvanitis (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Michael Peneder (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Christian Rammer (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Tobias Stucki (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Martin Wörter (KOF Swiss Economic Institute, ETH Zurich, Switzerland) |
| Abstract: | We contribute to the existing research about policy?induced technology adoption in several ways. First, we suggest a new survey design to measure the energy?related policy environment. Second, we simultaneously estimate the policy effects for the adoption propensity and the adoption intensity simultaneously and, third, we conduct an international comparison of the policy effects. Based on a representative sample of firms for Austria, Germany, and Switzerland we find that policies in all three countries essentially promote the adoption of technologies and they are practically ineffective for the intensity, which poses a great challenge to future policy designs. Voluntary agreements or demand related factors are among the most important drivers for the adoption propensity of green energy technologies. Given the current institutional framework in the surveyed countries, subsidies are more effective in Austria, taxes are more effective in Germany, and demand related factors are relatively more effective in Switzerland. |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:kof:wpskof:16-411&r=ene |
| By: | Trinks, Arjan; Scholtens, Bert; Mulder, Machiel; Dam, Lammertjan (Groningen University) |
| Abstract: | Fossil fuel divestment campaigns urge investors to sell their stakes in companies that supply coal, oil, and gas. However, avoiding investments in such companies can be expected to impose a financial cost on the investor because of reduced opportunities for portfolio diversification. We compare the risk-adjusted return performance of investment portfolios with and without fossil fuel companies over the period 1927-2015. Contrary to theoretical expectations, we find that fossil-free investing does not seem to impair financial performance. These findings can be explained by the fact that fossil fuel company portfolios do not generate above-market performance and provide relatively limited diversification benefits. Significant performance impacts of a divestment strategy, however, are observed over short time frames and when applying divestment to less diversified investment portfolios. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:gro:rugsom:17001-eef&r=ene |
| By: | Sylvain Weber (University of Neuchâtel); Reyer Gerlagh (Tilburg University); Nicole A. Mathys (Federal Office for Spatial Development and University of Neuchâtel); Daniel Moran (Norwegian University of Science and Technology) |
| Abstract: | The amount of CO2 embedded in trade has substantially increased since 1990. We study the trends and some drivers over the period 1995-2009. We find that traded goods tend to have higher emission-intensities compared to average final demand. The second finding is that independently of sector structure, dirty countries tend to specialize in emissionintensive sectors. This finding suggests a comparative advantage mechanism for CO2 and lends support to the hypothesis that trade liberalization tends to increase global emissions. The third finding is that, on average, emission-intensive countries have shifted from trade deficits to surpluses, so a larger share of goods is now produced in emission-intensive countries, consequently increasing global emissions. Finally, our analysis points to coal abundance as an important driver for high levels of both domestic emissions per value added and Sector specialization into emission-intensive sectors. Hence coal abundance is an important driver of net CO2 exports. |
| Keywords: | CO2 embedded in trade, fossil fuel |
| Date: | 2017–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:csl:devewp:413&r=ene |
| By: | Bernt Bratsberg (Frisch Centre); Oddbjørn Raaum (Frisch Centre); Ole Rogeberg (Frisch Centre) |
| Abstract: | Drawing on comprehensive sets of administrative register data, we examine employment and pay structures in the Norwegian petroleum sector between 1992 and 2013, with a particular emphasis on foreign workers. The period covers a number of important changes taking place, with rising oil prices and growing investments during the 2000s and a large influx of labor migrants into Norwegian labor markets following the 2004 expansion of the European Union. Relative to foreign workers in other private†sector industries, we find that the petroleum sector is characterized by greater use of posted workers, a higher occupational skill mix of immigrants, and, for those in skilled occupations, wages on par with native workers. Migrant petroleum workers have shorter durations in the country than other migrants, and the data reveal only modest job mobility to other industries, particularly among high†skilled workers. Nonetheless, the evidence points to spillover effects from the petroleum sector as workers who move on to jobs in mainland industries earn a wage premium relative to those without petroleum experience. |
| Date: | 2017–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:csl:devewp:420&r=ene |
| By: | Kussel, Gerhard; Frondel, Manuel |
| Abstract: | Empirical evidence on the response of German households to electricity price changes is largely lacking. Using data from Germany's Residential Energy Consumption Survey (GRECS), we fill this void by employing an instrumental variable approach to cope with the endogeneity of the consumers' tariff choice. Exploiting our information on the households' knowledge about power prices, we additionally employ an Endogenous Switching Regression Model to estimate price elasticities for two groups of households: those that are informed about prices and those that are price-ignorant. With elasticity estimates falling between -0.91 and zero, we find residential electricity demand to be quite inelastic. Households with price information are sensitive to price changes while the demand of uninformed household is entirely price inelastic. |
| JEL: | Q41 D12 C26 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145728&r=ene |
| By: | Rodemeier, Matthias; Löschel, Andreas; Kube, Roland |
| Abstract: | We investigate consumer inattention and imperfect information regarding the financial benefits of energy-efficient lighting using a randomized controlled trial with 1,084 observations. Results suggest that subjects generally know about cost savings of LED bulbs - the central lighting technology of the future - but largely underestimate the magnitude of these savings. As a result, stated willingness-to-pay for an LED bulb increases on average by 2.53€ through the provision of information on expected lifetime costs. Consumers also confound technology attributes of energy-efficient alternatives, which further explains low adoption rates of the LED technology. |
| Keywords: | Imperfect Information,Inattention,Energy Efficiency Gap,Experimental Economics |
| JEL: | D03 D12 D83 Q41 Q48 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cawmdp:93&r=ene |
| By: | Pangan, Melboy; Mulder, Machiel (Groningen University) |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:gro:rugsom:16017-eef&r=ene |
| By: | Lionel Fontagné (PSE (Paris 1) and CEPII); Jean Fouré (CEPII); Gianluca Santoni (CEPII) |
| Abstract: | Taking a 2035 horizon, we examine how world energy consumption and emission patterns will be shaped by the changing demand and technological capabilities of different regions. We combine a convergence model fitting three production factors (capital, labour and energy) and two factor-specific productivities, along with a dynamic CGE model of the world economy. We consider three possible “worlds†with very different energy scarcity, and how Copenhagen pledges change economic agents’ calculus in each of these three situations. We find that the most dramatic changes in terms of location of value added are to be expected from the intrinsic differences among the three considered “worlds†, not so much in terms of economic impact of environmental pledges. |
| Keywords: | Growth, Macroeconomic Projections, long run, global economy |
| JEL: | E23 E27 F02 F47 |
| Date: | 2017–02–24 |
| URL: | http://d.repec.org/n?u=RePEc:csl:devewp:426&r=ene |
| By: | Spyros Arvanitis (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Michael Peneder (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Christian Rammer (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Tobias Stucki (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Martin Wörter (KOF Swiss Economic Institute, ETH Zurich, Switzerland) |
| Abstract: | The present study investigates the effects of energy-related technologies on economic performance at firm level. We distinguish clearly between adoption and use of energy-related technologies (process innovation in the broad sense) and product innovation in energy-related fields. We take into consideration four energy-related policy instruments (and expected demand for energy-related new products and services). We investigate the possibility of indirect effects of policy on performance via adoption or innovation by interacting adoption and innovation variables with policy instrument dummies. We test our hypotheses not only for the pooled data but also separately for the three countries (Austria, Germany, Switzerland) that are taken into consideration in this study. We find a positive direct effect of investment expenditures for energy-related technologies on labour productivity and a positive indirect effect of energy taxes via investment in energy-related technologies. We find neither direct nor indirect effects of product innovation in energy-related products on labour productivity. No differences among the three countries could be detected. |
| Keywords: | Use of energy-related technologies, Energy-related innovation, Policy instruments, Productivity |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:kof:wpskof:16-419&r=ene |
| By: | Bruno Merven; Channing Arndt; Harald Winkler |
| Abstract: | This paper presents some methodological improvements made to the linked SATIM–eSAGE energy-economy-environment modelling framework for analysing energy and climate policy in South Africa. The improvements include the linking of the households and the other economic sectors of the eSAGE economy-wide model to the SATIM energy model. Two scenarios are used to illustrate the benefits of having the new links, which include an energy efficiency scenario and an ambitious climate mitigation scenario. The results show that there are significant socio-economic benefits in having a more energy-efficient economy. The work presented in the paper provides some solid foundations for further work on the energy-economy-environment policy arena for South Africa. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2017-40&r=ene |
| By: | Giorgia Callegaro; Luciano Campi; Valeria Giusto; Tiziano Vargiolu |
| Abstract: | In this paper we study the pricing and hedging of structured products in energy markets, such as swing and virtual gas storage, using the exponential utility indifference pricing approach in a general incomplete multivariate market model driven by finitely many stochastic factors. The buyer of such contracts is allowed to trade in the forward market in order to hedge the risk of his position. We fully characterize the buyer’s utility indifference price of a given product in terms of continuous viscosity solutions of suitable nonlinear PDEs. This gives a way to identify reasonable candidates for the optimal exercise strategy for the structured product as well as for the corresponding hedging strategy. Moreover, in a model with two correlated assets, one traded and one nontraded, we obtain a representation of the price as the value function of an auxiliary simpler optimization problem under a risk neutral probability, that can be viewed as a perturbation of the minimal entropy martingale measure. Finally, numerical results are provided. |
| JEL: | C1 |
| Date: | 2017–02–04 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:68953&r=ene |
| By: | Spyros Arvanitis (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Sandra Gottschalk (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Michael Peneder (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Christian Rammer (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Tobias Stucki (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Martin Wörter (KOF Swiss Economic Institute, ETH Zurich, Switzerland) |
| Abstract: | This paper investigates the impact of energy policies on the export performance of firms. There has been a long policy debate on potentially negative impacts of cost-increasing energy policies on international competitiveness. We use firm-level data from three countries with similar industry structure but different energy policies: Germany, Switzerland, and Austria. We rely on firm manager assessments on the relevance of energy policy (in terms of taxes, regulations, standards, subsidies and demand stimulation) for their firm operation and link data on the adoption and development of new energy technologies. Regression analyses and matching approaches both show very few impacts of energy policy on export performance, suggesting that either policy impacts on firms’ cost are negligible in the period of study (2012 to 2014) or likely negative impacts are balanced by the adoption of new technology. |
| Keywords: | Energy policy, Technology adoption, Competitiveness, Export, Matching approach |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:kof:wpskof:16-418&r=ene |
| By: | Arik Levinson (Georgetown University and NBER) |
| Abstract: | This project uses the historical experience of US states to ask why energy intensity has declined in some places more than in others, and whether that difference can help provide guidance for other states and countries to pursue less energy-intensive (and therefore less pollution-intensive) economic growth. There are several advantages to studying US states. The variation in energy intensity across states has been similar to the changes across countries, and some states – notably California – have been held up as models for the rest of the world by international organizations such as the World Bank. More importantly, the industrial composition of US states can be studied at a highly disaggregated level. The 473 six-digit NAICS codes in the manufacturing sector are measured comparably across states, ameliorating concerns about industry definition or aggregation bias. And finally, if California, Texas, New York and Florida were independent countries, they would rank among the world’s top twenty largest economies. What happens in individual US states matters not just for local and US national policy but for the climate across the globe. I show that US energy intensity fell by 40 percent between 1982 and 2007; that much of that decline was in the industrial sector; but that the decline is not explained by the decreasing industrial share of the US economy or the changing composition of the industrial sector. Across US states, prices and policies are correlated with the decreasing share and composition of manufacturing, but not with the technique of production, which appears to be the most important source of US energy intensity gains. |
| Date: | 2017–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:csl:devewp:414&r=ene |
| By: | Samuel Carrara (Fondazione Eni Enrico Mattei (FEEM) and Centro Euro-Mediterraneo sui Cambiamenti Climatici (CMCC)); Thomas Longden (University of Technology Sydney, Centre for Health Economics and Research Evaluation (CHERE)) |
| Abstract: | This paper describes changes to the modelling of the transport sector in the WITCH (World Induced Technical Change Hybrid) model to incorporate road freight and account for the intensity of freight with respect to GDP. Modelling freight demand based on the intensity of freight with respect to GDP allows for a focus on the importance of road freight with respect to the cost-effective achievement of climate policy targets. These climate policy targets are explored using different GDP pathways between 2005 and 2100, which are sourced from the Shared Socioeconomic Pathways (SSPs) database. Our modelling shows that the decarbonisation of the freight sector tends to occur in the second part of the century and the sector decarbonises by a lower extent than the rest of the economy. Decarbonising road freight on a global scale remains a challenge even when notable progress in biofuels and electric vehicles has been accounted for. |
| Keywords: | Road Freight, Transport, Climate Mitigation, Integrated Assessment Models |
| JEL: | Q54 Q58 R41 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2017.08&r=ene |
| By: | Elmira Aliakbari (Fraser Institute, Vancouver BC, Canada); Ross McKitrick (Department of Economics, University of Guelph, Guelph ON Canada) |
| Abstract: | Two forms of uncertainty in climate policy are the wide range of estimated marginal costs and uncertainty over credibility of rival information sources. We show how a recently-proposed solution to the first problem also addresses the second. The policy is an emissions tax tied to average temperatures, coupled with permits that exempt the emitter from paying the tax in a future year. It has been shown that the resulting tax path will be correlated with future marginal damages. It has been conjectured that the permit prices will yield unbiased forecasts of the climate, which, if true, would address the second uncertainty. We confirm the conjecture by showing a trading mechanism that converges on unbiased forecasts if traders are risk-neutral. Risk aversion slows down but does not prevent convergence. We also show that the forecasts are more likely to be sufficient statistics the stronger the consensus on climate science. |
| Keywords: | Climate change, uncertainty, carbon tax, tradable permits, state-contingent pricing, prediction markets |
| JEL: | Q54 Q58 H23 G13 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:gue:guelph:2017-02&r=ene |
| By: | Ma, Yiqun (Groningen University) |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:gro:rugsom:16019-eef&r=ene |
| By: | Tara Caetano; Bruno Merven |
| Abstract: | Developed as well as developing countries will have to increase their ambition relative to their stated Nationally Determined Contributions to limit global temperature increases to 2°C above pre-industrial levels. South Africa’s Nationally Determined Contribution, in line with national policy, is to follow a peak, plateau, and decline emissions trajectory to 2050, with the contribution post-2030 contingent on a fair contribution from other countries. Given the high levels of unemployment, poverty, and inequality in South Africa, there are concerns that a rapid transition to a low-carbon energy system would have severe socioeconomic consequences. This paper builds on initial work from the Deep Decarbonisation Pathways Project, and analyses the impacts on the energy system and the economy of an increase in ambition, in order to shed light on these concerns. The key policy recommendation from this analysis is that further investments in fossil fuel infrastructure in South Africa will have significant negative socioeconomic implications, and that further work should be done to reassess development pathways that could mitigate these negative impacts. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2017-39&r=ene |
| By: | Spyros Arvanitis (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Michael Peneder (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Christian Rammer (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Tobias Stucki (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Martin Wörter (KOF Swiss Economic Institute, ETH Zurich, Switzerland) |
| Abstract: | For a large sample of enterprises in Germany, Austria and Switzerland (the “DACH“ region) we study the impact of various policy instruments, such as energy related taxes, subsidies, regulations and standards or negotiated agreements on the firm’s ecological and economic performance. To identify the causal linkages, we build a system of twelve equations, tracking first the impacts of policy on the adoption of green energy technologies for distinct areas. In a second set of equations, we estimate the perceived impacts of adoption on the firm’s (i) energy efficiency, (ii) carbon emissions and (iii) competitiveness. The results confirm a differentiated pattern of channels for policy to affect the firm’s energy efficiency and carbon emissions, while having a neutral impact on its competitiveness. |
| Keywords: | Environmental policy, Energy policy, Technology adoption, Innovation, Porter hypothesis |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:kof:wpskof:16-420&r=ene |
| By: | Spyros Arvanitis (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Michael Peneder (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Christian Rammer (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Tobias Stucki (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Martin Wörter (KOF Swiss Economic Institute, ETH Zurich, Switzerland) |
| Abstract: | Based on representative firm-level survey data for the three countries Austria, Germany, and Switzerland, we investigate the effects of regulation, energy taxes, voluntary agreements, and subsidies, on the creation of green product innovations. Our data set allows us to distinguish between the supply-side effects (cost effects) and the demand-side effects of policy measures, which improves our understanding of the frequently observed positive net effect of policies. Controlling for the demand effect, taxes and regulations are negatively related with product innovations. Hence, if taxes and regulation do not trigger additional demand, they decrease the propensity to innovate. These effects are ameliorated for technologically very advanced firms and for firms with a high level of financial awareness. Subsidies and (partly) voluntary agreements are positively related with product innovations. |
| Keywords: | Innovation, Policy, Demand |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:kof:wpskof:16-417&r=ene |
| By: | Michel Berthélemy; Petyo Bonev; Damien Dussaux; Magnus Söderberg |
| Abstract: | When evaluating policy treatments that are persistent and endogenous, available instrumental variables often exhibit more variation over time than the treatment variable. This leads to a weak instrumental variable problem, resulting in uninformative confidence intervals. The authors of this paper propose two new estimation approaches that strengthen the instrument. They derive their theoretical properties and show in Monte Carlo simulations that they outperform standard IV-estimators. The authors use these procedures to estimate the effect of public utility divestiture in the US nuclear energy sector. Their results show that divestiture significantly increases production efficiency. |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp265&r=ene |
| By: | Simora, Michael; Frondel, Manuel; Sommer, Stephan |
| Abstract: | The perception of risks accruing from climate change is a key factor for individual adaptation and prevention behavior, as well as for the willingness to support climate policy measures. Using a generalized ordered logit approach and drawing on a large data set originating from two surveys among more than 6,000 German households, respectively, we analyze the determinants of the perception of the personal risk that is due to heat waves, storms, and floods. We focus on the role of (damage) experience and objective risk measures for these natural hazards, whose frequency is likely to be affected by climate change. In line with the received literature, our results suggest that the personal experience with adverse events, most notably experienced personal damage, is a strong determinant of individual risk perception. |
| JEL: | D81 H31 Q54 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145742&r=ene |
| By: | Kathryn Tomlinson |
| Abstract: | This paper provides an overview of social and environmental management practices in the oil and gas industry. It outlines the evolution of international oil companies’ approaches over the last 20 years, reviews what social and environmental management amongst such companies means in practice, and highlights some of the unresolved issues emerging today. While most companies now model their approach to social and environmental management on international norms, they face a variety of drivers of their practices. These range from complying with international standards in order to gain access to finance, to complying with new host country legislation and regulation, and gaining and maintaining a good reputation and a ‘social licence to operate’. This paper argues that the complexity of these drivers problematizes the portrayal of the industry’s social and environmental management as ‘voluntary’ corporate social responsibility, and somewhat renders the latter term misleading. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2017-22&r=ene |
| By: | Robert C. Pietzcker (Potsdam Institute for Climate Impact Research); Falko Ueckerdt (Potsdam Institute for Climate Impact Research); Samuel Carrara (Fondazione Eni Enrico Mattei and Centro Euro-Mediterraneo sui Cambiamenti Climatici); Harmen Sytze de Boer (PBL Netherlands Environmental Assessment Agency); Jacques Després (Université Grenoble Alpes); Shinichiro Fujimori (National Institute for Environmental Studies); Nils Johnson (International Institute for Applied Systems Analysis); Alban Kitous (European Commission Joint Research Centre); Yvonne Scholz (German Aerospace Center); Patrick Sullivan (National Renewable Energy Laboratory); Gunnar Luderer (Potsdam Institute for Climate Impact Research) |
| Abstract: | Mitigation-Process Integrated Assessment Models (MP-IAMs) are used to analyze long-term transformation pathways of the energy system required to achieve stringent climate change mitigation targets. Due to their substantial temporal and spatial aggregation, IAMs cannot explicitly represent all detailed challenges of integrating the variable renewable energies (VRE) wind and solar in power systems, but rather rely on parameterized modeling approaches. In the ADVANCE project, six international modeling teams have developed new approaches to improve the representation of power sector dynamics and VRE integration in IAMs. In this study, we qualitatively and quantitatively evaluate the last years’ modeling progress and study the impact of VRE integration modeling on VRE deployment in IAM scenarios. For a comprehensive and transparent qualitative evaluation, we first develop a framework of 18 features of power sector dynamics and VRE integration. We then apply this framework to the newly-developed modeling approaches to derive a detailed map of strengths and limitations of the different approaches. For the quantitative evaluation, we compare the IAMs to the detailed hourly-resolution power sector model REMIX. We find that the new modeling approaches manage to represent a large number of features of the power sector, and the numerical results are in reasonable agreement with those derived from the detailed power sector model. Updating the power sector representation and the cost and resources of wind and solar substantially increased wind and solar shares across models: Under a carbon price of 30$/tCO2 in 2020 (increasing by 5% per year), the model-average cost-minimizing VRE share over the period 2050-2100 is 62% of electricity generation, 24%-points higher than with the old model version. |
| Keywords: | Integrated Assessment Models (IAM), Variable Renewable Energy (VRE), Wind and Solar Power, System Integration, Power Sector Model, Flexibility Options (Storage, Transmission Grid, Demand Response), Model Evaluation, Model Validation |
| JEL: | C6 C61 Q40 Q42 Q47 Q49 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2017.07&r=ene |
| By: | Frederick van der Ploeg (University of Oxford) |
| Abstract: | Rapacious fossil fuel extraction occurs if fossil fuel producers fear that there is a probability that their under-the-ground assets becomes worth less. They show that rapacious depletion of oil reserves occurs if there is a probability of a breakthrough renewable energy coming to the market or a probability of climate policy finally becoming seriously ambitious. These are examples of one-way regime switches leading to the so-called Green Paradox. Two-way regimes switches also lead to rapacious oil depletion. They occur if there is a chance of being removed from office in a partisan political context with perennial election cycles or if there are dynamic resource wars with the hazard of being removed from office dependent on fighting efforts. This rapacity effect is stronger in societies with bad institutions and lack of political cohesiveness. |
| Keywords: | D81, H20, Q31, Q38 |
| Date: | 2017–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:csl:devewp:415&r=ene |
| By: | Carriazo, Fernando; Gomez, John Alexander |
| Abstract: | Using a (second stage) hedonic housing model, this paper identifies an inverse demand function for air quality in Bogota, the fourth most polluted city in Latin America (annual average of PM10 52 mg/m3). We use precipitation and distance to monitoring stations as instruments for pollution. We found that the monthly benefits of compliance with the U.S Environmental Pollution Agency standard (50 mg/m3 – annual average), and the far more stringent World Health Organization standard (20 mg/m3 – annual average) are U$7.12 and U$72.91per household respectively. Accordingly, these values represent about 1% and 8% of the average household income. |
| Keywords: | air pollution, hedonic models, housing markets, Environmental Economics and Policy, Q51 Q53 R31, |
| Date: | 2015–11–17 |
| URL: | http://d.repec.org/n?u=RePEc:ags:ulaedd:212855&r=ene |
| By: | Stephen Younger (Department of Economics, Ithaca College, Ithaca, NY.) |
| Abstract: | The paper explains methods developed by the Commitment to Equity Institute to simulate policy changes and uses them to assess the distributional consequences of three types of policy reform in Ghana and Tanzania: removal of energy subsidies, expansion of conditional cash transfer programs, and shifts in the balance between indirect and direct taxation. The methods are simple to implement and provide a first-order approximation to the true distributional effects. In both countries energy subsidies are substantial and popular but regressive despite the use of lifeline tariffs for electricity consumption. Their removal would reduce inequality but also increase poverty by a non-trivial amount because the poor do garner some benefit from the subsidies. A simultaneous expansion of cash transfer programs could offset the poverty consequences at significantly lower fiscal cost than that of the energy subsidies. In both countries direct taxes are more progressive than indirect taxes, yet shifting taxation from indirect to direct taxes has relatively little effect on inequality and poverty because the incidence of the two is not so different as, for instance, the difference between taxes and a strongly progressive expenditure like conditional cash transfers. |
| Keywords: | fiscal incidence, poverty, inequality, subsidy reform, Ghana, Tanzania |
| JEL: | D31 H22 I14 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:tul:ceqwps:55&r=ene |