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on Energy Economics |
| By: | Matteo Deleidi (Department of Economics, University Roma Tre); Mariana Mazzucato (UCL Institute of Innovation and Public Purpose); Gregor Semieniuk (Department of Economics, SOAS University of London) |
| Abstract: | Rapid structural change towards a low-carbon energy supply requires significant additional investments into innovative but high-risk low-carbon technologies. Mobilising greater private investments requires applying the right policy instruments, but while fiscal measures and regulation have been well researched, systematic quantitative evidence about the effect of public direct investment is lacking. Absent empirical evidence, contradictory theoretical arguments claim that such public (co-)investments either ‘crowd out’ or ‘crowd in’ private investors. In this paper we show that the macroeconomic concept of crowding out/in is inapplicable to sectoral studies such as of renewable electricity. Instead, both neoclassical microeconomics and evolutionary economics suggest public direct investment to have a positive effect due to either externalities or market creation effects. We also provide the first quantitative estimate of the effect of public direct investment on private investment into renewable electricity technologies for 17 countries in the period 2004-2014. Using feasible generalised least squares (FGLS) and static and dynamic generalised method of moments (GMM) estimators, we find that public investments not only have a positive but also consistently the largest effect on private investment flows relative to feed-in tariffs, taxes and renewable portfolio standards in general, and for wind and solar technologies separately. Implications for policy aimed at accelerating the low-carbon transition are discussed. |
| Keywords: | public direct investment, crowding out, crowding in, renewable electricity technology, innovation financing, externality, entrepreneurial state, market creation, climate change mitigation policy |
| JEL: | G3 H23 H54 O3 Q42 Q48 Q55 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:soa:wpaper:226&r=all |
| By: | Goekce Akin-Olçum (Environmental Defense Fund, Boston, USA); Christoph Boehrinngerr (University of Oldenburg, Department of Economics); Thomas Rutherford (University of Wisconsin, Madison, USA); Andrew Schreiber (National Center for Environmental Economics, Washington, USA) |
| Abstract: | New York is considering additional emission regulation on top of its obligations under the Regional Greenhouse Gas Initiative (RGGI) to achieve its State Energy Plan targets. The proposed measure is a so-called “carbon adder” on CO2 emissions from the power sector which is set as the difference between the targeted social cost of carbon and the prevailing RGGI price for CO2 emission allowances. We investigate the potential economic and environmental impacts from the imposition of a carbon adder on New York’s power sector. While our analysis indicates the risk of excess cost through overlapping regulations, we find that the carbon adder gives the “right” price signal for New York’s power generation to turn into a greener one. Market requirements for permit price floors in the RGGI market induces carbon permit retirements across RGGI states leading to small reductions in region- and country-wide emissions levels. |
| Keywords: | Environmental regulation, overlapping regulation, emission taxes, emissions trading |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:old:dpaper:424&r=all |
| By: | D. Baiardi |
| Abstract: | Yes, they matter. To reply to this question, we assess the impact of energy efficiency and renewable energy policies on six different air pollutants: carbon dioxide (CO2), methane (CH4), nitrous oxides (N2O), non-methane volatile organic compounds (NMVOCs), nitrogen oxides (NOx) and sulphur dioxide (SO2) in the case of the Italian provinces in the decade 2005-2015. The empirical analysis is performed in a panel data context by means of propensity score matching with multiple treatment, since our framework is characterized by the presence of two treatments, corresponding to the two different energy policies analyzed, i.e. energy efficiency policy and renewable policy. These two policies can be applied by each province as mutually exclusive strategies or as joint strategies. Our results show that renewable policies are the most efficient in terms of climate goals especially when planned on a local scale, while energy efficiency policies alone are ineffective. Moreover, the success of these policies depends on the type of pollutant to be reduced. Finally, we note that the effect of these two policies was reinforced by the counter-cyclical fiscal policies implemented to contrast the Global Financial Crisis in 2008. |
| Keywords: | Textile exports, Outperformance, Displacement, Competitiveness, Cross-country comparisons, Panel data analysis |
| JEL: | C23 F14 L67 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:par:dipeco:2019-ep03&r=all |
| By: | Sarah Parlane; L. (Lisa B.) Ryan |
| Abstract: | Companies are increasingly choosing to procure their power from renewable energy sources, with their own set of potential challenges. In this paper we focus on contracts to procure electricity from renewable sources that are inherently unreliable (such as wind and solar). We determine the contracts that minimize the cost of procuring a given amount of renewable energy from two risk-averse generators. We contrast outcomes arising when investments are set in centralised and decentralised settings, with the absence of reliability addressed by either issuing orders in excess of what is needed or by investing in improved reliability. Our results suggest that future contracts may be geared towards a greater reliance on order inflation and lower investments in reliability as the cost of renewable energy keeps falling. The implications of these results for grid congestion and electricity spot market prices should be of interest to regulators and transmission system operators. |
| Keywords: | Renewable electricity contracts; Power purchase agreements; Newsvendor model; Risk aversion; Order inflation; Moral hazard |
| JEL: | D81 D86 L14 L24 L94 Q21 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:201920&r=all |
| By: | Kyle Meng (University of California, Santa Barbara and NBER) |
| Abstract: | How can an economy transition from dirty to clean inputs? When transitional dynamics exhibit strong path dependence, a temporary shock to input composition can trigger permanent structural change. This paper examines whether such dynamics characterize the U.S. energy sector’s use of coal - the most climate-damaging energy input - over the 20th century. Exploiting local coal transport distance shocks driven by the changing regional accessibility of subsurface coal resources, I find increasing imbalance in the coal composition of electricity capital lasting ten decades following a shock. Additional tests detect increasing returns to scale as the underlying mechanism. To inform energy transitions more broadly, I develop a model of scale-driven structural change to map reduced-form estimates onto a key parameter found across a class of structural change models. Calibrated model simulations further characterize conditions under which a temporary climate policy can trigger a permanent future transition towards clean energy. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed019:1539&r=all |
| By: | Parantap Basu (Durham University Business School); Tooraj Jamasb (Durham University Business School) |
| Abstract: | We develop an endogenous growth model to address a long standing question whether sustainable green growth is feasible by re-allocating resource use between green (natural) and man-made (carbon intensive) capital. In our model, Önal output is produced with two reproducible inputs, green and man-made capital. The growth of the man-made capital causes depreciation of green capital via carbon emissions which the private sector does not internalize. A benevolent government uses carbon taxes to encourage Örms to substitute carbon intensive man-made capital with green capital that the production technology allows. Doing so, the damage to natural capital by emissions can be reversed through a lower, but socially optimal long run growth. This trade-o§ between environmental policy and long-run growth can be overcome by a combination of an investment in pollution abatement and higher total factor productivity |
| Keywords: | Green growth, sustainability, carbon tax, clean growth, resource substitution |
| JEL: | E1 O3 O4 Q2 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:dur:durham:2019_06&r=all |
| By: | Marius Buchmann; Julia Kusznir; Gert Brunekreeft |
| Abstract: | Germany is struggling to meet its 2020 greenhouse gas (GHG) emission and climate goals. Against this background, we analyze the current draft National Energy and Climate Plan (NECP) that sets out how Germany aims to achieve its national and European climate goals by 2030. We introduce the current stage of the country’s climate policy and, by looking at the different emission reduction measures under discussion, examine why Germany will probably miss its CO2 emissions reduction goals. We conclude that, based on the climate package announced in September 2019, Germany will get closer to the achievement of its 2030 targets than was anticipated in the NECP draft; nevertheless, the new climate package leaves a significant gap between the new measures and the 2030 climate goals. |
| Keywords: | German climate policy, energy and climate goals, emission reduction measures |
| JEL: | L38 L98 Q28 Q48 Q58 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:bei:00bewp:0030&r=all |
| By: | Lorraine Conway (Infrastructure Victoria); David Prentice (Infrastructure Victoria) |
| Abstract: | In this paper we review studies to understand how much households change their electricity consumption when there is a price change. We are particularly focussed on finding results from econometric studies that estimate elasticities of demand. Many studies find residential households demonstrate responsiveness to price, with long term and short run elasticities behaving as economic theory would suggest. For instance, the elasticities are negative which means that as price increases, consumption decreases; long run elasticities are larger than shorter run elasticities which indicates that households can respond over time through investment in more energy efficient appliances; and very short run elasticities exist - while very short run elasticities are small, household responsiveness seems to increase when paired with technology. Long run elasticities range from -0.75 to -0.3 and short run elasticities range from -0.47 to -0.026. The major gaps in research from the empirical economics literature are how low income and vulnerable Australian households could be affected by price changes and how Australians respond to within-day variation in prices. |
| Keywords: | Electricity, Prices, Elasticity, Cost reflective pricing, Australia |
| JEL: | D12 L94 Q41 Q48 |
| Date: | 2019–09–26 |
| URL: | http://d.repec.org/n?u=RePEc:inv:tpaper:201901&r=all |
| By: | Antonio M. Bento; Mark R. Jacobsen; Christopher R. Knittel; Arthur A. van Benthem |
| Abstract: | Fuel-economy standards for new vehicles are a primary policy instrument in many countries to reduce the carbon footprint of the transportation sector. These standards have many channels of costs and benefit, impacting sales, composition, vehicle attributes, miles traveled and externalities in the new-car fleet, as well as the composition and size of the used fleet. We develop a tractable analytical framework to examine the welfare effects of fuel-economy standards, and apply it to the recent government proposal to roll back fuel-economy standards. We find that our combined, multi-market vehicle choice model implies that the proposal would increase the size of the vehicle fleet over time, and also generates smaller welfare gains than models with a less rich structure of the vehicle market, such as the one used in the analysis associated with the 2018 Notice of Proposed Rulemaking (NPRM) announcement. The disparities across the two models appear to result from the absence of feedback effects in the NPRM analysis. We stress the importance of instead using a multi-market vehicle choice model to provide the most accurate predictions of costs and benefits. We also derive bounds that can serve as a check on the theoretical consistency of such analyses, and that offer insights into the magnitudes of potential errors resulting from imperfect multi-market integration. |
| JEL: | H23 L51 Q38 Q48 Q58 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26309&r=all |
| By: | Liu, Yan; Chen, Xi; Yan, Zhijun |
| Abstract: | While adverse health effects of ambient air pollution have been well documented, there is scarce evidence on the impact of household air pollution (HAP) on mental health. We investigated the causal link between HAP exposure from the use of solid fuel on depressive symptoms using a nationally representative dataset of middle-aged and older population in China. Employing the propensity match score method (PSM), matching and adjusting for potential confounders, we found significantly higher Center for Epidemiological Studies Depression Scale (CES-D) score and risk of depressive symptoms among solid fuel users than clean fuel users. These associations were especially stronger for older females who were less educated, of lower income, of higher body mass index, or had chronic diseases. |
| Keywords: | Depression,Household solid fuel use,Household air pollution,Propensity Score Matching,CHARLS |
| JEL: | I31 Q51 Q53 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:407&r=all |
| By: | Kenju Kamei (Durham University Business School); Louis Putterman (Brown University); Jean-Robert Tyran (University of Vienna) |
| Abstract: | TWe develop an endogenous growth model to address a long standing question whether sustainable green growth is feasible by re-allocating resource use between green (natural) and man-made (carbon intensive) capital. In our model, Önal output is produced with two reproducible inputs, green and man-made capital. The growth of the man-made capital causes depreciation of green capital via carbon emissions which the private sector does not internalize. A benevolent government uses carbon taxes to encourage Örms to substitute carbon intensive man-made capital with green capital that the production technology allows. Doing so, the damage to natural capital by emissions can be reversed through a lower, but socially optimal long run growth. This trade-o§ between environmental policy and long-run growth can be overcome by a combination of an investment in pollution abatement and higher total factor productivity. |
| Keywords: | civic engagement; public goods provision; punishment; experiment; cooperation |
| JEL: | C92 D02 D72 H41 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:dur:durham:2019_05&r=all |
| By: | Jan Fagerberg (Centre for Technology, Innovation and Culture, University of Oslo & UNU-MERIT) |
| Abstract: | Research has shown that transitions easily may take several decades if not more to unfold. However, it has also been suggested that change may occur faster when advantages for end-users are sufficiently large and/or there are proactive policies in place. This paper aims at providing new insights on these matters through a discussion of three specific cases, all from Europe, in which change has been very quick indeed: Wind energy in Denmark, the German Energiewende and electrical cars in Norway. The focus is particularly on the actors that took part, how policy schemes supporting these developments were shaped and what their impacts were. It is concluded that by embracing the opportunities offered by the renewable energy revolution and actively involving users (and attracting new ones) it is possible for policy-makers to encourage (green) innovation, create new jobs and significantly speed up the transition. |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:tik:inowpp:20190923&r=all |
| By: | Mary Karumba; Edwin Muchapondwa |
| Abstract: | Developing countries particularly those within the Sub-Saharan African region like Kenya account for almost half of the 1.2 Billion people in the world without access to electricity. These countries have a greater challenge of dealing with outcomes related to the lack of modern energy by rural households, who comprise a bigger proportion of their population. Part of the explanation is the energy policy preoccupation with centralized grid electrification whose economics does not favour scattered and low income households in the vast rural areas. Subsequently, even with heavy rural electrification campaigns, new patters of large section of the population that does not take up connection and limitation of electricity to very basic uses by household’s calls for alternative considerations in energy policy. |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:718&r=all |
| By: | Zhou, W.; O’Neill, E.; Moncaster, A.; Reiner, D.; Guthrie, P. |
| Abstract: | Building stock is a key determinant in building energy and China is the largest producer of CO2 emissions and the largest consumer of energy and building energy, so any effective energy and climate policy will need to address this key driver of energy use. However, official statistics on total floor area of urban residential stock in China only exist up to 2006. Previous studies estimating Chinese urban residential stock size and energy use made various questionable methodological assumptions and only produced deterministic results. We present a Bayesian approach to characterise the stock turnover dynamics and estimate stock size uncertainties. Firstly, a probabilistic dynamic building stock turnover model is developed to describe the building aging and demolition process governed by a hazard function specified by a parametric survival model. Secondly, using five candidate parametric survival models, the building stock turnover model is simulated through Markov Chain Monte Carlo (MCMC) to obtain posterior distributions of model-specific parameters, estimate marginal likelihood, and make predictions on stock size. Finally, Bayesian Model Averaging (BMA) is applied to create a model ensemble that combines the model-specific posterior predictive distributions of the stock evolution pathway in proportion to posterior model probabilities. This Bayesian modelling framework and its results in the form of probability distributions of annual total stock and age-specific substocks, can provide a solid basis for further modelling and analysis of policy trade-offs across embodied-versus-operational energy consumption and carbon emissions of buildings in the context of sector-wide transitions aimed at decarbonising buildings. |
| Keywords: | building stock, lifetime distribution, Bayesian Model Averaging, Markov Chain Monte Carlo, embodied energy, operational energy, China |
| JEL: | C11 C61 O18 R21 |
| Date: | 2019–10–02 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1986&r=all |
| By: | Mriduchhanda Chattopadhyay (Graduate School of Economics, Waseda University, 1-6-1 Nishiwaseda, Shinjuku-ku, Tokyo 169-8050, Japan.); Toshi H. Arimura (Faculty of Political Science and Economics & Research Institute for Environmental Economics and Management (RIEEM), Waseda University, 1-6-1 Nishiwaseda, Shinjuku-ku, Tokyo, 169-8050, Japan.); Hajime Katayama (Faculty of Commerce & Research Institute for Environmental Economics and Management (RIEEM), Waseda University, 1-6-1 Nishiwaseda, Shinjuku-ku, Tokyo, 169-8050, Japan.); Mari Sakudo (Faculty of Engineering, Information and Systems, University of Tsukuba, Tennodai 1-1-1, Tsukuba, Ibaraki 305-8573, Japan & Management (RIEEM), Waseda University, 1-6-1 Nishiwaseda, Shinjuku-ku, Tokyo, 169-8050, Japan.); Hide-Fumi Yokoo (Graduate School of Economics, Hitotsubashi University, Naka 2-1, Kunitachi, Tokyo 186-8601, Japan & Management (RIEEM), Waseda University, 1-6-1 Nishiwaseda, Shinjuku-ku, Tokyo, 169-8050, Japan.) |
| Abstract: | An increasing number of empirical studies have investigated the determinants of cooking fuel choice in developing countries, where health risk from indoor air pollution is one of the most important issues. We contribute to this stream of literature by examining individuals f subjective probabilistic expectations about health risks when using different types of fuel and their influence on cooking fuel usage patterns. We also explore how these patterns, in turn, affect health status. Using data collected from 557 rural Indian households, we find that subjective probabilistic expectations of becoming sick from dirty fuel usage have a negative influence on the fraction of days with dirty fuel usage in the household. The results also show that dirty fuel usage degrades the health of the individual. We then examine the effectiveness of information provision regarding the health risks of dirty/clean fuel usage. Our simulation demonstrates that although the provision of information results in statistically significant changes in the households f cooking fuel usage patterns and in the individuals f health status, the changes may be small in size. |
| Keywords: | subjective probabilistic expectations, indoor air pollution, cooking fuel usage pattern, health, developing country |
| JEL: | I10 Q40 C83 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:was:dpaper:1910&r=all |
| By: | Gunther Maier |
| Abstract: | The basic question of this paper is the following: 'Do energy efficient appartments generate higher rents for their owners than comparable appartments with lower levels of energy efficiency?' This is an important question for environmental policy because if it is ansered positively, it generates an economic incentive for landlords to invest into the energy efficiency of buildings. We use data from the EU-SILC survey for Austria and a hedonic price approach to determine the marginal rent of more energy efficiency (measured in the form of lower heating costs). In this paper we revisit a topic that we have already discussed in a presentation eight years ago. At that time the results were very disappointing. The analysis produced a significant coefficient but with the reverse than expected sign. In the meantime, more waves of the EU-SILC survey have become available and the pool of respondents has been turned over. This allows us to revisit this question and to produce an answer with more empirical support. |
| Keywords: | Energy Efficiency; hedonic price; housing |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_111&r=all |
| By: | Yash Chawla; Anna Kowalska-Pyzalska; Anna Skowronska-Szmer |
| Abstract: | This papers focuses on the smart meters' roll-out in India - third largest economy, one of the developing countries with the fastest economic growth rate and third largest power producing nation. The Indian power system is weak and experiences severe problems and challenges that could be solved by means of the smart grid approach and broader implementation of smart meters (SM). Within this study, we focus on the consumers' preferences regarding SM. An empirical study has been conducted among Indian social media users, who are predicted to be potential early adopters or innovators in case of SM further market penetration. By dividing the respondents into a few market segments, the study highlights differences between consumers already having SM installed at their household, consumers in the process of installing SM, consumers who would like to have SM in the future, and consumers' preferences based on potential benefits and information availability. The study also outlines the profile of consumers who currently have SM installed in their household. Results show that tech-savviness of India's consumers, common access to the Internet for citizens, possession of smart phones by most of the population and ambitious goals of the Indian government, are a very productive mix for a nation wide roll-out of SM in India in the coming years. |
| Keywords: | Smart metering; Smart metering platforms; Consumer awareness; Stepwise discriminant analysis; On-line questionnaire; Social media |
| JEL: | D12 D90 D91 Q01 Q55 |
| Date: | 2019–09–11 |
| URL: | http://d.repec.org/n?u=RePEc:wuu:wpaper:hsc1903&r=all |
| By: | Riza Demirer (Department of Economics and Finance, Southern Illinois University Edwardsville, Edwardsville, IL 62026-1102, USA); Konstantinos Gkillas (Department of Business Administration, University of Patras – University Campus, Rio, P.O. Box 1391, 26500 Patras, Greece); Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, 0002, South Africa); Christian Pierdzioch (Department of Economics, Helmut Schmidt University, Holstenhofweg 85, P.O.B. 700822, 22008 Hamburg, Germany) |
| Abstract: | We analyze the predictive power of time-varying risk aversion for the realized volatility of crude oil returns based on high-frequency data. While the popular linear heterogeneous autoregressive realized volatility (HAR-RV) model fails to recognize the predictive power of risk aversion over crude oil volatility, we find that risk aversion indeed improves forecast accuracy at all forecast horizons when we compute forecasts by means of random forests. The predictive power of risk aversion is robust to various covariates including realized skewness and realized kurtosis, various measures of jump intensity and leverage. The findings highlight the importance of accounting for nonlinearity in the data-generating process for forecast accuracy as well as the predictive power of non-cashflow factors over commodity-market uncertainty with significant implications for the pricing and forecasting in these markets. |
| Keywords: | Oil price, Realized volatility, Risk aversion, Random forests |
| JEL: | G17 Q02 Q47 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:201972&r=all |
| By: | Shaheen, Susan PhD; Martin, Elliot |
| Keywords: | Social and Behavioral Sciences |
| Date: | 2019–10–03 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsrrp:qt95j7g71k&r=all |
| By: | Michael Alexeev (Indiana University, Bloomington, Indiana and the Russian Academy of National Economy and Public Administration (RANEPA), Moscow, Russia); Andrey Chernyavskiy (National Research University Higher School of Economics, (HSE) University of Moscow, Russia) |
| Abstract: | We use the 2005-2012 data for Russian regions to show that higher regional institutional quality strongly benefits institutionally-dependent manufacturing sectors in terms of both gross output levels and growth rates. Unlike the existing literature on this topic, which uses cross-sectional or pooled specifications, we focus on panel data analysis. This approach mitigates endogeneity concerns and allows for calculating full marginal effects of institutions on manufacturing sectors with different degrees of institutional dependence. Our results imply that significant institutional improvements are needed in order for the Russian economy to diversify away from heavy reliance on oil and natural gas. |
| Keywords: | relationship specificity, institutional quality, allocation of industry, Russian economy |
| JEL: | D02 O14 P27 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:inu:caeprp:2019004&r=all |
| By: | Marten Ovaere |
| Abstract: | This paper studies the effect of linear cost-efficiency and quality regulation of a public utility on its cost-reducing effort and its provided quality level. The analysis shows that a quality incentive increases both quality and effort, while a cost-efficiency incentive increases effort and decreases quality. Next, introducing uncertainty and asymmetric information, I show that the power of the cost-efficiency and quality incentive should optimally be equal and below one. The incentive powers decrease with increasing uncertainty and increasing dislike for public utility profit. Last, we analyze case studies in electricity, gas and water. As in most cases the power of the quality incentive is higher than the power of the cost-efficiency incentive, the model predicts that supplied quality is too high. |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:ete:ceswps:606626&r=all |
| By: | Lana Friesen (School of Economics, The University of Queensland); Lata Gangadharan (Department of Economics, Monash University, Australia); Peyman Khezr (School of Economics, The University of Queensland); Ian A. MacKenzie (School of Economics, The University of Queensland) |
| Abstract: | This article investigates supply reserves in pollution permit auctions. A supply reserve is a fixed quantity of permits that is automatically released if the initial clearing price is sufficiently high. The main rationale for using such a reserve is for cost containment: to lower the final clearing price. We show the inclusion of a reserve does exactly the opposite and provide corroborating experimental evidence. Relative to a benchmark without a supply reserve, we find that the introduction of a supply reserve will actually increase the clearing price, increase the revenue from the auction, and increase auction efficiency. The clearing price also increases in the level of the trigger price and relative size of the reserve. This has important implications for supply reserves currently in use, such as the Cost Containment Reserve (CCR) within the US Regional Greenhouse Gas Initiative (RGGI) |
| Keywords: | multi-unit auction; uniform-price; supply reserve, pollution permits, experiment. |
| JEL: | C91 C92 Q58 |
| Date: | 2019–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uq2004:610&r=all |
| By: | NIDHALEDDINE BEN CHEIKH; SAMI BEN NACEUR; OUSSAMA KANAAN; Christophe RAULT |
| Keywords: | , GCC stock markets, oil prices, smooth transition regression models |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:leo:wpaper:2697&r=all |
| By: | Künn, Steffen (Maastricht University); Palacios, Juan (Maastricht University); Pestel, Nico (IZA) |
| Abstract: | This paper studies the causal impact of indoor air quality on the cognitive performance of individuals using data from official chess tournaments. We use a chess engine to evaluate the quality of moves made by individual players and merge this information with measures of air quality inside the tournament venue. The results show that poor indoor air quality hampers cognitive performance significantly. We find that an increase in the indoor concentration of fine particulate matter (PM2.5) by 10 μg/m3 increases a player's probability of making an erroneous move by 26.3%. The impact increases in both magnitude and statistical significance with rising time pressure. The effect of the indoor concentration of carbon dioxide (CO2) is smaller and only matters during phases of the game when decisions are taken under high time stress. Exploiting temporal as well as spatial variation in outdoor pollution, we provide evidence suggesting a short-term and transitory effect of fine particulate matter on cognition. |
| Keywords: | indoor air quality, cognition, worker productivity, chess |
| JEL: | D91 I1 J24 Q50 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12632&r=all |
| By: | Marco Piccirilli; Maren Diane Schmeck; Tiziano Vargiolu |
| Abstract: | In this paper we introduce an additive two-factor model for electricity futures prices based on Normal Inverse Gaussian L\'evy processes, that fulfills a no-overlapping-arbitrage (NOA) condition. We compute European option prices by Fourier transform methods, introduce a specific calibration procedure that takes into account no-arbitrage constraints and fit the model to power option settlement prices of the European Energy Exchange (EEX). We show that our model is able to reproduce the different levels and shapes of the implied volatility (IV) profiles displayed by options with a variety of delivery periods. |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1910.01044&r=all |
| By: | Mitsutsugu Hamamoto (Faculty of Economics, Dokkyo University, 1-1 Gakuen-cho, Soka-shi, Saitama, 340-0042, Japan.) |
| Abstract: | This paper investigates the impacts of the Target-Setting Emissions Trading (TSET) Program launched by Saitama Prefecture in Japan in 2011 on the adoption of low-carbon technology. Using facility-level data on the manufacturing sector, the causal relationship between implementation of the program and investment in high-efficiency equipment is estimated. The results show that the TSET Program promoted the adoption of high-efficiency machines and devices for the first three years of the second compliance period, whereas the program did not spur investments in high-efficiency equipment during the first compliance period. These results suggest that the manufacturing facilities may have adopted relatively cheaper emissions reduction plans in the first compliance period such as improvements to equipment they already owned, whereas in the second compliance period, when the emissions targets became stricter, they allocated money and resources to introduce high-efficiency equipment. These findings indicate that the TSET Program succeeded in encouraging emissions reduction efforts by facilities in the manufacturing sector covered by the scheme, even though the program lacks penalties for noncompliance. |
| Keywords: | Emissions trading, Low-carbon technology, Technology diffusion |
| JEL: | Q54 Q55 Q58 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:was:dpaper:1909&r=all |
| By: | Jean Bonnet (Normandie Univ, UNICAEN, CNRS, CREM, F-14000 Caen, France); Eva Coll-Martinez (Normandie Univ, UNICAEN, CNRS, CREM, F-14000 Caen, France); Patricia Renou-Maissant (EconomiX, CNRS, University of Paris Nanterre, France) |
| Abstract: | The paper proposes an evaluation framework for empirically comparing the performance of French departments in terms of sustainable development. The concept of sustainability is apprehended from six dimensions: environment and natural resources, energy transition, sustainable mobility, economic dynamism, social cohesion and solidarity, and governance and citizenship. The focus on French departments allows for a more detailed analysis that promotes a better understanding of local characteristics and initiatives. Considering a wide range of variables, we build aggregate composite indexes for each dimension of sustainable development. We use cartographical support to compare the performances of the departments in each of the six dimensions as well as spatial autocorrelation techniques to account for spatial dependence. Finally, a cluster analysis is used to classify French departments and to explore similarities and dissimilarities with respect to the six components of the sustainable development. The results highlight significant disparities between departments regardless of the dimension considered. Five profiles of sustainable development are distinguished. Finally, the findings make it possible to identify the strengths and weaknesses of the departments in the implementation of sustainable development. |
| Keywords: | Sustainable development, French Departments, composite index, multidimensional data |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:tut:cremwp:2019-06&r=all |
| By: | Olusanya, Olubusoye; Musa, Dasauki |
| Abstract: | ABSTRACT: In this study, we applied the recently proposed income elasticity approach to investigate the presence of an inverted U relationship also known as the environmental Kuznets curve (EKC) in 20 African countries. we grouped the countries into three panels not according to any know regions, but according to income such as Low-income African economies, lower- Middle African economies and upper-Middle income African economies. We tested for the presence of an inverted U relationship for both individual-specific countries and for the 3 panels using short-run and long-run income elasticity approach. We conclude the presence of an inverted-U relationship exists when long-run Income elasticity is smaller than short-run income elasticity, meaning that as income increase over time, carbon emissions have reduced. In other words, as these individual African countries experience economic growth over time, their carbon emissions level has declined. This empirical finding is true only for Benin, Malawi, cote div our, south Africa, Botswana, and Libya, representing approximately 30% of the sample. With regards to the panel groups, we found evidence supporting the presence of an inverted U relationship only in the panel of low-income African countries with long-run income elasticity smaller than the short-run income elasticity, thus, the low-income African countries have reduced their carbon emissions level as economic growth is attained. |
| Keywords: | Keywords: Environmental Kuznets curve, economic growth, Carbon Emissions |
| JEL: | O1 O13 O14 Q4 Q5 Q53 |
| Date: | 2018–02–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:96159&r=all |
| By: | Mause, Karsten |
| Abstract: | This paper draws attention to three challenges for environmental policy that are rather neglected and only rudimentary addressed in the current discourse on the topic of climate protection and environmental protection. Section 2 discusses how "fake news" poses a problem for environmental policy. Section 3 addresses the question of how to deal with the existing "knowing-doing gaps" in some environmental policy contexts. Finally, Section 4 highlights the difficulties of a global and fair environmental policy. These challenges are considered from a politico-economic perspective, more specifically, through the lens of Public Choice Theory/New Political Economy. |
| Keywords: | Climate Protection, Environmental Protection, Environmental Policy, Public Choice Theory, Political Economy. |
| JEL: | D72 H23 O44 P16 Q5 Q54 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:96212&r=all |
| By: | Lucia, Alessi; Elisa, Ossola; Roberto, Panzica |
| Abstract: | This study provides evidence on the existence of a negative Greenium, i.e. a green risk premium, based on European individual stock returns and portfolios. By defining a green factor which is priced by the market, we offer a tool to assess a portfolio exposure to climate risk and hedge against it. We estimate that even in a rather benign scenario, there would be losses at the global level, including for European large banks, should they fail to price the Greenium. By halving the exposure to carbon-intensive sectors, losses would be reduced by 30%. These results call for the introduction of carbon stress tests for systemically important institutions. |
| Keywords: | Climate risk, ESG disclosure, factor models, asset pricing, stress test. |
| JEL: | G01 G11 G12 Q01 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:mib:wpaper:418&r=all |
| By: | Froese, Jens; Jahn, Malte; Wedemeier, Jan; Wuczkowski, Matthäus |
| Abstract: | This action plan at hand will address the questions how ports can increase their efficiency, enhance their role in the industry, and become more sustainable. After presenting low carbon port activities within the DUAL ports project, the paper will derive implications for low carbon emission policies. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:hwwipp:n119&r=all |
| By: | Jakob J. Kolb; Finn M\"uller-Hansen; J\"urgen Kurths; Jobst Heitzig |
| Abstract: | In this paper, we propose a statistical aggregation method for agent-based models with heterogeneous agents that interact both locally on a complex adaptive network and globally on a market. The method combines three approaches from statistical physics: (a) moment closure, (b) pair approximation of adaptive network processes, and (c) thermodynamic limit of the resulting stochastic process. As an example of use, we develop a stochastic agent-based model with heterogeneous households that invest in either a fossil-fuel or renewables-based sector while allocating labor on a competitive market. Using the adaptive voter model, the model describes agents as social learners that interact on a dynamic network. We apply the approximation methods to derive a set of ordinary differential equations that approximate the macro-dynamics of the model. A comparison of the reduced analytical model with numerical simulations shows that the approximation fits well for a wide range of parameters. The proposed method makes it possible to use analytical tools to better understand the dynamical properties of models with heterogeneous agents on adaptive networks. We showcase this with a bifurcation analysis that identifies parameter ranges with multi-stabilities. The method can thus help to explain emergent phenomena from network interactions and make them mathematically traceable. |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1909.13758&r=all |