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on Energy Economics |
| By: | van den Bijgaart, Inge (Department of Economics, School of Business, Economics and Law, Göteborg University); Rodriguez, Mauricio (Dept of Economics, Universidad del Rosario) |
| Abstract: | Despite ambitious climate goals and already substantial stocks of developed fossil en- ergy reserves, development of new fossil energy reserves continues to be high. This raises concerns, as it reinforces the fossil industry’s opportunities and incentives to continue ex- traction, and may necessitate abandonment of developed fossil reserves to meet climate targets. In this paper, we analyze the energy transition, considering fossil exploration and development activities. We provide conditions for when the fossil industry will abandon reserves, and establish that continued exploration of fossil resources is not incompatible with abandoning developed reserves. The first-best implementation of a carbon budget al- ways involves reserve abandonment, and thus exploration that pushes developed reserves in excess of the remaining budget. A quantitative assessment reveals that a volume equal to 9-19% of current oil and gas reserves are optimally abandoned, and that, even under a 1.5◦C warming target, positive exploration of new reserves is justified for another decade. |
| Keywords: | carbon budget; energy transition; fossil exploration; nonrenewable resources; renewable energy; stranded assets |
| JEL: | Q21 Q31 Q35 Q54 Q58 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0789&r=all |
| By: | Manisha Jain (Indira Gandhi Institute of Development Research) |
| Abstract: | India is striving to achieve its climate mitigation goal of reducing the greenhouse gas (GHG) emission intensity of the economy by 33-35 by 2030 from 2005 levels. The energy-related carbon dioxide (CO2) emissions are more than three-fourth of the total GHG emissions in the country. The drivers of energy-related CO2 emissions are often analysed to help countries track their climate change mitigation goals. There is limited evidence on the factors driving changes in India's emissions in the past two decades. In this study, the drivers of change in India's energy-related CO2 emissions during 1990-2017 are examined using index decomposition technique under the Kaya identity framework. The trends in the Kaya factors show decarbonisation of India's economic output during 1990-2017, mainly driven by decoupling between economic growth and energy consumption. The decarbonisation of the energy supply is not found to be significant during the study period. Decomposition analysis of annual changes shows a positive contribution of population and income in the change in emissions during the entire study period. In some of the years of low economic growth, the energy intensity effect contributed to the increase in emissions. The decomposition analysis of aggregate changes shows that net increase in emissions during 1990-2005 is not significant due to offset by energy intensity effect. The emissions increased sharply during 2005-2010 due to a positive contribution of energy intensity effect. The net increase in emissions during 2010-15 and 2015-17 is low again due to the offset by energy intensity effect. |
| Keywords: | Energy-related CO2 emissions, Kaya identity, Index decomposition analysis, Log Mean Divisia Index |
| JEL: | Q40 Q50 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:ind:igiwpp:2020-019&r=all |
| By: | Tancrède Voituriez (Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement, IDDRI - Institut du Développement Durable et des Relations Internationales - Institut d'Études Politiques [IEP] - Paris, WIL - World Inequality Lab) |
| Abstract: | In 2015, the world nations agreed to tackle the "two greatest challenges of our century" to paraphrase Nick Stern (2009) – namely growing inequality and climate change. They signed up the Agenda 2030 and endorsed its 17 sustainable development goals (SDGs), thereby committing to shift development patterns towards sustainable paths. The same year, the Paris Agreement on climate change was celebrated as a breakthrough in environmental governance, marking a watershed between an old world suffocating under fossil-fuel pollution, and a green new world matching the economic aspiration of a growing world middle class within a ‘safe operating space for humanity' (Steffen et al., 2015). The transition from one world to the other is not part of any handbook however, nor was it laid out in companion texts to the SDGs and the Paris Agreement. The recipe for turning coal, oil and gas into carbon-free watts and joules while curbing the seemingly irresistible rise of income and wealth inequalities seems as coveted as were alchemist formulae to turn sand into gold a few centuries ago. The practicality of the transition remains debatable, as global inequality and CO2 emissions seem stubbornly stuck to their long-term rising trend (Wid, 2018 ; Carbon Tracker Institute, 2019). To tackle the magnitude of inequality and environmental intertwined challenges, some scholars framed the concept of green welfare state or "ecostate" almost twenty years ago. They called for a transformation of the welfare state as we know it in most of OECD countries into a governance system supplying the insurance mechanisms and public goods and services to cope with environmental degradation and shocks. This paper is a quest of emerging ecostate in existing literature, and in most recent data. The first section presents a literature review on welfare state and ecostate, and on the expected transition from one to the other. In section two, we update Wood and Gough (2006) typology on welfare regimes to include the most recent available data covering income inequalities and environmental performance. We conduct an empirical multivariate analysis and come up with four distinct type of ecostates: unequal, super unequal, balanced and insecure. We focus in sections four and five on the particular case of insecure ecostates, which gathers a large share of emerging economies. Taking Nigeria as an example, we delineate the characteristics of ecostate insecurity and possible way forward, drawing on ongoing in-house research made in this country. Research gaps and bridging initiatives are hinted at in conclusion. |
| Keywords: | green welfare states,ecostates,developing countries,inequality,environment,insecurity,Nigeria,climate change adaptation |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02876972&r=all |
| By: | David Coady; Ian Parry; Nghia-Piotr Le; Baoping Shang |
| Abstract: | This paper updates estimates of fossil fuel subsidies, defined as fuel consumption times the gap between existing and efficient prices (i.e., prices warranted by supply costs, environmental costs, and revenue considerations), for 191 countries. Globally, subsidies remained large at $4.7 trillion (6.3 percent of global GDP) in 2015 and are projected at $5.2 trillion (6.5 percent of GDP) in 2017. The largest subsidizers in 2015 were China ($1.4 trillion), United States ($649 billion), Russia ($551 billion), European Union ($289 billion), and India ($209 billion). About three quarters of global subsidies are due to domestic factors—energy pricing reform thus remains largely in countries’ own national interest—while coal and petroleum together account for 85 percent of global subsidies. Efficient fossil fuel pricing in 2015 would have lowered global carbon emissions by 28 percent and fossil fuel air pollution deaths by 46 percent, and increased government revenue by 3.8 percent of GDP. |
| Keywords: | Gasoline prices;Consumer subsidies;Sustainable development;Energy prices;Fossil fuels;energy subsidies,efficient taxation,revenue,environment,deadweight loss,post-tax,supply cost,global GDP,efficient price,energy subsidy |
| Date: | 2019–05–02 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2019/089&r=all |
| By: | Ajayi, V.; Dolphin, G.; Anaya, K.; Pollitt, M. |
| Abstract: | What accounts for the recent widespread slowdown in the productivity in advanced economies has remained a puzzle. One plausible explanation has been attributable to regulation, particularly anti-competitive regulations and environmental regulations. This paper focuses on the regulated energy network sectors by undertaking three sets of analysis in examining TFP in a sample of OECD countries over the period 1995-2016. First, using the growth accounting method, we find that there is a substantial productivity puzzle for the electricity and gas sectors, which exhibits a lower TFP growth than the whole economy over the period, and falls postfinancial crisis. Second, we identify the impact of regulation on productivity using a panel regression analysis. Our findings indicate that TFP levels seem weakly explained by changes to the competitive environment of the energy sector. Third, we show that energy and climate policy has negatively and significantly reduced energy sector productivity, at the same time as increasing capital input to the sector. We also find that the strength of energy and climate policy is positively correlated with lower aggregate TFP growth. |
| Keywords: | Total factor productivity, growth accounting, regulation, energy networks, climate policy |
| JEL: | D24 O47 H23 |
| Date: | 2020–07–23 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2073&r=all |
| By: | Muehlegger, Erich J. PhD; Rapson, David S. PhD |
| Abstract: | The true net environmental benefit of an electric vehicle is relative to the vehicle that an electric vehicle buyer would have bought and driven had they not opted for an electric vehicle. This “counterfactual” vehicle cannot be observed, but its fuel economy can be estimated. We use quasi-experimental variation in a generous California electric vehicle subsidy program to show that buyers of electric vehicles would have, on average, purchased fuel-efficient gasoline-powered cars had they not gone electric. |
| Keywords: | Engineering, Electric vehicles, user side subsidies, environmental impacts, consumer behavior, market share, automobile ownership, policy analysis, fuel consumption |
| Date: | 2020–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsdav:qt8dg237md&r=all |
| By: | Christoph Boehringer; Knut Einar Rosendahl (Norwegian University of Life Sciences, Ås / Norway, and Statistics Norway, Oslo / Norway) |
| Abstract: | Several European countries have decided to phase out coal power generation. Emissions from electricity generation are already regulated by the EU Emissions Trading System (ETS), and in some countries like Germany the phaseout of coal will be accompanied with cancellation of emissions allowances. In this paper we examine the consequences of phasing out coal, both for the broader economy, the electricity sector, and for CO2 emissions. We show analytically how the welfare impacts for a phaseout region depend on i) whether and how allowances are canceled, ii) whether other countries join phaseout policies, and iii) terms-of-trade effects in the ETS market. Based on numerical simulations with a computable general equilibrium model for the European economy, we quantify the economic and environmental impacts of alternative phaseout scenarios, considering both unilateral and multilateral phaseout. We find that terms-of-trade effects in the ETS market play an important role for the welfare effects across EU member states. For Germany, coal phaseout combined with unilateral cancellation of allowances is found to be welfare-improving if the German citizens value emissions reductions at 65 Euro per ton or more. |
| Keywords: | coal phaseout, emissions trading, electricity market |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:old:dpaper:430&r=all |
| By: | Zameer, Hashim; Yasmeen, Humaira; Zafar, Muhammad Wasif; Waheed, Abdul; Sinha, Avik |
| Abstract: | The objective of this paper is to explore the nexus of innovation-environment and economic growth in the context of the Indian economy. To achieve the study objective, we explored the role of technological innovation, FDI, trade openness, energy use and economic growth toward carbon emissions. Using the data of 1985-2017, the study employed ARDL bound testing and VECM methods to capture the effects of technological innovation, trade openness, FDI, energy use and economic growth on CO2 emissions. Empirical estimation has confirmed the existence of long-run cointegration. Similarly, in the long-run, it is found that trade openness, energy use and economic growth positively reinforce CO2 emissions. In contrast, technological innovation and FDI negatively reinforce CO2 emissions in the long-run. Further, VECM indicate that the relationship among innovation, trade openness, and energy use is bidirectional in the long-run. Whereas, unidirectional relation has been found that is coming from GDP to carbon emissions, FDI, innovation, trade, and energy use. In the short-run, unidirectional link found which is coming from FDI, innovation, and energy use to carbon emission. However, the association between emissions and trade openness is bidirectional. The conclusions put-forward policy implications that innovation is a way to reduce environmental degradation. |
| Keywords: | Innovation; trade; CO2 emissions; growth; environment |
| JEL: | Q5 Q53 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:101323&r=all |
| By: | Newbery, D. |
| Abstract: | Member States have published National Energy and Climate Plans with challenging variable renewable electricity (VRE) targets. As VRE has a high peak to average output, the Single Electricity Market of the island of Ireland (SEM), will need to consider how best to balance the lost value of curtailment against the extra costs of higher Simultaneous Non-Synchronous Penetration (SNSP), more interconnector capacity and/or more storage. The paper develops a simple spreadsheet model to explore these options for the 2026 VRE targets in the SEM and her neighbours. Raising SNSP from 75% to 85% reduces curtailment from 13.3% to 8.1%, saving 1,338 GWh/yr of spilled wind. Adding the Celtic Link of 700 MW at SNSP of 75% reduces curtailment to 12.4% and saves 235 GWh/yr. Adding 100 MW of batteries saves 18 GWh/yr. The marginal spilled wind can be four times the average. |
| Keywords: | Variable renewable electricity, curtailment, interconnection, storage |
| JEL: | C63 Q42 Q54 |
| Date: | 2020–07–23 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2072&r=all |
| By: | Brendan Casey; Wayne B. Gray; Joshua Linn; Richard D. Morgenstern |
| Abstract: | Pricing carbon emissions from an individual jurisdiction may harm the competitiveness of local firms, causing the leakage of emissions and economic activity to other regions. Past research concentrates on national carbon prices, but the impacts of subnational carbon prices could be more severe due to the openness of regional economies. We specify a flexible model to capture competition between a plant in a state with electric sector carbon pricing and plants in other states or countries without such pricing. Treating energy prices as a proxy for carbon prices, we estimate model parameters using confidential plant-level Census data, 1982–2011. We simulate the effects on manufacturing output and employment of carbon prices covering the Regional Greenhouse Gas Initiative (RGGI) in the Northeast and Mid-Atlantic regions. A carbon price of $10 per metric ton on electricity output reduces employment in the regulated region by 2.7 percent, and raises employment in nearby states by 0.8 percent, although these estimates do not account for revenue recycling in the RGGI region that could mitigate these employment changes. The effects on output are broadly similar. National employment falls just 0.1 percent, suggesting that domestic plants in other states as opposed to foreign facilities are the principal winners from state or regional carbon pricing. |
| JEL: | Q4 Q52 Q58 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:20-21&r=all |
| By: | Jaller, Miguel; Pineda, Leticia; Gueldas, Yasar; Alemi, Farzad; Otay, Irem |
| Abstract: | California is in the midst of improving its freight system. For example, the California Sustainable Freight Action Plan (CSFAP) established the goal of reaching a 25% increase in freight efficiency, the use of 100,000 zero emission vehicles and equipment (and maximize the number of near zero emission vehicles) in the system, and improving economic competitiveness. Although there are multiple strategies and approaches to help achieve these goals, this study focuses on analyzing the factors to foster the adoption of zero and near-zero emission vehicles. For example, the use of monetary and non-monetary incentives to elucidate behavioral changes (e.g., fleet purchase decisions). This study considered compressed (renewable) natural gas (CNG/RNG), hybrid electric (HE), battery electric (BE) and fuel-cell hydrogen (H2) vehicles. The research team collected information through a web-based stated preference survey sent (in two waves) to fleets and carrier companies to gather data about their economics, and their vehicle purchase preferences. However, the response rate was very small which limited the type of analyses conducted with the data. Alternatively, the study team developed a multi-criteria decision-making tool using a Spherical Fuzzy Analytical Hierarchy Process based on experts’ knowledge. The approach considered the variability in the technical and operational characteristics, market readiness, and other factors related to these technologies. The model helped provides insights about the most appropriate options for different uses (e.g., last mile, long-haul distribution). Specifically, the authors evaluate the alternatives using five criteria: economic; business, incentives & market-related; environmental & regulatory; infrastructure; and safety & vehicle performance factors. The analyses also consider twenty-one sub-criteria, e.g., total cost of ownership, payback period, brand image, financial & non-financial incentives, and public/private fueling/ charging infrastructure availability. View the NCST Project Webpage |
| Keywords: | Business, Social and Behavioral Sciences, Last mile distribution, Behavioral modeling, Zero emission vehicles, Incentive programs, Expert decision modeling |
| Date: | 2020–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsdav:qt64k579cv&r=all |
| By: | Franziska Holz; Claudia Kemfert |
| Abstract: | Natural gas could play an increasing role in the German energy system following the coal exit decided in July 2020 by the German parliament. However, natural gas has no climate benefit compared to coal. What is more, Europe risks to become a battle-ground for the conflict between Russia and the United States. The construction of the Baltic Sea pipeline Nordstream 2 has set in motion a downward spiral of sanctions and counter-sanctions. US liquefied natural gas (LNG) exports compete with Russian gas exports to Europe. While German and European policy makers debate about an appropriate reaction to the US sanctions, we ask which role will US LNG be able to play in the European natural gas market. Model results by DIW Berlin pro- vide first answers. In the long run, however, the European climate policy commitments will lead to a phase-out of fossil natural gas in the wake of the energy transition in the next decades. |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwfoc:5en&r=all |
| By: | Pillai N., Vijayamohanan; AM, Narayanan |
| Abstract: | One positive impact of the 1973 oil crises has been the concerted effort across the world to reduce energy consumption through energy use efficiency improvements. Improving energy efficiency ensures the objective of conserving energy and thus promoting sustainable development. Recognition of this fact has now appeared in terms of including the aim of improving efficiency as an important component of electrical energy policy in all the countries across the globe. A large number of studies have demonstrated that the aggregate energy efficiency inherently encompasses a number of factors that affect energy intensity, viz., a structural effect, representing the effect of changes in economic structure, an activity effect, representing the changes in the levels of aggregate activity, a wealth effect, representing changes in GDP, and an underlying energy efficiency effect, including a technical effect and an energy quality effect. This new light has in turn led to the development of the techniques of factorization or decomposition. Energy efficiency research in general has opened up three avenues of enquiry, namely, the measurement of energy productivity, the identification of impact elements (such as the three factors mentioned above) and the energy efficiency assessment. The traditional interest in energy efficiency has centred on a single energy input factor in terms of productivity that has become famous through an index method proposed by Patterson (1996). The enquiry that has proceeded from the problems associated with this method has led to identifying the effect source of variation, in terms of some decomposition analysis. Almost all the earlier studies have in general employed the method of indicators pyramid, based on which energy efficiency changes have been decomposed from other factors at each level of disaggregation using factorization method. The Laspeyres index decomposition approach was in vogue earlier that has now been replaced with methodologically superior Divisia approach, in terms of Logarithmic Mean Divisia index (LMDI). Finally, a new energy efficiency estimation method, criticizing the single factor energy efficiency method, has come up utilizing a multi-variate structure. Here we have a parametric (econometric) approach, in terms of frontier production function analysis, and a non-parametric approach, in terms of data envelopment analysis (DEA). |
| Keywords: | Energy Efficiency, Productivity, Kerala, Decomposition, Data Envelopment Analysis, Stochastic Frontier Model |
| JEL: | Q40 Q43 Q47 Q48 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:101424&r=all |
| By: | David Stern |
| Abstract: | The size of the economy-wide rebound effect is crucial for estimating the contribution that energy efficiency improvements can make to reducing greenhouse gas emissions and for understanding the drivers of energy use. Economy-wide rebound from an energy efficiency improvement includes changes in the use of energy to produce complementary and substitute goods or inputs and other flow-on effects that affect energy use across the economy as well as the direct rebound due to energy users using more of an energy service that has become less costly as result of improved energy efficiency. Jevons first argued in 1865 that improvements in energy efficiency increase total energy use, and in recent decades researchers have argued for and against this “backfire” hypothesis. Theory provides some guidance on the factors affecting rebound but does not impose much constraint on the range of possible responses. Historical evidence suggests that the improved energy efficiency of recent technology has not reduced energy use because consumption has shifted to more energy-intensive goods and services. Simulations and econometric research have produced mixed results. Some recent general equilibrium studies find large rebound, around 100%, but more research is needed to confirm or refute these findings. |
| Keywords: | Energy efficiency, technological change, survey, review |
| JEL: | Q43 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2020-70&r=all |
| By: | Vicent Alcántara Escolano (Department of Applied Economics, Universidad Autónoma de Barcelona, 08193, Bellaterra, Spain); Emilio Padilla Rosa (Department of Applied Economics, Universidad Autónoma de Barcelona, 08193, Bellaterra, Spain); Pablo del Río González (Instituto de Políticas y Bienes Públicos, Centro Superior de Investigaciones Científicas, Calle Albasanz 26-28, Madrid, 28037, Spain) |
| Abstract: | We apply an index decomposition analysis to investigate the main drivers of CO2 emissions in the electricity generation sector in Spain over the period 1991–2017. The analysis allows us to quantify the impact of five different effects —associated with an extended version of the Kaya identity— that influence those emission trends. These effects are: the carbonisation effect, the transformation effect, the fossil intensity effect, the electricity intensity effect and the production effect. Taking into account the evolution of these emissions over the period, four subperiods are identified. The results show that the relevance of the drivers has changed over time (i.e. in the four subperiods). The fossil intensity, electricity intensity and production effects played an important role in the increase in emissions during the first half of the period, and particularly from 1999 to 2005. In contrast, the carbonisation and fossil intensity effects were the dominant drivers of the reduction in emissions between 2006 and 2010. The research allows the impact of different measures on emissions to be evaluated by considering their influence on the different effects, and suggests which sets of measures would be more effective in reducing emissions. Therefore, several policy implications are derived. |
| Keywords: | CO2 emissions; electricity generation; logarithmic mean Divisia index. |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:uab:wprdea:wpdea2005&r=all |
| By: | Amir, Md. Khaled; Amir, Md Zobayer |
| Abstract: | Since adopting all the possible plans, strategies, and containing measures to defy the outbreak of COVID-19 pandemic, the world fails to prevent rapid contagion of a novel coronavirus, breaks down the regular all-inclusive socio-economic channels, damages countless lives and livelihoods and forces global economic downturn could be facing world’s worst depression since the 1930s. This research paper has two phases amid and after the impact of novel coronavirus on global Scio-economy, can be mitigated by focusing and implementing effective responsive and reconstructive socio-economic plans and frameworks covering emergency financing, robust capital market, independence of the central bank, and sound banking sector, currency swap, liquidity facilities, tax relief, loan forbearance, and expanded unemployment insurance, concessional financing, grants, debt relief, global collaboration, innovating new diversified technologies, job transition, reskilling, re-deployment, setting watchdog for corruption, global collaboration, adding resilience, response, and re-configurability in existing supply chain metrics are essential to lighten the global socio-economic imbalances including financial distress, economic stress, food crisis, rising hunger, job layoffs, educational institutions closure, supply chain interruptions and shutting down businesses. Declining Carbon dioxide (CO2) emission creating an opportunity of establishing a low carbon economy and reducing air pollution and environmental crisis, a chance on focusing clean energy, and emphasize more on hi-tech like cloud computing and artificial intelligence are positive outcomes from coronavirus pandemic, will help to accelerate response and recovery plans against COVID-19. |
| Keywords: | COVID-19, Socio-Economy, Clean Energy, Cloud Computing, Job Transition, Fiscal Aid JEL Code: A120, B55, L86, J62, H87 |
| JEL: | A13 D6 E61 H3 M2 M21 O2 |
| Date: | 2020–06–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:101244&r=all |
| By: | Jennifer Considine; Abdullah Aldayel (King Abdullah Petroleum Studies and Research Center) |
| Abstract: | The general theory of storage suggests that the level of inventories is a key factor in determining the structure of the oil futures curve, or the basis, over time. The basis is the difference between the price of oil in the futures market and the price of oil in the spot market. As an indicator of future price movements, the basis follows a different dynamic when inventories are in scarce supply or in surplus. This means that there are several different market states that reflect different underlying crude oil market conditions. |
| Keywords: | Markov Switching regime model, Oil markets, Oil price |
| Date: | 2020–07–06 |
| URL: | http://d.repec.org/n?u=RePEc:prc:dpaper:ks--2020-dp15&r=all |
| By: | Fitiwi, Desta; Lynch, Muireann Á.; Bertsch, Valentin |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:rb202010&r=all |
| By: | Zhou, W.; Moncaster, A.; Reiner, D.; Guthrie, P. |
| Abstract: | A Promoting the decarbonisation of buildings requires effective policy measures. An integral part of policy design is ex-ante evaluation of possible policy options and effects. System Dynamics, one of a range of potential modelling paradigms, emphasises the dynamic complexity arising from stock-and-flow structures, feedbacks, non-linearities and time lags of the system in question. It is therefore well placed to model building stock turnover dynamics and the associated energy use and carbon emissions, in order to conduct scenario analysis for policy evaluation. Previous efforts to employ System Dynamics models in buildings in various national contexts are found to have some common fundamental structural and behavioural limitations. We present an improved formulation that includes both building stock disaggregation and dynamics of energy-related retrofits. The model is characterised by greater transparency facilitating reproducibility and further improvements, high structural and functional flexibility for either extensions or reductions depending upon needs, and high generality and adaptability in diverse applications. It can be used as a stand-alone model or as part of a larger model for policy evaluation and scenario analysis exploring the transformation of building stock from improving energy efficiency and shifting towards low-carbon development. |
| Keywords: | building stock, System Dynamics, disaggregation, aging chain, energy retrofit |
| JEL: | C60 O18 Q40 |
| Date: | 2020–06–23 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2057&r=all |
| By: | López-Feldman, Alejandro; Chávez, Carlos; Alejandra Vélez, María; Bejarano, Hernán; B. Chimeli, Ariaster; Féres, José; Robalino, Juan; Salcedo, Rodrigo; Viteri, César |
| Abstract: | COVID-19 is currently having major short run effects with possible serious long run implications for the environment and the management of natural resources in Latin America. In this paper, we discuss the possible effects of the pandemic on air pollution, deforestation and other relevant environmental dimensions across the region. With contributions from environmental economists from eight countries, we give an overview of the initial and expected environmental effects of this health crisis. We discuss potential effects on environmental regulations, possible policy interventions, and an agenda for future research for those interested in the design and evaluation of environmental policies relevant for the Latin American context. |
| Keywords: | Air pollution; COVID-19; coronavirus; deforestation; environmental impacts; environmental policy; Latin America; pandemic; SARS-Cov2-19 |
| JEL: | R10 |
| Date: | 2020–07–15 |
| URL: | http://d.repec.org/n?u=RePEc:ris:nereus:2020_004&r=all |
| By: | Jacques Fontanel (CESICE - Centre d'études sur la sécurité internationale et les coopérations européennes - UPMF - Université Pierre Mendès France - Grenoble 2 - IEPG - Sciences Po Grenoble - Institut d'études politiques de Grenoble) |
| Abstract: | Global warming, in the light of the market economy of capitalism, appears to be a long-term issue, whereas decisions concerning biodiversity and the quality of life of humans on Earth must be taken today. The rise of the third industrial revolution based on the Internet, renewable energies and careful management of the Earth's resources is becoming urgent. ICTs, vehicles, energy sources, real estate and agriculture are directly concerned. States must make it possible for this revolution to take place quickly, despite the major obstacles they have to overcome, such as the shortcomings of renewable energy, blocked assets, the interests of the dominant major groups resulting from the second industrial revolution, the short-term policies of pension funds, and the reluctance of fossil fuel producers. Technological innovation cannot solve all societal and social issues. The rules of the game of economic globalisation must therefore be changed, through public and private commitment to the green revolution, a search for greater social justice or the application of the rules of "enlightened catastrophism". Without a strong action by humans, the evolution of the planet will become humanly uncontrollable and will even raise the question of the survival of humanity. |
| Abstract: | Le réchauffement climatique, à l'aune de l'économie de marché du capitalisme, apparaît comme une question de long terme, alors que les décisions concernant la biodiversité et la qualité de la vie des hommes sur Terre doivent être prises aujourd'hui. L'essor de la troisième révolution industrielle fondée sur Internet, les énergies renouvelables et la gestion précautionneuse des ressources de la Terre devient urgent. Les TIC, les véhicules, l'immobilier et l'agriculture sont directement concernés. Les Etats doivent rendre possible la mise en place rapide de cette révolution, malgré les obstacles importants qu'ils ont à surmonter, comme les failles de l'énergie renouvelable, les actifs bloqués, les intérêts des grands groupes dominants issus de la deuxième révolution industrielle, les politiques à court terme des fonds de pension, et les réticences des producteurs d'énergies fossiles. L'innovation technologique ne peut pas résoudre toutes les questions sociétales et sociales. Il convient donc de modifier les règles du jeu de la globalisation mondialiste, par une volonté d'engagement public et privé en faveur de la révolution verte, une recherche de plus grande justice sociale ou l'application des règles du « catastrophisme éclairé ». Sans une action volontariste des hommes, l'évolution de la planète deviendra humainement incontrôlable et posera même la question de la survie de l'humanité. |
| Keywords: | pension funds,Industrial revolution,global warming,renewable energies,innovation,enlightened catastrophism,réchauffement climatique,Révolution industrielle,fonds de pension,catastrophisme éclairé,energies renouvelables |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02881055&r=all |
| By: | Sofronis Clerides (University of Cyprus, Cyprus; Rimini Centre for Economic Analysis); Styliani-Iris Krokida (Athens University of Economics and Business, Greece); Neophytos Lambertides (Cyprus University of Technology, Cyprus); Dimitris Tsouknidis (Department of Maritime Studies, University of Piraeus, Greece) |
| Abstract: | This paper examines the impact of oil supply and demand shocks on gasoline prices and consumer sentiment in the Euro Area. Results reveal that aggregate consumer sentiment and its components deteriorate notably as a response to positive shocks to real gasoline prices. On the contrary, positive oil-specific demand shocks do not trigger a deterioration of consumer sentiment. In other words, consumer sentiment is affected primarily by unexpected changes in gasoline prices at the pump rather than unexpected changes in crude oil prices. The analysis is further refined to analyze the effects of these shocks to six subcomponents of consumer sentiment. |
| Keywords: | oil supply and demand shocks, gasoline prices, consumer sentiment, euro area |
| JEL: | G10 G11 G12 G14 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:20-22&r=all |
| By: | Marc Baudry; Anouk Faure; Simon Quemin |
| Abstract: | We develop an equilibrium model of emissions permit trading in the presence of fixed and proportional trading costs in which the permit price and firms’ participation in and extent of trading are endogenously determined. We analyze the sensitivity of the equilibrium to changes in the trading costs and firms’ allocations, and characterize situations where the trading costs alternatively depress or raise permit prices relative to frictionless market conditions. We calibrate our model to annual transaction and compliance data in Phase II of the EU ETS (2008-2012) which we consolidate at the firm level. We find that trading costs in the order of 10k€ per annum plus 1€ per permit traded substantially reduce discrepancies between observations and theoretical predictions for firms’ behavior (e.g. autarkic compliance). Our simulations suggest that ignoring trading costs leads to an underestimation of the price impacts of supply-curbing policies, this difference varying with the incidence on firms. |
| Keywords: | Emissions trading, Transaction costs, EU ETS, Policy design and evaluation |
| JEL: | D22 D23 H32 L22 Q52 Q58 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:cec:wpaper:2007&r=all |
| By: | Mohammed, Mikidadu; Barrales-Ruiz, Jose A. |
| Abstract: | At the onset of coronavirus in January 2020, crude oil price was around $51.63 per barrel. But the subsequent spread of the virus across countries all over the world adversely impacted the day-to-day functioning of major industries, corporations, and economies. This adverse impact was amplified by the lockdown measures by governments who were justifiably concerned about the potential devastating effect of the pandemic. As the outbreak intensified, so did oil prices plunge into historic lows (at some point, negative). Is the precipitous drop in oil prices due to the COVID-19 pandemic or are there potentially other factors at play? In this paper, we investigate this question using a pentavariate structural vector autoregression (SVAR) model. Specifically, we identify an exogenous oil price shock arising from the pandemic together with the traditional underlying supply, demand, and financial market shocks to global crude oil markets. We find that a pandemic shock causes a delayed adverse effect on oil prices. In addition, our findings lend support to the view that changes in financial market conditions that affect financial investment decisions also play a significant role in oil price movements. There is however no evidence of a strong impact emanating from the brief Russia-Saudi price war. We also compute the forecast error variance decomposition and find that the impact of a pandemic shock together with aggregate demand and financial market shocks are not trivial in the short run. Taken together, the findings underscore the fruitfulness of research aimed at better understanding the effects of a pandemic shock on oil price movements and highlight the need for policymakers and market stakeholders to explicitly consider global health conditions when analyzing the causes and consequences of oil price shocks. |
| Keywords: | pandemic,oil price shocks,structural VAR,novel coronavirus,COVID-19 |
| JEL: | I15 Q41 Q43 Q47 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:222268&r=all |
| By: | Atasoy, Ayse Tugba (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)) |
| Abstract: | In distinct decision environments, consumers often fail to financially optimize their decisions. In liberalized electricity markets, consumers frequently do not optimize their electricity choices and stick with the default providers instead, despite the ability to choose among an increasingly large set of electricity suppliers and benefit from lower cost options. In this paper, we study the effect of different contextual features of the choice environment (i.e., default and active choice enforcement) and search costs (i.e., high and low) on the quality of electricity contract choices, with the help of a randomized controlled laboratory experiment. We provide evidence that the default contract rule lowers decision quality compared to the active decision rule in both search cost environments. Default rules lower the quality of contract choices especially for the individuals with lower cognitive ability. Contrary to the expectations, we observe that the number of alternatives has no effect on the quality of electricity contract choices. Our findings have important implications for regulatory rule setting in the electricity market. |
| Keywords: | Contract Switching; Electricity Contracts; Default Rules; Search Costs; Decisionmaking |
| JEL: | C91 D12 D91 Q48 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:ris:fcnwpa:2020_007&r=all |
| By: | Cédric Clastres; Olivier Rebenaque; Patrick Jochem |
| Abstract: | Prosumers have different choices to maximize their photovoltaic (PV) self-consumption such as demand response (DR) or storage. In this paper, we investigate the prosumers’ profits related to the demand response provision. An optimization model is developed which allows the prosumer to bid in DR markets. We focus on two French markets: the NEBEF and the capacity market in which a signal is provided 24h before the real-time. We show that the prosumers are encouraged to provide a DR but the profits are too low compared to the battery investment. We derive a DR premium to foster battery adoption. The premium level depends on the retail rate structure but also on the load curve uncertainty |
| Keywords: | Prosumers, Energy storage, Subsidies, Demand Response Markets |
| JEL: | Q20 Q28 Q42 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:cec:wpaper:2008&r=all |
| By: | Knut Are Aastveit; Hilde C. Bjørnland; Jamie L. Cross |
| Abstract: | Do inflation expectations and the associated pass-through of oil price shocks depend on demand and supply conditions underlying the global market for crude oil? We answer this question with a novel structural vector autoregressive model of the global oil market that jointly identifies transmissions of oil demand and supply shocks through the real price of oil to both expected and realized inflation. Our main insight is that US households form their expectations of inflation differently when faced with long sustained increases in the price of oil, such as the early millennium oil price surge of 2003 to 2008, as compared to short and sharp price fluctuations that characterized much of the twentieth century. We also find that oil demand and supply shocks can explain a large proportion of expected and realized inflation dynamics during multiple periods of economic significance, and resolve disagreements around the role of oil prices in explaining the missing deflation puzzle of the Great Recession. |
| Keywords: | Inflation expectations, inflation pass-through, oil prices |
| JEL: | E31 D84 Q41 Q43 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2020-64&r=all |
| By: | Soroush, Golnoush; Cambini, Carlo; Jamasb, Tooraj; Llorca, Manuel |
| Abstract: | It is generally accepted that institutions are important for economic development. However, whether the performance of regulated utilities within a country is affected by the quality of institutions is yet to be investigated thoroughly. We analyse how the quality of regional institutions impact performance of Italian electricity distribution utilities. We use a stochastic frontier analysis approach to estimate cost functions and examine the performance of 108 electricity distribution utilities from 2011 to 2015. This unique dataset was constructed with the help of the Italian Regulator for Energy, Networks, and Environment. In addition, we use a recent dataset on regional institutional quality in Italy. We present evidence that utilities in regions with better government effectiveness, responsiveness towards citizens, control of corruption, and rule of law, also tend to be more cost efficient. The results suggest that national regulators should take regional institutional diversity into account in incentive regulation and efficiency benchmarking of utilities. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:oeg:wpaper:2019/05&r=all |
| By: | Argüelles, Pablo; Orea, Luis |
| Abstract: | In December 2013 a new electricity law was approved in Spain as part of an electricity market reform including a new remuneration scheme for distribution companies. This remuneration scheme wasupdated in December 2019 and the new regulatory framework introduceda series of relevant modifications that aim to encourage the regulated firms to reduce their power supply interruptionsusing a benchmarking approach. While some managerial decisions can prevent electricity power supply interruptions,other managerial decisions are more oriented to mitigate the consequences of these interruptions. This paper examines the second type of decisions using a unique dataset on the power supply interruptionsof a Spanish distribution company network between 2013 and 2019. We focus our analysis in the effect of grid automatization on the restoration times, the relative efficiency of the maintenance staff, and the importance of its location. We combinea bottom-up spatial model and a stochastic frontier model to examine respectively external and internal power supply interruptionsat municipal level. This model resembles the conventional spatial autoregressive models but differ from them in several important aspects. |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:oeg:wpaper:2020/01&r=all |
| By: | Bärd Harstad (University of Oslo and the Frisch Centre.); Francesco Lancia (Università di Salerno, CSEF and CEPR.); Alessia Russo (BI Norwegian Business School and CEPR.) |
| Abstract: | We characterize the optimal policy and policy instruments for self-enforcing treaties when countries invest in green technology before they pollute. If the discount factor is too small to support the first best, then both emissions and investments will be larger than in the first best, when technology is expensive. When technology is inexpensive, countries must instead limit or tax green investment in order to make future punishment credible. We also uncover a novel advantage of price regulation over quantity regulation, namely that when regulation is sufficiently flexible to permit firms to react to non-compliance in another country, the temptation to defect is reduced. The model is tractable and allows for multiple extensions. |
| Keywords: | climate change, environmental agreements, green technology, policy instruments, repeated games, compliance, self-enforcing treaties. |
| JEL: | D86 F53 H87 Q5 |
| Date: | 2020–07–22 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:572&r=all |
| By: | Majumderad, Monoj Kumar; Raghavan, Mala; Vespignani, Joaquin |
| Abstract: | An important economic paradox in the economic literature is that countries with abundant natural resources are poor in terms of real gross domestic product per capita. This paradox, known as the ‘resource curse’, is contrary to the conventional intuition that natural resources help to improve economic growth and prosperity. Using panel data for 95 countries, this study revisits the resource curse paradox in terms of oil resources abundance for the period 1980–2017. In addition, the study examines the role of trade openness in influencing the relationship between oil abundance and economic growth. The study finds trade openness is a possible avenue to reduce the resource curse, in our sample, trade openness reduces oil curse by around 25%. Trade openness allows countries to obtain competitive prices for their resources in the international market and access advanced technologies to extract resources more efficiently. Therefore, natural resource–rich economies can reduce the resource curse by increasing exposure to international trade. |
| Keywords: | Oil Course, Economic Growth, Trade Openness |
| JEL: | E0 E00 E4 E42 Q4 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:101138&r=all |
| By: | Grytten, Ola Honningdal (Dept. of Economics, Norwegian School of Economics and Business Administration); Lindmark, Magnus (Umeå University); Minde, Kjell Bjørn (Western Norway University of Applied Sciences) |
| Abstract: | During the last decades several scholars have argued that environmental degradation first increases in initial phases of economic growth, and thereafter declines as economic growth enters a certain level in developed economies. This makes environmental degradation form an inverse U-shaped curve, called the environmental Kuznets curve (EKC). Environmental degradation can be measured by different proxies. This paper deals with two, i.e. energy consumption and energy intensity (EI), which again is measured as the ratio between energy consumption and GDP. The relationship of energy consumption and energy intensity to economic growth can thus, serve as tools to examine whether an EKC exists. Hence, this paper presents continuous series of energy consumption, energy intensity and gross domestic product for the Norwegian mainland economy 1835-2019. These are thereafter utilized in order to examine the possible existence of relative and absolute environmental Kuznets curves (EKC). The time series are established by drawing on available data, and annual figures for the period 1835-2019 are presented for the first time. They depict a development which reflect that EKCs exist. The paper also offers a polynomial regression model to investigate into the relationship between environmental degradation, measured by energy consumption, energy intensity and economic growth expressed as GDP per capita. It concludes there is clear evidence of both relative and an absolute EKC-relations between environmental degradation and economic growth, with 1975 as relative and 2002 as absolute turning points. |
| Keywords: | Environmental Kuznets curve; energy intensity; energy consumption; economic growth |
| JEL: | N53 N54 O11 O13 O44 Q01 Q34 |
| Date: | 2020–07–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhheco:2020_011&r=all |
| By: | Bertsche, Dominik (University of Konstanz); Braun, Robin (Bank of England) |
| Abstract: | We propose to exploit stochastic volatility for statistical identification of structural vector autoregressive models (SV-SVAR). We discuss full and partial identification of the model and develop efficient Expectation Maximization algorithms for Maximum Likelihood inference. Simulation evidence suggests that, compared to alternative models, the SV-SVAR works well in identifying structural parameters also under misspecification of the variance process. We apply the model to study the importance of oil supply shocks for driving oil prices. Since shocks identified by heteroskedasticity may not be economically meaningful, we exploit the framework to test instrumental variable restrictions which are overidentifying in the heteroskedastic model. Our findings suggest that conventional supply shocks are negligible drivers of oil prices, while news shocks about future supply account for almost all the variation. |
| Keywords: | Structural vector autoregression (SVAR); identification via heteroskedasticity; stochastic volatility; external instruments. |
| JEL: | C32 Q43 |
| Date: | 2020–06–05 |
| URL: | http://d.repec.org/n?u=RePEc:boe:boeewp:0869&r=all |
| By: | Olivier Feron (EDF - EDF, FiME Lab - Laboratoire de Finance des Marchés d'Energie - Université Paris Dauphine-PSL - CREST - EDF R&D - EDF R&D - EDF - EDF); Pierre Gruet (EDF - EDF, FiME Lab - Laboratoire de Finance des Marchés d'Energie - Université Paris Dauphine-PSL - CREST - EDF R&D - EDF R&D - EDF - EDF) |
| Abstract: | In this paper we study the calibration of specific multi-factorial Heath-Jarrow-Morton models to electricity market prices, with a focus on the estimation of the optimal number of factors. We describe a common statistical procedure based on likelihood maximisation and Akaike / Bayesian information criteria, in the case of calibration on futures prices, as well as on both spot and futures prices. We perform a detailed analysis on 6 European markets: Belgium, France, Germany, Italy, Switzerland and UK. The results show a lot of similarities on all the markets considered, especially on the optimal number of factors equal to 5; and on the behaviour of the different factors. |
| Keywords: | Electricity markets,model calibration,model selection,power price model |
| Date: | 2020–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02880824&r=all |
| By: | Breitenstein, Miriam; Anke, Carl-Philipp; Nguyen, Duc Khuong; Walther, Thomas |
| Abstract: | We assess the value of stranded coal-fired power plants in Germany due to the critical phase- out by 2038. Within a Monte Carlo simulation, the scenarios under consideration (a slow decommissioning at the end of the technical lifetime in 2061, the highly probable phase-out by 2038, and an accelerated phase-out by 2030) are additionally assigned distributions to display the uncertainty of future developments. The results show an overall stranded asset value of €0.4 billion given the phase-out by 2038 and additional €14.3 billion if the phase-out is brought forward by eight years. This study also depicts the impacts of carbon pricing and the feed-in from renewable energy sources on the merit order and eventually the deterioration in economic conditions for hard coal and lignite power plants. Lastly, we illustrate immediate concerns for share prices of affected companies and contributes to closing the research gap between stranded physical and financial assets. |
| Keywords: | Coal Phase-out; Energy transition; Germany; Stranded Assets |
| JEL: | C53 L13 L94 Q38 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:101763&r=all |
| By: | Fitiwi, Desta; Lynch, Muireann Á.; Bertsch, Valentin |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:rb202014&r=all |
| By: | Tovar Reaños, Miguel; Lynch, Muireann Á. |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp665&r=all |
| By: | Victoire Girard; Nicolas Berman; Mathieu Couttenier |
| Abstract: | This paper documents a new channel of the natural resource curse: the fragmentation of identities, between ethnic groups and nations. We combine individual data on the strength of ethnic – relative to national – identities with geo-localized information on the contours of ethnic homelands and on the timing and location of mineral resources exploitation in 25 African countries, from 2005 to 2015. Our strategy takes advantage of several dimensions of exposure to resources exploitation: time, spatial proximity, and ethnic proximity. We show that the strength of an ethnic group identity increases when mineral resource exploitation in that group’s historical homeland intensifies. This result holds independently of the impact of resources on local economic conditions and conflicts. We then investigate the various potential channels of transmission. Our findings suggest that feelings of economic deprivation and political exclusion associated with natural resources exploitation drive their impact on the strength of ethnic identities. |
| Keywords: | Identity, ethnicity, natural resources |
| JEL: | J15 N57 O55 Q32 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:unl:novafr:wp2007&r=all |
| By: | Yan, Shiyu; De Bruin, Kelly; Dennehy, Emer; Curtis, John |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp669&r=all |
| By: | Madhuparna Ganguly (Indira Gandhi Institute of Development Research) |
| Abstract: | This paper analyzes the implications of firms' intrinsic valuation for pro- environmental production on technology adoption and signaling outcome when adopting a costly pollution-free technology does not favour profit despite consumers' higher willingness to pay for the environment-friendly product. As growing environmental awareness makes individuals and businesses increasingly cognizant of the ramifications of their actions, acting pro-environmentally engenders feelings of contentment and boosts self-image. We find that, while under symmetric information the intrinsically motivated firm optimally adopts pollution-free production, under asymmetric information the same is true only when consumers are sufficiently generous for or incredulous regarding pro-environmental behaviour, such that signaling is feasible. Although the signaling outcome is environmentally desirable, firms face challenges in balancing environmental objectives with profit goals when information is asymmetric. We suppose post-production subsidization to buttress ethical initiatives of firms and show cost-equivalence of lumpsum and per-unit subsidy schemes. |
| Keywords: | Environmental consciousness, Intrinsic motivation, Self-image, Signaling, Technology, adoption |
| JEL: | D63 D82 D91 L21 Q52 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:ind:igiwpp:2020-021&r=all |
| By: | Mabanga, Chris; Bonga-Bonga, Lumengo |
| Abstract: | This study assesses the effects of the magnitude of oil price shocks i.e. large negative, positive and moderate oil price shocks on equity market returns in BRICS countries during different market circumstances by making use of quantile-on-quantile regression. The current study differs from studies that employ quantile-on-quantile in assessing the relationship between oil price shocks and equity returns in different aspects. Firstly, the study intends to assess how this relationship differs per countries given their factor endowment (i.e. whether they export or import oil) within the BRICS grouping. Secondly, we also differ from Sim Zhou (2015) and Tchatoka et al. (2018) because we introduce the supply shocks by following the same structure as Kilian and Park (2009) but changing the Cholesky decomposition by ordering real oil price first, assuming the contemporaneous response of global production to oil price. The results of the empirical analysis show that distinction should be made between the demand-driven and supply-driven oil price shocks and that the outcome of this relationship depends on whether a country is a net importer or exporter of crude oil. For most of the net oil-importing countries, the low oil price demand shocks, which translate to lower oil prices, further stimulate equity markets when they are at peak. And for oil-producing countries in general, high demand oil price shocks provide an incentive for the expansion of equity markets during bad market conditions. |
| Keywords: | equity returns, oil price shocks, quantile-on-quantile |
| JEL: | C21 C58 G15 |
| Date: | 2020–06–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:101403&r=all |
| By: | Forslid, Rikard |
| Abstract: | This paper analyzes the environmental impact of emissions related to trade and trans- portation. It is shown that transportation may in principle lower global emissions if the production sector is dirtier than the transport sector. The measure of a sector's dirtiness is related to the emissions taxes and the abatement efficiency within that sector. It is shown that a firm's abatement efficiency can be calculated from the emission-to-cost ratio times the emissions tax. Using Swedish data to rank 5-digit industries in terms of their dirtiness reveals that several production sectors have a higher dirtiness index than transportation does. |
| Keywords: | Emissions; Trade; Transportation |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14228&r=all |
| By: | Tovar Reaños, Miguel A. |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:rb202013&r=all |
| By: | Jean-Marc Bourgeon (X-DEP-ECO - Département d'Économie de l'École Polytechnique - X - École polytechnique, ECO-PUB - Economie Publique - AgroParisTech - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | The importance of network externalities affecting technology diffusion in the greening of the economy is analyzed using a simple dynamic model. The socially optimal path of the economy can be implemented by requiring firms to comply to technical standards. As otherwise firms make investment decisions based on their expectations of the magnitude of shocks affecting network effects, using only incentive-based instruments of regulation (emissions taxes and subsidies for green investments) to green the economy leads to efficiency losses due to economic fluctuations. |
| Keywords: | Technology adoption,sustainability,Growth |
| Date: | 2020–06–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02799535&r=all |
| By: | Mamadou Saliou Barry; Anna Creti |
| Abstract: | We analyze pay-as-you-go (PAYG) contracts subscribed by 10,120 consumers living in Benin (Sub-Saharan Africa) to purchase solar kits or panels for lighting and charging services. PAYG are flexible loans that allow fees payment through mobile banking. Most of the PAYG consumers live in well electrified areas (Cotonou, Porto Novo, Abomey Calavi, in the coastal zone). By estimating a very simple multinomial logit model, we find that these customers have a high probability to enroll in PAYG contracts. Living in urban and peri-urban areas, they use solar devices to substitute expensive and often unreliable grid electricity services. Consumers located in more periferic and less electrified areas (Savalou) have a low probability to default, as the substitution effect is weaker. Overall, in our case study, PAYG targets credit worthy consumers, in order to decrease the investment risk of the company providing solar devices. These results cast some doubts as to whether PAYG bridges the "last mile" electrification gap. |
| Keywords: | Risk Electricity access, Africa, Household Saving |
| JEL: | D14 L14 N47 Q42 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:cec:wpaper:2006&r=all |
| By: | Cecilia Bellora; Lionel Fontagné (CES - Centre d'économie de la Sorbonne - CNRS - Centre National de la Recherche Scientifique - UP1 - Université Panthéon-Sorbonne) |
| Abstract: | The new European Commission has announced policies to reduce greenhouse gas emissions drastically. Reaching an ambitious target for a global good – the climate – would require a common price for carbon worldwide. This however clashes with the free-riding problem. Furthermore, unilateral policies are not efficient since they lead to carbon leakages and distort competitiveness. To tackle these issues, the European Union can rely on different policies. Firstly, a carbon pricing of imports can combined with an export rebate to constitute a ‘complete CBA' (Carbon Border Adjustment) solution. Alternatively, a simple tariff at the border can compensate for differences in carbon prices between domestic and imported products. A consumption-based carbon taxation can al so be contemplated. Last, a uniform tariff on imports from countries not imposing (equivalent) carbon policies may help solving the free-riding problem. |
| Keywords: | Carbon Border Adjustment,Climate Change,International Trade,Tariffs |
| Date: | 2020–04–14 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02880332&r=all |