|
on Energy Economics |
| By: | Sarangi, Gopal (Asian Development Bank Institute) |
| Abstract: | Offshore wind energy holds promising potential as an alternative source of energy for a country like India, which continues to be land deprived and faces increasing difficulty in acquiring land for energy. While some scholarly efforts have focused on India's context, there is a dearth of studies on the associated environmental and social challenges of such infrastructure deployment. We conduct a detailed assessment of the policy and institutional mechanisms governing the offshore wind energy in the country and identify the possible environmental and social impacts of such projects on the marine environment and livelihood of fishing communities in India. We use qualitative research approaches and various types of secondary information and data. The policy and institutional framework assessment reveals that, despite the creation of the required mechanism, significant gaps exist in the knowledge of such projects’ possible impacts through these policies and regulations. Impact mapping shows that offshore wind projects could adversely affect the marine ecosystem and marine biodiversity to varying degrees over their entire life. The impacts occurring during the construction and operation phases of the project cycle will be significant. Policy suggestions show that preparatory measures are necessary before the implementation of such projects. |
| Keywords: | offshore wind energy; environment; livelihood; India |
| JEL: | E20 O13 O18 Q42 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:1307&r= |
| By: | Jian Chen; Hongli Feng (Center for Agricultural and Rural Development (CARD) at Iowa State University) |
| Abstract: | Chen and Feng examine the development of utility-scale wind and solar energy in Iowa, which is pivotal since utility-scale wind and solar power plants accounted for 95.5% of Iowa's wind and solar power plants under operation as of November 2021. The continued growth in wind and solar energy in Iowa will rely on more utility-scale wind and solar deployment. |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:apr-winter-2022-2&r= |
| By: | Malte Jansen; Philipp Beiter; Iegor Riepin; Felix M\"usgens; Victor Juarez Guajardo-Fajardo; Iain Staffell; Bernard Bulder; Lena Kitzing |
| Abstract: | Offshore wind energy is rapidly expanding, facilitated largely by competitive procurement schemes (such as auctions) run by governments. We provide a detailed quantified overview of these schemes, including geographical spread, volumes, results, and design specifications. Our comprehensive global dataset reveals that procurement schemes are designed heterogeneously. Although most remuneration schemes provide some form of revenue stabilisation, their policy design varies and includes feed-in tariffs, one-sided and two-sided contracts for difference, mandated power purchase agreements, and mandated renewable energy certificates. We review the schemes used in eight jurisdictions across Europe, Asia, and North America and evaluate the bids in their jurisdictional context. We comment on whether bids are reportedly cost competitive, the likeliness of timely construction, whether strategic bidding may have been involved, and other jurisdictional aspects that might have influenced the procurement results. We find that offshore wind energy farms in different jurisdictions and over time are exposed to market price risks to a varying extent, with less mature markets tending toward lower-risk schemes. Our data confirm a coincidence of declining procurement costs and growing diffusion of competitive procurement regimes. |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2202.12548&r= |
| By: | Weichenrieder, Alfons J. |
| Abstract: | This policy letter collects elementary economic statistics and provides a very basic look on Russian public finances (i) to inform the reader's opinion on a possible planning process behind the war against Ukraine and (ii) to discuss prospects of an energy embargo and its capability to affect the stability of the Russian economy. |
| Keywords: | Energy Embargo,Invasion,Public Finance,Russia,Ukraine |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:safepl:96&r= |
| By: | Ming Deng (University of Zurich - Department of Banking and Finance); Markus Leippold (University of Zurich; Swiss Finance Institute); Alexander F. Wagner (University of Zurich - Department of Banking and Finance; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI); Swiss Finance Institute); Qian Wang (University of Zurich - Department of Banking and Finance; Inovest Partners AG) |
| Abstract: | An extraordinary mix of factors affected firm values in early 2022. In the build-up to and in the weeks after the Russian invasion of Ukraine, stocks strongly exposed to the regulatory risks of the transition to a low-carbon economy did well. This was true especially of US stocks. However, in Europe, these stocks tended to underperform after the invasion, arguably because of stronger expected policy responses supporting renewable energy sources in the face of the pronounced dependence of Europe on Russian oil and gas. Investors thus expect the speed of transition to a low-carbon economy to be diverging between the US and Europe. Relating six different Environmental, Social, and Governance (ESG) ratings with stock price performance yields mixed results, suggesting that investors cannot blindly rely on such ratings in general to indicate corporate resilience against crises. Companies which more frequently refer to inflation in their conference calls with analysts performed worse than their peers. Internationally oriented firms did poorly, and investors were particularly concerned regarding companies' exposure to China. Overall, the results offer a preview of the future economic impact of the Russia-Ukraine war. |
| Keywords: | Climate transition risk, energy, ESG, event study, inflation, resilience, Russia-Ukraine war, stock returns |
| JEL: | E3 G14 G01 Q54 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp2229&r= |
| By: | Frondel, Manuel; Schmidt, Christoph M. |
| Abstract: | Mit einem Importanteil von mehr als 50% beruht ein Großteil der deutschen Gasversorgung auf Lieferungen aus Russland. Es würde schwerfallen, diese kurzfristig zu ersetzen, da sowohl die Kapazitäten der LNG-Terminals als auch die Transportkapazitäten des bestehenden Pipelinenetzes begrenzt sind. Überdies wäre die europaweite Konkurrenz um die knappen noch freien Erdgasmengen massiv. Daher sollte nicht vorschnell auf den Import von russischem Gas oder gar auf einen vollständigen Bezug russischer Energieimporte verzichtet werden. Um sich unabhängig von Russland zu machen, sind zunächst erhebliche Anstrengungen auf allen Ebenen nötig, von der Politik bis zu den Unternehmen. Dabei ist es derzeit nahezu unmöglich, belastbare Aussagen über die Größenordnung der damit verbundenen wirtschaftlichen Konsequenzen zu treffen. Drohungen, auf russische Energieimporte zu verzichten, sollten jedenfalls nur unter Berücksichtigung der damit verbundenen erheblichen Risiken für die deutsche Volkswirtschaft ausgesprochen werden. Diese Abwägungen gehen weit über ökonomische Modellrechnungen hinaus. |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwipos:81&r= |
| By: | Vos, Cora; Rösemann, Claus; Haenel, Hans-Dieter; Dämmgen, Ulrich; Döring, Ulrike; Wulf, Sebastian; Eurich-Menden, Brigitte; Freibauer, Annette; Döhler, Helmut; Schreiner, Carsten; Osterburg, Bernhard; Fuß, Roland |
| Abstract: | The report at hand (including a comprehensive annex of data) serves as additional document to the National Inventory Report (NIR) on the German green house gas emissions and the Informative Inventory Report (IIR) on the German emissions of air pollutants (especially ammonia). The report documents the calculation methods used in the German agricultural inventory model Py-GAS-EM as well as input data, emission results and uncertainties of the emission reporting submission 2022 for the years 1990 - 2020. In this context the sector Agriculture comprises the emissions from animal husbandry, the use of agricultural soils and anaerobic digestion of energy crops. As required by the guidelines, emissions from activities preceding agriculture, from the use of energy and from land use change are reported elsewhere in the national inventories. The calculation methods are based in principle on the international guidelines for emission reporting and have been continuingly improved during the past years by the Thünen Institute working group on agricultural emission inventories, partly in cooperation with KTBL. In particular, these improvements concern the calculation of energy requirements, feeding and the N balance of the most important animal categories. In addition, technical measures such as air scrubbing (mitigation of ammonia emissions) and digestion of animal manures (mitigation of emissions of methane and laughing gas) have been taken into account. For the calculation of emissions from anaerobic digestion of animal manures and energy crops (including spreading of the digestate), the aforementioned working group developed, in cooperation with KTBL, a national methodology. [...] |
| Keywords: | emission inventory,agriculture,livestock husbandry,agricultural soils,anaerobic digestion,energy crops,renewable primary products,greenhouse gases,air pollutants,methane,laughing gas,ammonia,particulate matter,Emissionsinventar,Landwirtschaft,Tierhaltung,landwirtschaftliche Böden,anaerobe Vergärung,Energiepflanzen,nachwachsende Rohstoffe,Treibhausgase,Luftschadstoffe,Methan,Lachgas,Ammoniak,luftgetragene Partikel,Staub |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:jhtire:91&r= |
| By: | Thuy Doan (UHERO and Department of Economics, University of Hawai'i at Manoa); Matthias Fripp (UHERO); Michael J. Roberts (UHERO and Department of Economics, University of Hawai'i at Manoa) |
| Abstract: | Interstate natural gas transmission and storage infrastructure is facilitated using regulated, private transactions. Pipeline companies obtain long-term contracts from producers and wholesale purchasers, typically local distribution companies (LDCs). Historically, the Federal Energy Regulatory Commission (FERC) accepted these counterparty contracts as sufficient justification of need. Typically the LDCs are themselves regulated firms, which sometimes possess affiliations with pipeline companies. But with contracted costs largely passed through to retail customers via regulated prices, it is unclear whether contracting parties face sufficient competition or otherwise possess an incentive to find least-cost alternatives. To aid evaluation of past and future investments, we develop a national-level optimization model that can assess the need for new interstate pipeline and storage facilities. The model takes production and demand pathways as fixed and minimizes the infrastructure and operation costs of transport and storage in order to balance supply and demand on each day in each state. Transport of gas can be achieved using pipeline transmission of dry gas, or using truck or ship transport of liquefied natural gas (LNG), and optimal placement of liquefaction and gasification facilities. The model also accounts for international imports and exports of both dry gas and LNG. Three underground drygas storage facilities are considered, as well as LNG storage. We compare the model’s optimized plan with observed outcomes as the sector grew rapidly with hydraulic fracturing. We find that the U.S. has built 38 percent more pipeline and 27 percent more underground storage than necessary, amounting to roughly $179 billion in excess investment. It would have been more economic to expand pipeline far less than observed and instead satisfy critical-peak demands for gas using LNG, plus necessary liquefaction and gasification facilities. Differences between optimized and observed investments vary across the interstate network, while flows between states and into and out of storage bear a close resemblance to observed outcomes. |
| Keywords: | C61, L52, Q49 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:hae:wpaper:2022-2&r= |
| By: | Shao Ying-Hui; Liu Ying-Lin; Yang Yan-Hong |
| Abstract: | The ongoing COVID-19 shocked financial markets globally, including China's crude oil future market, which is the third most traded crude oil futures after WTI and Brent. As China's first crude oil futures accessible to foreign investors, the Shanghai crude oil futures (SC) have attracted significant interest since launch at the Shanghai International Energy Exchange. The impact of COVID-19 on the new crude oil futures is an important issue for investors and policy makers. Therefore this paper studies the short-term influence of COVID-19 pandemic on SC via multifractal analysis. We compare market efficiency of SC before and during the pandemic with the multifractal detrended fluctuation analysis and other commonly-used random walk tests. Then we generate shuffled and surrogate data to investigate the components of multifractal nature in SC. And we examine cross-correlations between SC returns and other financial assets returns as well as SC trading volume changes by the multifractal detrended cross-correlation analysis. The results show that market efficiency of SC and its cross-correlations with other assets increase significantly after the outbreak of COVID-19. Besides that, the sources of its multifractal nature have changed since the pandemic. The findings provide evidence for the short-term impacts of COVID-19 on SC. The results may have important implications for assets allocation, investment strategies and risk monitoring. |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2204.05199&r= |
| By: | Ahmad, Ehtisham |
| Abstract: | COVID-19 has amplified existing imbalances, institutional and financing constraints associated with a development strategy that did not take sufficient account of challenges with emissions, environmental damage and health risks associated with climate change in a number of countries, including China. The recovery from the pandemic can be combined with appropriately designed investments that take into account human, social, natural and physical capital, as well as distributional objectives, that can also address commitments under the Paris agreement. An important criterion for sustainable development is that the tax regimes at the national and sub-national levels should reflect the same criteria as the investment strategy. Own-source revenues, are essential to be able to access private financing, including local government bonds and PPPs in a sustainable manner. Governance criteria are also important including information on the buildup of liabilities at all levels of government, to ensure transparent governance. Despite differences in political systems, the Chinese experiences are relevant in a wide range of emerging market countries as the measures utilize institutions and policies reflecting international best practices, including modern tax administrations for the VAT, and income taxes, and benefit-linked property taxes, as well as utilization of balance sheets information consistent with the IMF’s Government Financial Statistics Manual, 2014. The options have significant implications for policy advice and development cooperation for meeting global climate change goals while ensuring sustainable employment generation with transparency and accountability. |
| Keywords: | environmental policy; human capital; intergovernmental fiscal relations; investment; taxation and subsidies |
| JEL: | R14 J01 F3 G3 |
| Date: | 2021–05–06 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:114565&r= |
| By: | Anushia Chelvarayan (Multimedia University, Jalan Ayer Keroh Lama, 75450, Melaka, Malaysia Author-2-Name: S. Thayalan Sandrasegaran Author-2-Workplace-Name: Multimedia University, Jalan Ayer Keroh Lama, 75450, Melaka, Malaysia Author-3-Name: Yeo Sook Fern Author-3-Workplace-Name: Multimedia University, Jalan Ayer Keroh Lama, 75450, Melaka, Malaysia Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:) |
| Abstract: | "Objective - In recent years, rapid economic growth coupled with overconsumption of products and services contributed to environmental degradation, prompting escalated consumption related environmental concerns. As such, this study aims to explore the factors influencing green purchase behaviour among students in higher learning institutions in Malaysia – a setting where the market is experiencing expansion and changes in consumption patterns. Methodology/Technique - Specifically, this study employs the Theory of Planned Behaviour by integrating relevant variables such as environmental attitude, subjective norm, perceived behavioural control, environmental knowledge and willingness to pay a premium into the model to investigate their effects on green purchase behaviour. This study specifically looks into the green purchasing behaviour among University students in Malaysia. Finding - The research used multiple linear regression analysis to evaluate the online questionnaire gathered from various university students in Malaysia. Overall, the findings indicate that subjective norm and perceived behavioural control have significant relationships with green purchase behaviour, while environmental attitude, willingness to pay a premium and environmental knowledge have insignificant relationships with green purchase behaviour. Novelty - This study concludes with implications for marketers, as well as limitations and suggestions for future research in green consumption. Type of Paper - Empirical" |
| Keywords: | Green Purchase Behaviour, Green Marketing, Green Products and Services, Students |
| JEL: | D23 M3 |
| URL: | http://d.repec.org/n?u=RePEc:gtr:gatrjs:gjbssr602&r= |
| By: | Azhgaliyeva, Dina (Asian Development Bank Institute); Kapsalyamova, Zhanna (Asian Development Bank Institute) |
| Abstract: | Private green finance is imperative for climate change mitigation and adaptation, but the share of private green finance remains small, and the studies that have tackled the efficacy of policy instruments in promoting green finance are limited. Many economies, especially in Asia, have implemented different policies to incentivize the private sector to issue green bonds. However, there is a lack of empirical evidence on the effectiveness of such policies. We provide empirical evidence on the effectiveness of a broad range of green bond policies on the issuance of green bonds. Given the nascent nature of green bonds, we document the effects of several policy instruments supporting green bonds on the private sector’s issuance of green bonds in 58 green-bond-issuing economies, including 11 economies in Asia, over the period January 2010–June 2020. Using the difference-in-difference specification within the multilevel longitudinal model, we find that some green bond policies, such as green bond grants and tax incentives, as well as cooperation and policy signals, are effective in promoting the issuance of green bonds in the private sector in Asia. Regional cooperation and standardization have incentivized private green bond issuance in the European Union but not in the Association of Southeast Asian Nations region. Global cooperation and international standardization have had a positive impact on the issuance of private green bonds. |
| Keywords: | green bonds; green finance; policy support; Asia |
| JEL: | G23 Q28 Q42 Q48 |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:1275&r= |
| By: | Dikau, Simon; Volz, Ulrich |
| Abstract: | Chinese monetary and financial authorities have been among the pioneers in promoting green finance. This article investigates the use of one specific monetary policy tool, namely window guidance, by the Peoples’ Bank of China (PBC) and the China Banking Regulatory Commission (CBRC) to encourage financial institutions to expand credit to sustainable activities and curb lending to heavy-polluting industries. ‘Window guidance’ is a relatively informal policy instrument that uses benevolent compulsion to ‘guide’ financial institutions to extend credit and allocate lending in line with official (government) targets. We investigate window guidance targets for the period 2001–2020 and find that ‘green’ targets were included by the CBRC from at least 2006 and by the PBC from 2007 to discourage lending to carbon-intensive and polluting industries and/or to increase support to sustainable activities. In 2014, both authorities stopped discouraging lending to carbon-intensive/polluting industries through window guidance. Sustainable objectives were subsequently also removed from the PBC's list of window guidance priority sectors at the start of 2019, ending the practice of green window guidance in China. Sustainability-enhancing window guidance targets were replaced and formalized through new ‘Guidelines for Establishing the Green Financial System’, reflecting efforts to move away from controls-based towards market-based policy instruments. Based on this analysis, the article draws four lessons for the design of green finance policies for other countries that seek to enhance sustainable finance and mitigate climate change and related risks. |
| Keywords: | sustainable finance; central banking and financial supervision; China; ES/R009708/1; ES/P005241/1; 71661137002; T&F deal |
| JEL: | G20 |
| Date: | 2021–12–08 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:112725&r= |
| By: | Chuku Chuku (International Monetary Fund); Victor Ajayi (Judge Business School, University of Cambridge, United Kingdom) |
| Abstract: | Discussions about green growth transition in Africa have mostly been silent on quantifying Africa's progress and assessing countries' "green" versus "brown" growth performance. We construct a measure of Africa's green growth performance using an emissionsadjusted production technology framework that jointly accounts for the production of desirable and undesirable outputs over the period 2000-2019. We also identify the important country-level characteristics that drive green productivity growth. The computed green Malmquist-Luenberger productivity indexes penalize countries for the production of "bad" outputs and credit countries for the reduction in emissions and production of "good" outputs. Our main results indicate that Africa's productivity growth is overstated when undesirable outputs are ignored in the measurement of Africa's growth performance. Second, it is technological progress and not efficiency change-i.e., the catch-up effect-that has been the primary source of Africa's green economy transition, implying a reduction in the gap to the technological frontier for most countries. Our analysis of the drivers of green growth shows that high-income levels, tradeembodied R&D, and domestic R&D are the main enablers of green growth, while high energy intensity is the main barrier to green productivity growth. We also find evidence of nonlinearities between income level and green growth performance, consistent with the environmental Kuznets curve hypothesis. The paper ends with far-reaching policy recommendations for accelerating Africa's green growth transition. |
| Keywords: | Green TFP growth, greenhouse gas emissions, Malmquist-Luenberger productivity index, trade-embodied R&D JEL classification: Q54, Q52, Q43, D24 |
| Date: | 2022–03–24 |
| URL: | http://d.repec.org/n?u=RePEc:adb:adbwps:2489&r= |
| By: | Klüh, Ulrich; Urban, Janina |
| Abstract: | What should be the role of the ECB in tackling the socio-ecological challenges related to planetary boundaries, such as climate change and loss of biodiversity? A clear answer to this question is still lacking, in spite of the strategy review of 2021. Regretfully, this review has not received the scrutiny it deserves, as the pandemic and the war in Ukraine have taken center stage. Taking these recent developments into account, we provide a critique of the new strategy. We argue that it lacks transformativity, as it subsumes climate change under the policy objective of price stability, assumes that transformations can be mastered within the structures of the past, and refrains from questioning the current institutional set up. In its main part, the paper discusses the historical relevance of what we believe is the main reason for these deficits: The fear that taking up the real issues (such as independence and accountability) would make the ECB a political football in times of rising inflation. Taking these fears seriously, we show that the institutionalization of central banking has always reflected the transformative dynamics of their time. Consequently, if planetary boundaries represent a transformative challenge, they will radically change the ECB, too. Moreover, we provide evidence that central banks' historical transformations have always reflected their peculiar position as mediators between the financial and the political realm. We argue that, at the current juncture, transforming central banking implies moving away from finance and towards politics. This involves risks. However, we argue that the historical experience offers few reasons to fear a closer integration of central banking into the public sphere, as long as the latter is dominated by democratic politics. Consequently, if one comes to the conclusion that the ECB's current corset is too narrow, it can and should be augmented. While we do not offer a blueprint for such augmentation, we conclude our analysis by sketching elements of a sustainable strategy for a transformative ECB. |
| Keywords: | Monetary Policy,Sustainability,Green Deal,Climate Policy,Central Bank Independence,Central Bank Accountability |
| JEL: | B15 B25 B26 B52 E02 E58 N2 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:znwudp:9&r= |
| By: | Sébastien Houde (Grenoble Ecole de Management, 38000 Grenoble, France. Research affiliate at CEPE, ETH Zurich and Research Fellow at E4S); Wenjun Wang (Agricultural Bank of China) |
| Abstract: | This paper investigates the distributional welfare effects of the recent trade war in the solar manufacturing sector resulting from the U.S. government-initiated trade tariffs against Chinese solar manufacturers. Our structural econometric model incorporates the vertical structure between upstream solar manufacturers and downstream solar installers. Counter-factual simulations show the tariffs had a small positive impact on U.S. manufacturers but a large negative impact on U.S. consumers and installers. Chinese manufacturers were also negatively economically affected. Overall, our results suggest the solar trade war led to large welfare losses in both countries and substantially slowed the adoption of solar photovoltaic technology. |
| Keywords: | Trade War; Solar Industry; Structural Econometric Model; Pass-Through |
| JEL: | F14 L10 Q50 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:22-372&r= |
| By: | Gözlügöl, Alperen A.; Ringe, Wolf-Georg |
| Abstract: | Global consensus is growing on the contribution that corporations and finance must make towards the net-zero transition in line with the Paris Agreement goals. However, most efforts in legislative instruments as well as shareholder or stakeholder initiatives have ultimately focused on public companies: for example, most disclosure obligations result from the given company's status of being listed on a stock exchange. This article argues that such a focus falls short of providing a comprehensive approach to the problem of climate change. In doing so, it examines the contribution of private companies to climate change, the relevance of climate risks for them, as well as the phenomenon of brown-spinning. We show that one cannot afford to ignore private companies in the net-zero transition and climate change adaptation. Yet, private companies lack several disciplining mechanisms available to public companies such as institutional investor engagement, certain corporate governance arrangements, and transparency through regular disclosure obligations. At this stage, only some generic regulatory instruments such as carbon pricing and environmental regulation apply to them. The article closes with a discussion of the main policy implications. Primarily, we propose extending sustainability disclosure requirements to private companies. Sustainability disclosures aim at promoting a transition to a greener economy, rather than (only) protecting investors by addressing information asymmetry. Therefore, these disclosures should encompass private companies that are of relevance for the net-zero transition. Such disclosures can be a powerful tool in shedding light on the polluting private companies that have so far been in the dark as well as serving as a disciplining mechanism. |
| Keywords: | private companies,net zero transition,sustainability disclosures,brown-spinning,climate change,private equity |
| JEL: | G38 K22 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:safewp:342&r= |
| By: | Phoebe Koundouri (Dept. of International and European Economic Studies, Athens University of Economics and Business); Georgios I. Papayiannis (Athens University of Economics & Business); Athanasios Yannacopoulos |
| Abstract: | Optimal sustainable management of natural resources has been one of the major lines of research in environmental economics at least for the last two decades. Several attempts have been made in order to describe in a quantitative fashion the notion of sustainability and distinguish management policies between sustainable and non sustainable ones. Important aspects of this task are (a) appropriate modeling of the spatio-temporal dynamics of the state of the system, including the sources of uncertainty affecting either directly or indirectly the problem at hand (e.g. climate conditions, population growth, biological evolution, etc), and (b) the development of appropriate criteria for evaluating the welfare of the system under study that guarantee sustainability and viability. In this chapter, we present and discuss popular and established optimization approaches for investigating policy selection problems within the sustainability framework, from the perspective of viability and optimal control theory. |
| Keywords: | Model Uncertainty, Optimal Control, Robust Optimal Control, Sustainability, Viability Theory |
| Date: | 2022–04–13 |
| URL: | http://d.repec.org/n?u=RePEc:aue:wpaper:2215&r= |
| By: | Nils K\"orber; Maximilian R\"ohrig; Andreas Ulbig |
| Abstract: | The decarbonization of municipal and district energy systems requires economic and ecologic efficient transformation strategies in a wide spectrum of technical options. Especially under the consideration of multi-energy systems, which connect energy domains such as heat and electricity supply, expansion and operational planning of so-called decentral multi-energy systems (DMES) holds a multiplicity of complexities. This motivates the use of optimization problems, which reach their limitations with regard to computational feasibility in combination with the required level of detail. With an increased focus on DMES implementation, this problem is aggravated since, moving away from the traditional system perspective, a user-centered, market-integrated perspective is assumed. Besides technical concepts it requires the consideration of market regimes, e.g. self-consumption and the broader energy sharing. This highlights the need for DMES optimization models which cover a microeconomic perspective under consideration of detailed technical options and energy regulation, in order to understand mutual technical and socio-economic and -ecologic interactions of energy policies. In this context we present a stakeholder-oriented multi-criteria optimization model for DMES, which addresses technical aspects, as well as market and services coverage towards a real-world implementation. The current work bridges a gap between the required modelling level of detail and computational feasibility of DMES expansion and operation optimization. Model detail is achieved by the application of a hybrid combination of mathematical methods in a nested multi-level decomposition approach, including a Genetic Algorithm, Benders Decomposition and Lagrange Relaxation. This also allows for distributed computation on multi-node high performance computer clusters. |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2204.06545&r= |
| By: | Ning Qi; Lin Cheng; Yuxiang Wan; Yingrui Zhuang; Zeyu Liu |
| Abstract: | Current risk assessment ignores the stochastic nature of energy storage availability itself and thus lead to potential risk during operation. This paper proposes the redefinition of generic energy storage (GES) that is allowed to offer probabilistic reserve. A data-driven unified model with exogenous and endogenous uncertainty (EXU & EDU) description is presented for four typical types of GES. Moreover, risk indices are proposed to assess the impact of overlooking (EXU & EDU) of GES. Comparative results between EXU & EDU are illustrated in distribution system with day-ahead chance-constrained optimization (CCO) and more severe risks are observed for the latter, which indicate that system operator (SO) should adopt novel strategies for EDU uncertainty. |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2203.13991&r= |
| By: | Fabian Scheller; Stefan Wald; Hendrik Kondziella; Philipp Andreas Gunkel; Thomas Bruckner; Dogan Keles |
| Abstract: | Determining the development of Germany's energy system by taking the energy transition objectives into account is the subject of a series of studies. Since their assumptions and results play a significant role in the political energy debate for understanding the role of hydrogen and synthetic energy carriers, a better discussion is needed. This article provides a comparative assessment of published transition pathways for Germany to assess the role and advantages of hydrogen and synthetic energy carriers. Twelve energy studies were selected and 37 scenarios for the years 2030 and 2050 were evaluated. Despite the variations, the two carriers will play an important future role. While their deployment is expected to have only started by 2030 with a mean demand of 91 TWh/a (4% of the final energy demand) in Germany, they will be an essential part by 2050 with a mean demand of 480 TWh/a (24% of the final energy demand). A moderately positive correlation (0.53) between the decarbonisation targets and the share of hydrogen-based carriers in final energy demand underlines the relevance for reaching the climate targets. Additionally, value creation effects of about 5 bn EUR/a in 2030 can be expected for hydrogen-based carriers. By 2050, these effects will increase to almost 16 bn EUR/a. Hydrogen is expected to be mainly produced domestically while synthetic fuels are projected to be mostly imported. Despite of all the advantages, the construction of the facilities is associated with high costs which should be not neglected in the discussion. |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2203.02834&r= |
| By: | Jonathan Berrisch; Micha{\l} Narajewski; Florian Ziel |
| Abstract: | This paper presents a method for estimating high-resolution electricity peak demand given lower resolution data. The technique won a data competition organized by the British distribution network operator Western Power Distribution. The exercise was to estimate the minimum and maximum load values in a single substation in a one-minute resolution as precisely as possible. In contrast, the data was given in half-hourly and hourly resolutions. The winning method combines generalized additive models (GAM) and deep artificial neural networks (DNN) which are popular in load forecasting. We provide an extensive analysis of the prediction models, including the importance of input parameters with a focus on load, weather, and seasonal effects. In addition, we provide a rigorous evaluation study that goes beyond the competition frame to analyze the robustness. The results show that the proposed methods are superior, not only in the single competition month but also in the meaningful evaluation study. |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2203.03342&r= |
| By: | Zuzanna Bazychowska (Gdansk University of Technology, Gdansk, Poland); Aleksandra Parteka (Gdansk University of Technology, Gdansk, Poland) |
| Abstract: | This paper compares two alternative growth paths, assessing the effects on productivity of specialisation in natural resources (NR) and in technologically advanced products. The empirical analysis exploits product-level export data for 109 developing and 51 developed economies over the period 1996-2018. We document two distinct types of specialisation, based on exports either of natural resources or of technological products, and compare their role in productivity growth by GMM estimation of a conditional convergence model. In general, reliance on natural resource exports slows growth, but we find that the type of resources exported is important: fuel exports hamper growth while specialisation in metals enhances the catch-up in productivity. Technological specialisation, especially in products typical of the Fourth Industrial Revolution, reinforces productivity growth but does not affect the relationship between resources and productivity growth. |
| Keywords: | natural resources, technological specialisation, productivity growth, convergence |
| JEL: | O13 O47 O3 Q32 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:gdk:wpaper:68&r= |
| By: | Yongyang Cai (The Ohio State University); William Brock; Anastasios Xepapadeas |
| Abstract: | We compute regional social cost of carbon (SCC) in the face of climate change impact on the rate of growth of regional GDP under cooperation and noncooperation between regions with climate feedbacks and heat transfer present or missing. Climate damage to economic growth poses serious challenges for many countries, particularly in the tropic region. We find that in the presence of climate damage to economic growth, regional SCC is high in either a cooperative world or a noncooperative world, implying that it is optimal for each region to choose stringent climate policies. Moreover, relatively to cooperation, noncooperation reduces GDP of countries in both the high northern latitudes and the tropic region while the loss for the developing countries in the tropic region is significant. Our results are robust with different modeling of the climate impact. |
| Keywords: | Integrated Assessment Model of climate and economy, spatial heat transport, regional social cost of carbon, carbon tax, Nash equilibrium, economic growth, climate feedbacks |
| JEL: | Q54 Q58 |
| Date: | 2022–04–07 |
| URL: | http://d.repec.org/n?u=RePEc:aue:wpaper:2214&r= |
| By: | Yves Jégourel |
| Abstract: | Cela n’est plus à démontrer : la transition environnementale se traduit par une demande accrue pour un certain nombre de minerais et de métaux nécessaires au développement de l’électromobilite´ et à la génération e´lectrique décarbonée permettant de l’alimenter. Le nickel compte parmi ceux-ci. L’essor des batteries lithium-ion crée, en effet, une forte demande pour le sulfate de nickel, alors que l’offre demeure contrainte, pour des raisons d’ordres technologique et économique principalement. Les incertitudes géostratégiques qui l’accompagnent sont également importantes. Depuis l’effondrement des cours observé au premier trimestre 2020, les prix du nickel flambent en conséquence. Comme pour de très nombreux métaux portés par ces vents ascendants, une question s’impose : cette situation sera-t-elle amenée à perdurer ? |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:ocp:ppaper:pb09-22&r= |
| By: | He, Gang; Lin, Jiang; Sifuentes, Froylan; Liu, Xu; Abhyankar, Nikit; Phadke, Amol |
| Abstract: | An amendment to this paper has been published and can be accessed via a link at the top of the paper. |
| Date: | 2020–07–24 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:agrebk:qt11x8b9hc&r= |
| By: | Clemens Fuest; Volker Meier |
| Abstract: | Promoting investment in low carbon “clean” sectors has gained popularity over the last years under the heading of sustainable finance, at the same time raising concerns about adverse welfare effects of such policies. We analyze the economic impact of subsidizing investment in “clean” industries in a stylized two-sector small open economy model. Such a reform increases gross wages, but reduces national income due to the distortion of capital. At given national emissions cap, worldwide emissions rise because imports of the high-carbon good will increase. When adapting the emissions cap, the environmental policy becomes laxer if it is dominated by income effects or by mitigating losses arising from the distortion of the allocation of capital. At the same time, the shrinking high carbon sector reduces income gains from a higher cap and thus works toward a stricter policy. Results are similar if capital in “dirty” industries is taxed. Though sustainable finance policies do seem wasteful, we provide a rationalization in a setting with irreversible investment, where a “green” government” uses such a policy to induce stricter environmental measures after a possible switch to a “conservative” government. |
| Keywords: | climate change, global externalities, sustainable finance, small open economy, political economy |
| JEL: | F41 H23 H87 Q58 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9537&r= |
| By: | Winkler, Hernan |
| Abstract: | This article provides new evidence on the impacts of coal mine closures on local labor markets and the role of mitigation policies. Using data on 285 Polish municipalities from 1995 to 2016, the results show that the employment rates of men falls by 3 and 8 percentage points in the short- and long-term, respectively, in municipalities that experience a mine closure. Mining communes –having greater privileges over revenue collection– receive more intergovernmental transfers and increase their expenditures on family benefits during a coal mine closure. These policies are associated with smaller job losses in the short-term but with a sluggish recovery in the long-term. Given the low levels of labor mobility and wage flexibility that characterize the Polish labor market, the findings are consistent with local fiscal policies cushioning the negative impacts of coal mine closures on the demand for local goods and services in the short-term. In contrast, they may contribute to raise the reservation wage and thereby to slow down employment growth in the long-term. |
| Keywords: | coal, local government, employment |
| JEL: | H72 J23 Q52 Q58 |
| Date: | 2021–07–21 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:112587&r= |
| By: | International Monetary Fund |
| Abstract: | Selected Issues |
| Keywords: | climate mitigation effort; green finance landscape; climate change effect; carbonization effort; staff team of the International Monetary Fund; low-carbon economy; electricity consumption; Climate finance; Climate change; Greenhouse gas emissions; Climate policy; Global |
| Date: | 2022–03–07 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:2022/070&r= |
| By: | Pinto, Ricardo; Henriques, Sofia; Brockway, Paul; Heun, Matthew; Sousa, Tânia |
| Abstract: | In the coming renewables-based energy transition, global electricity consumption is expected to double by 2050, entailing widespread end-use electrification, with significant impacts on energy efficiency. We develop a long-run, worldwide societal exergy analysis focused on electricity to provide energetic insights for this transition. Our 1900-2017 electricity world database contains the energy carriers used in electricity production, final end-uses, and efficiencies. We find world primary-to-final exergy (i.e. conversion) efficiency increased rapidly from 1900 (6%) to 1980 (39%), slowing to 43% in 2017 as power station generation technology matured. Next, despite technological evolution, final-to-useful end-use efficiency was surprisingly constant (~48%), due to “efficiency dilution”, wherein individual end-use efficiency gains are offset by increasing uptake of less efficient end uses. Future electricity efficiency therefore depends on the shares of high efficiency (e.g. electrified transport and industrial heating) and low efficiency (e.g. cooling and low temperature heating) end uses. Our results reveal past efficiency increases (carbon intensity of electricity production reduced from 5.23 kgCO2/kWh in 1900 to 0.49 kgCO2/kWh in 2017) did little to decrease global electricity-based CO2 emissions, which rose 380-fold. The historical slow-pace of transition in generation mix and electric end-uses suggest strong, urgent incentives are needed to meet climate goals. |
| Keywords: | Energy efficiency, electricity, Carbon intensity, decarbonisation, energy history, energy end-uses |
| JEL: | Q40 |
| Date: | 2022–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:112487&r= |
| By: | Jean-Christophe Poudou (MRE - Montpellier Recherche en Economie - UM - Université de Montpellier); Wilfried Sand-Zantman (ESSEC Business School and THEMA (UMR 8184) - Economics Department - Essec Business School - THEMA - Théorie économique, modélisation et applications - CNRS - Centre National de la Recherche Scientifique - CY - CY Cergy Paris Université) |
| Abstract: | We address the need to regulate Internet infrastructure usage to take into account environmental externalities. We model the interactions between a monopoly ISP and different types of content providers in settings where the former chooses the network size and the latter influences congestion on the network. We first show that current net neutrality regulation does not provide agents the right incentives to cope with the environmental externality issue. Then, we study several alternatives, including laissez-faire, price-based regulation, and norm-based regulation. We derive conditions under which these alternatives fare better than net neutrality. In particular, the two types of regulations are useful tools to accommodate consumer interest and environmental concerns. |
| Date: | 2022–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03608708&r= |
| By: | Sinha, Avik (Asian Development Bank Institute); Shah, Muhammad Ibrahim (Asian Development Bank Institute); Mehta, Atul (Asian Development Bank Institute); Sharma, Rajesh (Asian Development Bank Institute) |
| Abstract: | In order to reduce greenhouse gas (GHG) emissions and to achieve the Sustainable Development Goals (SDGs), Asian countries are trying to realize the potential of energy innovation. However, several structural issues might deter the expected impact of energy innovation on GHG emissions. Given the ecologically unsustainable economic growth trajectory of Asian countries, achieving the full potential of energy innovation is necessary, and therefore an efficient development and diffusion of these solutions requires a policy reorientation. Given the present situation of Asian countries in attaining SDG objectives, there is a void in the academic literature in terms of a policy framework, and there lies the contribution of our study. We shed light on how regional integration and social inequality can moderate the desired environmental impact of energy innovation. Based on the outcomes of the study conducted on 24 Asian countries over the period 1990–2019, we recommend a multipronged SDG-oriented policy framework. This policy framework is developed by considering the internal and external structural issues with Asian countries, and, using a phase-wise policy implementation approach, a way to address the objectives of SDGs 7, 9, and 13 is discussed. |
| Keywords: | energy innovation; GHG emissions; Asia; regional integration; social inequality |
| JEL: | Q48 Q53 Q55 Q56 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:1304&r= |
| By: | Oluc, Ihsan; Ben Jebli, Mehdi; Can, Muhlis; Guzel, Ihsan; Brusselaers, Jan |
| Abstract: | There are many economic parameters that may affect environmental degradation. At the forefront of these parameters is the productive economic structures of the countries The present paper discusses the dynamic relationship between carbon dioxide (CO2) emissions, economic growth and productive capacity index (PCI) for a panel of 38 OECD countries spanning the period 2000-2018. The empirical study applied PMG-ARDL approach, panel cointegration techniques and Granger causality tests the examine the short and long-run association between the variables. The cross-sectional dependence test of Pesaran (2004) revealed the use of the second generation panel unit root tests (CADF and CIPS). The cointegration relationships between the variables are proved using Westerlund and Pedroni cointegration tests. The estimated coefficients of PMG-ARDL revealed that the environmental Kuznets curve (EKC) hypothesis is established. Besides, the empirical findings obtained from long-run estimation confirm that productive capacity has a significant role on increasing environmental quality. |
| Keywords: | Product Capacity Index; CO2 Emissions; Economic Complexity; Economic Structure; Environment |
| JEL: | E2 F1 F14 Q5 Q54 Q55 Q57 |
| Date: | 2022–03–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:112590&r= |
| By: | Calel, Raphael; Colmer, Jonathan; Dechezlepretre, Antoine; Glachant, Matthieu |
| Abstract: | We develop and implement a new method for identifying wasted subsidies, and use it to provide systematic evidence on the misallocation of carbon offsets in the Clean Development Mechanism - the world's largest carbon offset program. Using newly constructed data on the locations and characteristics of 1,350 wind farms in India - a context where it was believed, ex-ante, that the Clean Development Mechanism could significantly increase development above baseline projections - we estimate that at least 52% of approved carbon offsets were allocated to projects that would very likely have been built anyway. In addition to wasting scarce resources, we estimate that the sale of these offsets to regulated polluters has substantially increased global carbon dioxide emissions. |
| Keywords: | carbon offset; infra-marginal support; misallocation; investment; subsidies; wind power |
| JEL: | H23 H43 L94 Q42 Q54 |
| Date: | 2021–10–29 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:113849&r= |
| By: | Poortinga, Wouter |
| Abstract: | Understanding environmental choices and behaviour is becoming an increasingly important topic for research. Understanding Society has included questions on environmental attitudes and actions from Wave 1 of the survey and allows researchers to look at environmental choices as part of a wider socioeconomic picture. Thirteen years after the first environmental behaviour module was fielded, ISER would welcome anassessment of how useful Understanding Society is for environmental behaviour and climate change research, and how it could better enable research on the topic. This Working Paper reviews the environmental content in the survey and sets out a proposal for a new module on environmental attitudes. |
| Date: | 2022–04–20 |
| URL: | http://d.repec.org/n?u=RePEc:ese:ukhlsp:2022-03&r= |
| By: | Olukunle O. Owolabi; Kathryn Lawson; Sanhita Sengupta; Yingsi Huang; Lan Wang; Chaopeng Shen; Mila Getmansky Sherman; Deborah A. Sunter |
| Abstract: | Hydroelectric power (hydropower) is unique in that it can function as both a conventional source of electricity and as backup storage (pumped hydroelectric storage) for providing energy in times of high demand on the grid. This study examines the impact of hydropower on system electricity price and price volatility in the region served by the New England Independent System Operator (ISONE) from 2014 - 2020. We perform a robust holistic analysis of the mean and quantile effects, as well as the marginal contributing effects of hydropower in the presence of solar and wind resources. First, the price data is adjusted for deterministic temporal trends, correcting for seasonal, weekend, and diurnal effects that may obscure actual representative trends in the data. Using multiple linear regression and quantile regression, we observe that hydropower contributes to a reduction in the system electricity price and price volatility. While hydropower has a weak impact on decreasing price and volatility at the mean, it has greater impact at extreme quantiles (> 70th percentile). At these higher percentiles, we find that hydropower provides a stabilizing effect on price volatility in the presence of volatile resources such as wind. We conclude with a discussion of the observed relationship between hydropower and system electricity price and volatility. |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2203.02089&r= |
| By: | Chanel, Olivier; Prati, Alberto; Raux, Morgan |
| Abstract: | We provide an estimate of the environmental impact of the recruitment system in the economics profession, known as the "international job market for economists". Each year, most graduating PhDs seeking jobs in academia, government, or companies participate in this job market. The market follows a standardized process, where candidates are pre-screened in a short interview which takes place at an annual meeting in Europe or in the United States. Most interviews are arranged via a non-profit online platform, econjobmarket.org, which kindly agreed to share its anonymized data with us. Using this dataset, we estimate the individual environmental impact of 1,057 candidates and one hundred recruitment committees who attended the EEA and AEA meetings in December 2019 and January 2020. We calculate that this pre-screening system generated the equivalent of about 4,000 tons of avoidable CO2-eq and a comprehensive economic cost over e3.5 million. We contrast this overall assessment against three counterfactual scenarios: a more efficient in-person system, a hybrid system (where videoconference is used for some candidates) and a fully online system (as it happened in 2020-21 due to the COVID-19 pandemic). Overall, the study can offer useful information to shape future recruitment standards in a more sustainable way. |
| Keywords: | job market for economists; international job market; carbon footprint; environmental impact; comprehensive economic cost |
| JEL: | A11 J44 Q51 Q56 |
| Date: | 2021–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:113815&r= |
| By: | Dr. Christian Lutz (GWS - Institute of Economic Structures Research); Dr. Marc Ingo Wolter (GWS - Institute of Economic Structures Research) |
| Abstract: | Das Ziel der Klimaneutralität bis 2045 und die jährlichen Zwischenziele stellen Politik und Gesellschaft vor große Herausforderungen. Welche Anknüpfungspunkte für politisches Handeln gibt es? Welche Instrumente stehen zur Analyse und Evaluation zur Verfügung? Wie kann mit Unsicherheit umgegangen werden? Das Discussion Paper "Wege zur Klimaneutralität bis 2045 – politische Handlungsfelder" gibt einen Überblick und zeigt die Notwendigkeit für einen permanenten Such- und Prüfprozess, um die auch mittel -und langfristig besten Entscheidungen zu finden und zu treffen. |
| Keywords: | Klimaneutralität bis 2045, Climate neutrality by 2045 |
| JEL: | O P |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:gws:dpaper:21-4&r= |
| By: | Kaitila, Ville; Kuusela, Olli-Pekka; Kuusi, Tero; Pohjola, Johanna; Soimakallio, Sampo |
| Abstract: | Abstract We assess the potential impact of the EU carbon border adjustment mechanism (CBAM) based on the European Commission’s proposal presented in 2021. The CBAM products are divided into four categories: cement, fertilizers, iron and steel products, and aluminium products. In terms of production and the value of foreign trade, iron and steel products are by far the largest category, followed by aluminum products. Based on econometric gravity modelling of trade, the impact on EU imports of products covered by the CBAM would be significant. In normal economic conditions, Finland’s extra-EU imports of the products would decrease by a total of around a quarter with the proposed CBAM specifications and current carbon pricing. Based on general equilibrium modelling, the effects of the CBAM would be very small for the Finnish aggregate economy. In Finland and other EU countries, the CBAM would benefit directly or indirectly sectors that manufacture products subject to the mechanism. Other industrial sectors, on the other hand, would suffer slightly from the CBAM. The report assesses implications of different ways to implement the CBAM. |
| Keywords: | Carbon leakage, Carbon border adjustment mechanism, Gravity model, Computable general equilibrium |
| JEL: | Q38 |
| Date: | 2022–04–25 |
| URL: | http://d.repec.org/n?u=RePEc:rif:report:128&r= |
| By: | Robert Huang; Matthew E. Kahn |
| Abstract: | Urban public transit agencies spend billions of dollars each year on workers, durable capital and energy to supply transportation services. During a time of rising concern about climate change, the urban public transit sector has not significantly reduced its carbon footprint. Using data for the nation’s transit agencies over the years 2002 to 2019, we benchmark U.S transit agencies with transit agencies in Germany and the United Kingdom. We study U.S urban public sector energy efficiency trends and explain the cross-sectional variation. We present a new operating profits metric that incorporates each transit agency’s annual total carbon emissions. |
| JEL: | H23 H41 H76 R4 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29900&r= |
| By: | Fabian Braesemann; Max Schuler |
| Abstract: | Putin's Ukraine war has caused gas prices to skyrocket. Because of Europe's dependence on Russian gas supplies, we all pay significantly more for heating, involuntarily helping to fund Russia's war against Ukraine. Based on an analysis of real-time gas price data, we present a calculation that estimates every household's financial contribution for heating paid to Russian gas suppliers daily at current prices - six euros per household and day. We show ways everyone can save energy and help reduce the dependency on Russian gas supply. |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2203.02756&r= |
| By: | Heider, Florian; Inderst, Roman |
| Abstract: | This paper examines optimal enviromental policy when external financing is costly for firms. We introduce emission externalities and industry equilibrium in the Holmström and Tirole (1997) model of corporate finance. While a cap-and-trading system optimally governs both firms' abatement activities (internal emission margin) and industry size (external emission margin) when firms have sufficient internal funds, external financing constraints introduce a wedge between these two objectives. When a sector is financially constrained in the aggregate, the optimal cap is strictly above the Pigouvian benchmark and emission allowances should be allocated below market prices. When a sector is not financially constrained in the aggregate, a cap that is below the Pigiouvian benchmark optimally shifts market share to less polluting firms and, moreover, there should be no "grandfathering" of emission allowances. With financial constraints and heterogeneity across firms or sectors, a uniform policy, such as a single cap-and-trade system, is typically not optimal. |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:safewp:345&r= |
| By: | Gerard Cornelis van der Meijden; Cees A. Withagen; Hassan Benchekroun |
| Abstract: | Inspired by empirical evidence from the oil market, we build a model of an oligopoly facing a fringe as well as competition from renewable resources. We explore different subclasses of HARA utility functions (Cobb-Douglas, power and quadratic utility) to check the robustness of results found in the previous literature. For isoelastic demand, we characterize the equilibrium extraction rates of the fringe and the oligopolists. There always exists a phase of simultaneous supply of the oligopolists and the fringe, implying an inefficient order of use of resources since the oligopolists have smaller unit extraction costs and carbon emissions than the fringe. We calibrate our model to the oil market to quantify this sequence effect. In our benchmark calibration, we find for the three HARA subclasses that the sequence effect is responsible for almost all of the welfare loss compared to the first-best. It becomes smaller as market power decreases. Furthermore, we show that climate damage and Green Paradox effects depend non-monotonically on the degree of market power. |
| Keywords: | oligopoly-fringe, climate policy, non-renewable resource, Herfindahl rule, limit pricing, oligopoly, HARA preferences |
| JEL: | Q31 Q42 Q54 Q58 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9585&r= |
| By: | Bracht, Felix; Verhoeven, Dennis |
| Abstract: | Existing estimates of the economic costs of air pollution do not account for its effect on inventive output. Using two weather phenomena as instruments, we estimate this effect in a sample of 1,288 European regions. A decrease in exposure to small particulate matter of 0.17µg/m3 - the average yearly reduction in Europe - leads to 1.7% more patented inventions. After ruling out reallocation of human capital, inventor mortality and R&D expenditures as drivers of the effect, we conclude that air pollution's harm to economic output increases by at least 10% when accounting for innovation. |
| Keywords: | air pollution; air quality; innovation; patent; productivity |
| JEL: | O30 Q53 O13 |
| Date: | 2021–11–26 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:113818&r= |
| By: | A. Abdulhakeem, Kilishi (Department of Economics) |
| Abstract: | This paper examines how Nigeria arrived at a controversial fuel subsidy, the implications of the subsidy on consumers, oil market, government expenditure and general economic performance. Simple tools of positive economics are used in the analysis. The analysis shows that: (i) complementing domestic shortage with importation despite the country has comparative advantage in fuel production is the initial policy error that put Nigeria into subsidy burden; (ii) there is consumption and welfare gains to consumers with subsidy and its removal negatively affect the two due income and substitution effects; (iii) subsidy creates inefficiency in the market, but its removal without liberalizing the market will generate hardship for consumers; (iv) expansion in domestic supply will lead to fall in price and subsidy will be eliminated naturally; and (v) subsidy constitute fiscal burden, but its removal would lead to better economic situation only if the revenue gain is spent on productive services which is function of level of political rent. |
| Keywords: | Subsidy; consumer; domestic supply; comparative advantage; fiscal burden |
| Date: | 2022–03–25 |
| URL: | http://d.repec.org/n?u=RePEc:ris:decilo:0025&r= |
| By: | Luigi Bonatti; Lorenza Alexandra Lorenzetti |
| Abstract: | We study how public policies affects an economy where production emits pollutants and investment in productive assets raises the economy’s overall productivity. We explore two hypotheses about how the accumulation of pollutants affects human well-being. Under the first one, there is no limit to the possibility for households to defend themselves against environmental degradation by increasing the use of manmade artifacts, while under the second one there is a threshold beyond which the effects of the accumulation of pollutants cannot be offset by devoting more output to this scope. Under both hypotheses, we compare the laissez-faire (LF) to the socially optimal (SO) path. Then, we check whether the latter can be decentralized by using the policy instruments available to the government. Under the first hypothesis, GDP and pollutants grow slower along the SO balanced growth path (BGP) than along the LF BGP, while people’s well-being is greater along the former. Therefore, green policies driving the economy along its OP tend to reduce GDP growth. Under the second hypothesis, LF may lead to a “climate catastrophe” by determining unbounded growth, which—without incentives to invest in green technology—drives the amount of pollutants beyond its maximum compatible with life on earth. |
| Keywords: | endogenous growth, green policies, global warming, externalities, human well being, climate catastrophe, defensive expenditures |
| JEL: | H23 O44 Q54 Q58 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9539&r= |
| By: | Kamiar Mohaddes; Ryan N. C. Ng; M. Hashem Pesaran; Mehdi Raissi; Jui-Chung Yang |
| Abstract: | We investigate the long-term macroeconomic effects of climate change across 48 U.S. states over the period 1963.2016 using a novel econometric strategy which links deviations of temperature and precipitation (weather) from their long-term moving-average historical norms (climate) to various state-specific economic performance indicators at the aggregate and sectoral levels. We show that climate change has a long-lasting adverse impact on real output in various states and economic sectors, and on labour productivity and employment in the United States. Moreover, in contrast to most cross-country results, our within U.S. estimates tend to be asymmetrical with respect to deviations of climate variables (including precipitation) from their historical norms. |
| Keywords: | climate change, economic growth, adaptation, United States |
| JEL: | C33 O40 O44 O51 Q51 Q54 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9542&r= |
| By: | Liu, Xueying (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: | With the increased adoption of solar photovoltaics (PV) and batteries, and the use of electronics and appliances powered by direct current (DC), e.g. heat pumps, and electric vehicles (EVs), DC technologies offer higher energy efficiency compared to the entrenched alternating current (AC) technologies. However, the adoption of DC infrastructure is limited due to path dependency and lock-in effects of the currently dominant electric infrastructure based on AC technology. Efficiency gains in energy communities and for households may facilitate the wider-scale adoption of DC technologies. In this study, we simulate 600 household load profiles based on twelve different representative household types and estimate the possible energy cost savings of a DC architecture compared to an AC architecture under various electricity prices and feed-in-tariff levels. This is done for different combinations of battery and PV sizes, and for the case of a peer-to-peer (P2P) trading community. The results show that the DC home yields cost savings of around €90 p.a. for the median household when compared to an AC home. Moreover, we find that neither the share of DC load nor household characteristics impacts cost savings significantly, while the total load remains the most important factor influencing the cost-saving potential. In addition, while cost savings do not necessarily increase with larger PV and battery sizes, they do increase with the possibility of households to engage in P2P trading. The results yield an improved understanding regarding the cost-saving potentials of DC homes and their expected diffusion in Germany. This is especially relevant for future large-scale adoption of solar PV, batteries, and EVs in the future, thus helping both policy-makers and companies alike to better assess the market potential of DC homes. |
| Keywords: | DC technology; Choice of Technology; Diffusion; Industrial policy; Path dependence |
| JEL: | O14 O25 O33 O52 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:ris:fcnwpa:2021_007&r= |
| By: | Alcantara Mata, Antonio; Ruiz Mora, Carlos |
| Abstract: | In day-ahead electricity markets based on uniform marginal pricing, small variations in the offering and bidding curves may substantially modify the resulting market outcomes. In this work, we deal with the problem of finding the optimal offering curve for a risk-averse profit-maximizing generating company (GENCO) in a data-driven context. In particular, a large GENCO's market share may imply that her offering strategy can alter the marginalprice formation, which can be used to increase profit. We tackle this problem from a novel perspective. First, we propose a optimization-based methodology to summarize each GENCO's step-wise supply curves into a subset of representative price-energy blocks. Then, the relationship between the market price and the resulting energy block offering prices is modeled through a Bayesian linear regression approach, which also allows us to generate stochastic scenarios for the sensibility of the market towards the GENCO strategy, represented by the regression coefficient probabilistic distributions. Finally, this predictive model is embedded in the stochastic optimization model by employing a constraint learning approach. Results show how allowing the GENCO to deviate from her true marginal costs renders significant changes in her profits and the market marginal price. Furthermore,these results have also been tested in an out-of-sample validation setting, showing how this optimal offering strategy is also effective in a real-world market contest. |
| Keywords: | Stochastic Programming; Constraint Learning; Data-Driven Optimization; Electricity Market; Optimal Pricing Strategy |
| Date: | 2022–04–22 |
| URL: | http://d.repec.org/n?u=RePEc:cte:wsrepe:34605&r= |
| By: | Marie-Laure Cabon-Dhersin (LERN - Laboratoire d'Economie Rouen Normandie - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université - IRIHS - Institut de Recherche Interdisciplinaire Homme et Société - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université); Natacha Raffin (LERN - Laboratoire d'Economie Rouen Normandie - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université - IRIHS - Institut de Recherche Interdisciplinaire Homme et Société - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université) |
| Abstract: | This article compares taxes and standards as environmental policies in a duopoly model where production generates pollution. To lower their emissions, firms invest in upstream green R&D (in the presence of technological spillovers) either cooperatively or non-cooperatively, and then compete in quantities. The outcomes of the two policies are identical when firms do not cooperate in R&D; R&D cooperation under taxes always improves social welfare by increasing abatement efforts and increasing consumer surplus. Conversely, R&D cooperation under standards pushes firms to reduce production, which is harmful for consumers but better for the environment. |
| Keywords: | R&D Cooperation,Spillovers,taxes,standards,Cournot competition. Code JEL: L13,032,P48,Q55 |
| Date: | 2022–03–16 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03610541&r= |
| By: | CANFORA Paolo (European Commission - JRC); ARRANZ PADILLA Maria (European Commission - JRC); POLIDORI Olivier; PICKARD GARCIA Nicolas (European Commission - JRC); OSTOJIC Suzana; DRI Marco |
| Abstract: | The European Union has introduced a new policy tool to define which investments can be considered environmentally sustainable: a taxonomy of environmentally sustainable economic activities (“the EU Taxonomy”). Regulation (EU) 2020/852 of the European Parliament and the Council (the ‘Taxonomy Regulation’), establishes the framework for its development and use. It empowers the European Commission to define the actual taxonomy, i.e. the list of economic activities and associated technical screening criteria setting out the required level of environmental performance. This list of economic activities and the accompanying technical screening criteria will be adopted in delegated acts. This report is an input to the work of developing technical screening criteria for activities substantially contributing to four remaining environmental objectives defined in the Taxonomy Regulation. It proposes a methodological framework and a step-by-step process to draft criteria for economic activities substantially contributing to an objective: from the identification of the type of substantial contribution the economic activity can make, the selection of the most suitable approach to draft the technical screening criteria and the setting of the level of ambition expected to consider that contribution substantial. The report then explores how the conceptual framework can be applied in practice for each of the four environmental objectives considered. |
| Keywords: | Sustainable finance, EU taxonomy, sustainable economy activities, substantial contribution, sustainable use and protection of water and marine resources, transition to a circular economy, pollution prevention and control, Protection and restoration of biodiversity and ecosystems, Platform on Sustainable Finance, Technical Working Group |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc126045&r= |