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on Energy Economics |
| By: | Davi-Arderius, D.; Jamasb, T.; Rosellon, J. |
| Abstract: | The 2022 energy crisis highlighted the dependence of Europe electricity sector on imported gas and the need to accelerate the connection of renewables to the power system. However, the allocation of generation and demand in electricity markets is not always technically viable and, where needed, system operators must activate or curtail specific generators not cleared in the day-ahead markets to ensure system reliability. This is a well-known operational, but under-researched, issue related to high integration of renewables. In Spain, most activated units are combined cycle or coal, while an equivalent volume of scheduled renewables (wind) must be curtailed to balance generation and consumption. Most of these actions are not used to alleviate congestion or grid bottlenecks, but to ensure system stability which highlights new challenges, but little empirically analyzed, in efficient integration of renewables. These actions impact on social welfare since all customers bear the costs of these actions, resulting in additional gas imports and CO2 emissions. We estimate how these actions could evolve under different scenarios. We find that additional renewables have increased the costs and CO2 emissions related to network operational needs. Moreover, the installation of small generation behind the meter might become a regressive policy since all customers will bear the additional operational costs. Finally, higher electricity consumption decreases the costs of solving operational needs, which highlights another social welfare benefit associated with the electrification of demand. Until the renewable or storage technologies evolve further, conventional generators (coal, combined cycle or nuclear) are needed for safe operation of systems with high rate of renewables, and countries need to assess when they disconnect them from the network. |
| Keywords: | Renewables, decarbonization, generation mix, redispatching, renewable curtailment, synchronous generators, day-ahead market, network constraints, gas crisis, system operator, smart grids, digitalization |
| JEL: | L51 L94 Q41 Q42 |
| Date: | 2024–05–02 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2421&r= |
| By: | Valentin Laprie |
| Abstract: | Low-carbon technical change in the building sector is a promising solution to address the challenges of climate change, energy security, and public health. We aim to investigate the effects of various environmental policies on low-carbon innovation in the building sector where strong investment barriers transpire, focusing on France as a case study. Pollution taxes, subsidies, standards, which induce more low-carbon innovation? Using a quality index for patents and a Polynomial Distributed Lag Model, our results suggest a limited impact of a carbon tax on promoting low-carbon innovation within the building sector in France. Moreover, our findings indicate that subsidies targeting less polluting technologies emerge as a primary driver of qualitative innovation. Additionally, our study reveals that energy standards for buildings exert a significant albeit temporary influence on the number of patents in relevant technological domains. |
| Keywords: | Environmental Policy, Technical Change, Patents, Energy Efficiency, Buildings |
| JEL: | O33 O34 O38 Q54 Q55 Q58 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2024-17&r= |
| By: | Aline Mortha (Waseda University); Toshi H. Arimura (Waseda University) |
| Abstract: | Partial energy taxation, such as fuel or electricity taxes, is gaining momentum in recent years, but such taxes may result in additional demand for non-taxed, substitute energy goods. In this research, we analyze the effect of the Japanese renewable levy, a prime example of implicit carbon pricing, introduced in 2012. Using data on Japanese plants between April 2004 to March 2020, we utilize the existence of a partial exemption scheme from the tax, and instruments for identification. Our results show that the levy had undesirable consequences, as it is associated with a rebound in emissions for certain sectors where electricity and fuels are substitute (iron & steel, +52%; pulp &paper, +13%). This rebound is explained by a greater share of electricity generated onsite, powered by fossil fuel. We show that the levy provided an incentive for plants to switch from clean (gas) to dirty (coal, oil) fuels. While the tax is generally correlated with gains in electricity and energy efficiency, these efforts are not enough to offset there bound in emissions. Our results shed light on the effect of partial energy taxation on the manufacturing industry, and suggest the need for explicit and complete forms of carbon pricing. |
| Keywords: | Implicit Carbon Pricing; Renewable levy; Energy-intensive industry; Interfuel substitution |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:wap:wpaper:2404&r= |
| By: | Barbara Frey |
| Abstract: | The Western Balkan (WB) countries, with the exception of Albania, generate most of their energy from lignite, which contributes to the highest levels of air pollution in Europe. Energy shortages and high electricity costs are major issues in the WB region, with significant political implications. The region’s reliance on coal does not comply with the EU acquis or the Paris Agreement, leading to potential delays in EU accession negotiations. The transition to renewable energy sources also faces many legislative and political obstacles. It is consequently imperative that the current energy systems be transformed. In order to facilitate private-sector investment and an efficient, cost-effective energy supply, this shift will require regional collaboration in the production, transfer and supply of energy as well as the quick and resolute adoption of renewable energy sources. To increase renewable energy use, WB governments need to increase related public spending, ensure that a reliable regulatory framework is in place, modernise energy infrastructure and pursue energy-efficiency measures. International partners should adjust their approach to the region, providing much more financial support and helping to streamline energy policies based on local needs. By sharing its experience with all these issues, Austria could become a key partner of the Western Balkan countries on their path towards achieving an environmentally sustainable energy future. |
| Keywords: | Western Balkans, Energy Transition, Renewable Energy Sources, Energy Infrastructure Modernisation, Energy Efficiency |
| JEL: | Q41 Q48 Q58 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:wii:pnotes:pn:76&r= |
| By: | International Monetary Fund |
| Abstract: | Kazakhstan is vulnerable to transition risk due to the importance of its energy- and emissions-intensive sectors. Domestic and global climate policies would negatively affect Kazakhstan’s economy, its firms, industries, and banks, with heterogenous impacts across industries and banks. Using both micro and macro modeling approaches, the climate risk analysis suggests Kazakhstani banks are exposed to significant transition risk from domestic and, more importantly, global climate policies. The risk is especially higher for carbon intensive sectors, such as fossil fuel extraction, refining, and electricity generation. Banks with large exposure to emissions-intensive sectors experience up to 30 percent additional losses under a disorderly 1.5°C scenario over a 5-to-7-year horizon, compared to the baseline. Banks with a small share of portfolio with emissions-intensives sectors may still experience losses, as climate change mitigation actions affect the economy at large and the financial health of individual consumers, businesses, and industries. |
| Date: | 2024–04–24 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:2024/096&r= |
| By: | Michał Gradzewicz (Narodowy Bank Polski); Janusz Jabłonowski (Narodowy Bank Polski); Michał Sasiela (Narodowy Bank Polski); Zbigniew Żółkiewski (Narodowy Bank Polski) |
| Abstract: | The aim of this paper is to assess the impact on the Polish economy of energy price shocks arising after the Russian invasion of Ukraine. We computed both the impact of the energy shocks (separately for gas, oil and coal prices) on the real side of the economy, and the pass-through of energy prices to the overall price level. The former part of the analysis was simulated using a computable general equilibrium (CGE) model of the Polish economy while the price effects of the shocks were simulated using a dual Leontief price model. Additionally, the price model was augmented with the mechanism of nominal wage adjustment suggested by the theory. This methodological novelty is our original contribution to empirical economics. Our simulations indicate that the price shock for all energy goods of the magnitude observed in 2022 resulted in a decrease in GDP of about 2.9% relative to the baseline solution. Moreover, we document a strong pro-inflationary effect of rising energy prices. After a combined shock to energy prices the consumption deflator increases by 10.3% (when we include the spreading the price increases across the industries), but the effect is simulated at 15.4%, when we account for an additional nominal wage adjustments (ensuring no real wage changes). We show that due to the differences in forward and backward propagation of shocks, the oil price shock had the strongest impact on real aggregates, whereas prices were hit the strongest by the gas price shock. |
| Keywords: | CGE, dual Leontief model, energy shocks, price pass-through |
| JEL: | C67 C68 D58 E16 E17 E31 Q43 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:nbp:nbpmis:369&r= |
| By: | Otaviano Canuto; Miguel Vazquez |
| Abstract: | Low-carbon hydrogen is a potential contributor to the goals defined in the Paris Agreement, i.e. limiting the increase in the global average temperature to 1.5°C above pre-industrial levels. The transformation of hydrogen production is a part of this effort, as current production methods in the hydrogen industry are carbon-intensive. To achieve net-zero scenarios, hydrogen production and consumption will need to change. |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:ocp:ppaper:pb09-24&r= |
| By: | Nilsson, Peter (Institute for International Economic Studies & Linnaeus University); Tarduno, Matthew (University of Illinois at Chicago); Tebbe, Sebastian (School of Global Policy and Strategy, University of California San Diego) |
| Abstract: | We provide a framework for setting congestion charges that reflect emission and congestion externalities and policy responses, such as vehicle ownership, driving, and residential sorting. Using Swedish administrative microdata, we identify these responses by exploiting a temporary exemption for alternative fuel vehicles and variation in individuals’ exposure to congestion charges. We find that commuters respond by adopting exempted alternative fuel vehicles, shifting trips away from fossil fuel toward alternative fuel vehicles, and changing where they live and work. We combine the estimated responses with the framework to recover an optimal congestion charge of €9.46 per crossing in Stockholm. |
| Keywords: | congestion pricing; |
| JEL: | R41 R48 |
| Date: | 2024–04–22 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:vxesta:2024_007&r= |
| By: | Jessica Coria; Jūratė Jaraitė |
| Abstract: | This study examines how the impact of Tradable Green Certificates (TGC) on profitability and investment behavior varies depending on the vertical integration status of regulated firms. Our theoretical model predicts that vertical integration does not lead to higher profits when internal pricing aligns with market values for green certificates. However, it stimulates greater investment in renewable electric capacity since it reduces the costs of the sourced certificates. Empirical analysis of the Swedish TGC system confirms these findings, revealing that vertically integrated firms did not experience profit increases. Instead, they exhibited distinct investment patterns, prioritizing cost-effective technologies like hydro and thermal capacity over more expensive renewables, in contrast to non-integrated firms. |
| Keywords: | renewable energy, tradable green certificates, vertical integration, firm-level data, causal effects, profits, investments, Sweden |
| JEL: | L10 L50 Q58 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_11079&r= |
| By: | Mishra, Mukesh Kumar |
| Abstract: | India's goal of net-zero emissions by 2070 is a significant step towards addressing climate change. Green financing, a practice directing financial resources from sectors like banking, micro-credit, insurance, and investment towards projects with positive environmental and social impacts, is crucial for achieving this goal. It aligns financial flows with environmental protection, social well-being, and long-term sustainability. SEBI's efforts on green bond principles support environmentally friendly projects, mitigating climate change, and promoting social well-being. Collaboration between governments, financial institutions, investors, businesses, and civil society is essential for driving positive change. |
| Keywords: | Green Finance, Environmental Economics |
| JEL: | Q56 Q58 G23 G28 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:294878&r= |
| By: | João Bento (University of Aveiro) |
| Abstract: | This study aims to examine the direct effects of foreign direct investment (FDI) on the host-country environment. More specifically, how FDI moderates the relationship between democratic institutions and anthropogenic carbon dioxide emissions in a panel of 80 democratic nations during the period 1992-2018. The author uses the System Generalized Method of Moments, first difference and system estimators, which allows for the control for present reverse causality and endogeneity in the research design. For robustness checks, I use the cross-sectional dependence and Driscoll-Kraay robust errors panel regression method. Robust evidence is found in support of the pollution halo hypothesis, in a way that carbon dioxide emissions fall. The findings suggest that FDI moderates the relationship between several varieties of democratic institutions and carbon dioxide emissions. |
| Keywords: | FDI, Environmental impact, Anthropogenic emissions, Democratic institutions, Pollution halo, STRIPAT, GMM, Fixed effects |
| JEL: | Q01 Q58 Q56 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iefpro:14115811&r= |
| By: | Li, Zehang; Elías, Antonio; Morales, Juan M. |
| Abstract: | Gathering knowledge of supply curves in electricity markets is critical to both energy producers and regulators. Indeed, power producers strategically plan their generation of electricity considering various scenarios to maximize profit, leveraging the characteristics of these curves. For their part, regulators need to forecast the supply curves to monitor the market’s performance and identify market distortions. However, the prevailing approaches in the technical literature for analyzing, clustering, and predicting these curves are based on structural assumptions that electricity supply curves do not satisfy in practice, namely, boundedness and smoothness. Furthermore, any attempt to satisfactorily cluster the supply curves observed in a market must take into account the market’s specific features. Against this background, this article introduces a hierarchical clustering method based on a novel weighted-distance that is specially tailored to non bounded and non-smooth supply curves and embeds information on the price distribution of offers, thus overcoming the drawbacks of conventional clustering techniques. Once the clusters have been obtained, a supervised classification procedure is used to characterize them as a function of relevant market variables. Additionally, the proposed distance is used in a learning procedure by which explanatory information is exploited to forecast the supply curves in a day-ahead electricity market. This procedure combines the idea of nearest neighbors with a machine-learning method. The prediction performance of our proposal is extensively evaluated and compared against two nearest-neighbor benchmarks and existing competing methods. To this end, supply curves from the markets of Spain, Pennsylvania-New Jersey-Maryland (PJM), and West Australia are considered. |
| Keywords: | Clustering; Forecasting; Supply curve; Electricity market |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:cte:wsrepe:43805&r= |
| By: | Boingotlo Gasealahwe; Konstantin Makrelov; Shanthessa Ragavaloo |
| Abstract: | South Africa has a high carbon intensity and a very low effective carbon price. This exposes the country to adverse economic shocks from carbon border adjustment mechanisms (CBAM) and changing consumer sentiments. Current impact assessments of the European Unions CBAM suggest small initial impacts, but these are likely to increase as (1) more goods and services become subject to the adjustment, (2) more countries implement such mechanisms, and (3) consumer choices shift away from carbon- intensive products. South Africa needs a higher, more predictable, and effective carbon price to drive the green transition and avoid revenue leakage. The additional government revenues can promote clean investment and reduce some of the negative impacts associated with carbon taxation. Economic and financial frictions to transitioning should be reduced by using a combination of price and non-price instruments. The focus of policy should be on how to position South Africa as a green production destination relative to other countries and consequently, reduce the exposure to CBAMs and changing consumer sentiments. |
| Date: | 2024–04–25 |
| URL: | http://d.repec.org/n?u=RePEc:rbz:oboens:11056&r= |
| By: | Nugroho, Rizqi Ilma; Gnann, Till; Speth, Daniel; Purwanto, Widodo Wahyu; Hanafi, Jessica; Soehodho, Sutanto |
| Abstract: | Battery electric vehicles (BEV) present a promising approach to decarbonizing the transportation sector. This extends beyond electric passenger cars, such as electric motorcycles that hold significant potential in emerging markets with high population density and income disparities. However, providing access to infrastructure remains a challenge in increasing BEV adoption. This research endeavours to determine BEV passenger cars (BEV-PC) and motorcycles (BEV-MC) market diffusion within an emerging market city, focusing on the Greater Jakarta Area, utilizing an Agent-Based Model that considers charging infrastructure availability. Findings indicate that BEV-PC diffusion could attain about 9% of the total vehicle stock by 2030 and almost 75% by 2050 under the Current Policy. Similarly, BEV-MC adoption rates may reach 39% by 2030 and 80% by 2050. Introducing a vehicle purchase subsidy along with full abolishment of fossil fuel subsidies could amplify the diffusion of BEV-PC and BEV-MC to almost triple and double in 2030, respectively. |
| Keywords: | Battery electric vehicles (BEV), BEV passenger cars (BEV-PC), BEV motorcycles (BEV-MC) |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fisisi:294823&r= |
| By: | OECD |
| Abstract: | The consumption of products, services and transportation has significant environmental consequences and account for the majority of global greenhouse gas emissions. Meanwhile, demand-side policy measures have the potential to reduce the environmental footprint of these activities by up to 40-70%. This Policy Paper draws on the OECD’s recent household survey on environmental policy and behavioural change to provide insights and policy recommendations for specific measures that can encourage more sustainable household consumption of energy, transport and food as well as more sustainable waste practices. The report was prepared in support of Japan’s 2023 G7 presidency. |
| Keywords: | Demand-side policy, Energy, Food, Household behaviour, Sustainable consumption, Transport, Waste |
| Date: | 2024–05–17 |
| URL: | http://d.repec.org/n?u=RePEc:oec:envaac:42-en&r= |
| By: | Weihong Qi |
| Abstract: | This study reevaluates the traditional understanding of the "political resource curse" by examining the unique impact of energy transition metals, specifically cobalt, on local-level conflicts in Africa. Contrary to previous studies that primarily focus on high-value minerals and their political outcomes resulted from substantial economic revenues, this study investigates cobalt's influence on local conflict. Despite its strategic importance, cobalt's limited commercial value presents a unique yet critical case for analysis. Different with the prevailing view that links mineral reserves with increased conflict, this research finds that regions rich in cobalt experience a reduction in conflict. This decrease is attributed to enhanced government security measures, which are implemented independently of the economic benefits derived from cobalt as a commodity. The study utilizes a combination of georeferenced data and a difference-in-difference design to analyze the causal relationship between cobalt deposits and regional conflict. The findings suggest that the presence of cobalt deposits leads to enhanced security interventions by governments, effectively reducing the likelihood of non-governmental actors taking control of these territories. This pattern offers a new perspective on the role of energy transition metals in shaping conflict and governance, highlighting the need to reassess theoretical frameworks related to the political implications of natural resources with the ongoing energy revolution. |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2404.17713&r= |
| By: | Balwin Bokor; Wolfgang Seiringer; Klaus Altendorfer; Thomas Felberbauer |
| Abstract: | In response to the escalating need for sustainable manufacturing practices amid fluctuating energy prices, this study introduces a novel dispatching rule that integrates energy price and workload considerations with Material Requirement Planning (MRP) to optimize production logistics and energy costs. The dispatching rule effectively adjusts machine operational states, i.e. turn the machine on or off, based on current energy prices and workload. By developing a stochastic multi-item multi-stage job shop simulation model, this research evaluates the performance of the dispatching rule through a comprehensive full-factorial simulation. Findings indicate a significant enhancement in shop floor decision-making through reduced costs. Moreover, the analysis of the Pareto front reveals trade-offs between minimizing energy and production logistics costs, aiding decision-makers in selecting optimal configurations. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.02445&r= |
| By: | Valdecantos, Sebastián |
| Abstract: | This paper explores the tensions that the transition toward a zero-carbon economy entails for countries relying on natural resources exploitation as the main drivers of (net) exports, as is the case of most South American economies. Given their relatively low diversification and high technology gaps compared to advanced economies, attaining higher prosperity levels driven by sustained economic growth has recurrently been hampered by balance of payments crises. Using a simple long-run demand-led theoretical model with balance of payments constrained growth we show that if the structural limitations in their productive structure are not overcome, the decarbonization of the economy, be it exogenously imposed by the rest of the world or sovereignly decided by each South American country, will be exposed to the dilemma of increasing growth or reducing greenhouse gas emissions. Underpinning this dilemma is the essential role of exports and their associated carbon intensity. Finally, we show that to solve this green transition dilemma, even a process of structural change like the one proposed by the old Latin American structuralist school might not be sufficient - it is only through a "big environmental push" that the long-lastingly desired prosperity of South American countries can cease to be an impossible quest. |
| Keywords: | Transición Energética; Medio Ambiente; Balanza de Pagos; América del Sur; |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:nmp:nuland:4081&r= |
| By: | Ronsiek, Linus (GWS); Schneemann, Christian (Institute for Employment Research (IAB), Nuremberg, Germany); Mönnig, Anke (GWS); Samray, David (BIBB); Schroer, Jan Philipp (BIBB); Schur, Alexander Christian (BIBB); Zenk, Johanna (Institute for Employment Research (IAB), Nuremberg, Germany) |
| Abstract: | "Hydrogen has the potential to contribute to achieving the climate targets. At the same time, it can reduce dependencies on supplier countries for fossil fuels and fossil-based raw materials. As part of the project ‘Labour demand and labour supply along the hydrogen value chain’ funded by the Federal Ministry of Education and Research (BMBF), this research report uses a scenario analysis to describe the impacts of establishing a value chain for green hydrogen on economic output and the labour market in Germany by 2045. The hydrogen value chain includes the production of hydrogen, its use as an energy carrier and raw material, the production of and investment in hydrogen technologies, the development of a hydrogen infrastructure, the further processing of hydrogen into hydrogen derivates such as ammonia or methanol and, last but not least, the education sector for the transfer of hydrogen skills. Based on macroeconomic modelling, a scenario without the development of a hydrogen economy (baseline scenario) and a scenario containing assumptions on the development of a hydrogen economy (alternative scenario ‘Hydrogen Scenario v2.1’) are compared. The alternative scenario is based on the ‘Hydrogen Scenario v2.0’, which was previously published in a BIBB discussion paper. The assumptions of the precedent scenario were updated and extended. The results show that the development of a hydrogen economy will have a positive impact on the price-adjusted gross domestic product by 2035. Additional gross fixed capital formation in construction, machinery and equipment as well as higher household final consumption expenditures boost GDP. From 2036 onwards, the positive stimulus weakens and an overall negative impact on GDP prevails. Higher imports are mainly responsible for this negative impact. Over the entire projection period from 2024 to 2045, GDP is nevertheless 4.1 billion euros higher on average (+0.1 percent per year). The development of a hydrogen economy shows a positive impact on the labour market in terms of employment. Between 2024 and 2045 an average of around 57’000 additional persons are expected to be employed in comparison to the baseline scenario. In absolute terms, the construction sector in particular has a higher demand for labour which is related to the expansion of renewable energies for green hydrogen production and the development of an infrastructure for hydrogen. Positive impacts can also be observed on labour demand in architectural and engineering activities, technical testing and analysis, education as well as in manufacture of machinery and equipment. In the medium term, there will be a lower demand for labour in the manufacture of chemicals and chemical products although this will be relativised in the long term. Deviations by occupational groups show, inter alia, a higher demand in administrative professions as well as in various occupations related to the construction sector. There are already signs of shortages in many of these occupational groups today which can delay the development of a hydrogen economy. The sensitivity analysis illustrates the importance of electricity prices and the entailed costs for hydrogen and hydrogen derivatives on the economic and labour market impact. With an assumption of 20 percent lower electricity prices for electrolysis abroad, German GDP will be on average 7.7 billion euros higher by 2045 and the number of employed persons will be on average around 66’000 higher than in the baseline scenario. With 40 percent lower electricity prices, German GDP will be on average 11.2 billion euros higher by 2045 and the number of employed persons by around 76’000. The lower the costs for hydrogen, the higher the outcome for GDP and employment figures. The crucial point in the scenario comparison is, however, the relative costs of hydrogen and hydrogen derivates to fossil fuels and fossil-based raw materials. Hence, a shift towards alternative energy carriers and raw materials might be also economically beneficial in case of stronger price increases for fossil fuels and fossil-based raw materials. Government measures can contribute to initiate a market-based dynamic in the ecological transition." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | IAB-Open-Access-Publikation |
| Date: | 2024–05–08 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabfob:202407&r= |
| By: | Shuhei Nishitateno and Paul J. Burke |
| Abstract: | In October 2003 four contiguous prefectures in Greater Tokyo introduced Low Emission Zones (LEZs) from which diesel trucks and buses without particulate filters have been banned from entering. This paper analyzes the effects of this large-scale intervention on air quality, new vehicle registrations, and birthweights. We use a matching approach to construct a control group comparable to the designated areas in terms of propensity scores based on municipality characteristics during the pre-intervention period and apply a difference-in-differences design. We find evidence that the intervention led to reductions in hourly particulate matter concentrations and the incidence of low birthweights in the Greater Tokyo LEZ relative to the control group. We also find that the LEZs led to increases in registrations of new trucks and buses. This is not the case for passenger cars, which were exempt from the regulations. Our paper provides the first evidence of a significant link between LEZs and reduced incidence of low birthweights. |
| JEL: | Q53 R48 I18 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:pas:papers:2024-2&r= |
| By: | Boris Chafwehé; Andrea Colciago; Romanos Priftis |
| Abstract: | This paper proposes a New Keynesian multi-sector industry model incorporating firm heterogeneity, entry, and exit dynamics, while considering energy production from both fossil fuels and renewables. We examine the impacts of a sustained fossil fuel price hike on sectoral size, labor productivity, and inflation. Final good sectors are ex-ante heterogeneous in terms of energy intensity in production. For this reason, a higher relative price of fossil resources affects their profitability asymmetrically. Further, it entails a substitution effect that leads to a greener mix of resources in the production of energy. As production costs rise, less efficient firms leave the market, while new entrants must display higher idiosyncratic productivity. While this process enhances average labor productivity, it also results in a lasting decrease in the entry of new firms. A central bank with a strong anti-inflationary stance can circumvent the energy price increase and mitigate its inflationary effects by curbing rising production costs while promoting sectoral reallocation. While this entails a higher impact cost in terms of output and lower average productivity, it leads to a faster recovery in business dynamism in the medium-term. |
| Keywords: | Energy, productivity, firm entry and exit, monetary policy. |
| JEL: | E62 L16 O33 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:mib:wpaper:534&r= |
| By: | Bolz, Simon J.; Naumann, Fabrice; Richter, Philipp M. |
| Abstract: | Expanding on a general equilibrium model of offshoring, we analyze the effects of a unilateral emissions tax increase on the environment, income, and inequality. Heterogeneous firms allocate labor across production tasks and emissions abatement, while only the most productive can benefit from lower labor and/or emissions costs abroad and offshore. We find a non-monotonic effect on global emissions, which decline if the initial difference in emissions taxes is small. For a sufficiently large difference, global emissions rise, implying emissions leakage of more than 100%. The underlying driver is a global technique effect: While the emissions intensity of incumbent non-offshoring firms declines, the cleanest firms start offshoring. Moreover, offshoring firms become dirtier, induced by a reduction in the foreign effective emissions tax in general equilibrium. Implementing a BCA prevents emissions leakage, reduces income inequality in the reforming country, but raises inequality across countries. |
| Keywords: | Offshoring, Emissions leakage, Environmental policy, BCA, Heterogeneous firms, Income inequality |
| JEL: | F18 F12 F15 Q58 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tudcep:294834&r= |
| By: | Sabrina Camélia Pagop; Luc Savard |
| Abstract: | This study conducts an in-depth exploration of the increasing interest in voluntary carbon markets (VCMs) in Africa, shedding light on the potential opportunities and challenges associated with African participation in these markets. VCMs have gained prominence as promising means to address climate change, driven by substantial financial incentives and market expansion. Nonetheless, persistent debates revolve around the legitimacy of carbon credits and their tangible contributions to climate change mitigation and adaptation. |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:ocp:rpaper:pp-0524&r= |
| By: | Balmford, Andrew; Keshav, Srinivasan; Venmans, Frank; Coomes, David; Groom, Ben; Madhavapeddy, Anil; Swinfield, Tom |
| Abstract: | Efforts to avert dangerous climate change by conserving and restoring natural habitats are hampered by concerns over the credibility of methods used to quantify their long-term impacts. Here we develop a flexible framework for estimating the net social benefit of impermanent nature-based interventions that integrates three substantial advances: (1) conceptualizing the permanence of a project’s impact as its additionality over time; (2) risk-averse estimation of the social cost of future reversals of carbon gains; and (3) post-credit monitoring to correct errors in deliberately pessimistic release forecasts. Our framework generates incentives for safeguarding already credited carbon while enabling would-be investors to make like-for-like comparisons of diverse carbon projects. Preliminary analyses suggest nature-derived credits may be competitively priced even after adjusting for impermanence. |
| JEL: | Q50 |
| Date: | 2023–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:120730&r= |
| By: | Renato Molina; Juan Carlos Villaseñor-Derbez; Gavin McDonald; Grant McDermott |
| Abstract: | Maritime transport has been historically susceptible to piracy. While broad assessments suggest the impact of modern piracy causes large economic losses, the literature lacks quantification of the magnitude of the costs and the behavioral responses that underpin them. Here, we combine theory and a unique geospatial dataset combining more than 25 million shipping voyages and thousands of pirate encounters across the globe to find that pirate encounters lead to significant and costly avoidance measures. Shippers modify their path along a route to avoid locations with known pirate encounters. This increases voyage distance and duration, which lead to significant increases in fuel and labor costs estimated to be over US$1.5 billion/year. Additionally, emission of CO2, NOx, and SOx due to increased fuel consumption results in environmental damages valued at US$5.1 billion per year. Together, our results provide the first global estimates linking the presence of pirates to individual behaviour and aggregate transportation cost, as well as its environmental impact, with major implications for the shipping industry and maritime security at a global scale. |
| Keywords: | piracy, shipping, avoidance |
| JEL: | Q50 F50 R40 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_11077&r= |
| By: | Adelia Fatikhova; Fabrizio Fusillo; Sandro Montresor; |
| Abstract: | This work investigates the role of external exchanges of green knowledge on the regional development of new green technological specializations. We extend the recombinant knowledge framework to commodity-embodied knowledge and posit that inter-industry inter-regional flows of commodities, in which new green knowledge gets incorporated, are a channel through which regions can increase their opportunities of specializing in new green technologies and diversify in a more exploratory manner. We further expect these dynamics to be stronger when foreign rather than domestic embodied flows are concerned. By combining the EUREGIO input-output database with patent data, we test our hypotheses on a sample of 237 EU (NUTS2) regions over the period 2000-2019. We measure the regions’ centrality in the network of inter-regional flows of embodied green knowledge (GreenFlowNet) and exploit regional network centrality in a model of related diversification for green technologies. Results show that the centrality of regions in the network is positively associated with green diversification, making this process more exploratory. We also find that the regional ability to acquire new green-techs is mainly associated with the centrality in outward flows of green knowledge towards other regions rather than inward ones. Lastly, we find that regions’ green-tech diversification seems to be enabled (at the extensive margin) primarily by their centrality in the foreign network and accelerated (at the intensive margin) by their centrality in the domestic one. Policy implications are drawn accordingly. |
| Keywords: | green technologies, diversification, relatedness, knowledge networks |
| JEL: | R11 R15 O52 O33 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:2413&r= |
| By: | Patire, Anthony D. PhD; Dion, Francois PhD; Bayen, Alexandre M. PhD |
| Abstract: | This report explores opportunities for employing autonomous driving technology to dampen stop-and-go waves on freeways. If successful, it could reduce fuel consumption and emissions. This technology was tested in an on-road experiment with 100 vehicles over one week. Public stakeholders were engaged to assess the planning effort and feasibility of taking the technology to the next level: a pilot involving 1000+ vehicles over several months. Considerations included the possible geographical boundaries, target fleets of vehicles, and suitable facilities such as bridges or managed lanes. Flow smoothing technology may improve the user experience and operations of managed lanes or bridges, however it may require external incentives such as reduced tolls to entice the traveling public to use it. This must be matched with other goals such as verifying vehicle occupancy. It might be possible for some hybrid solution that addresses both challenges to provide a way forward. A concept of operations needs to be developed specifically for a target road geometry and a California partner. This concept should benefit from lessons learned from previous pilot projects and will need to be defined so as to achieve both (1) a penetration rate sufficient to achieve measurable effects; and (2) sufficient quality and quantity of data to confirm benefits. |
| Keywords: | Engineering, Autonomous vehicles, connected vehicles, traffic flow, advanced traffic management systems, demonstration projects |
| Date: | 2024–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsrrp:qt726964qq&r= |
| By: | Li, Shuo (Faculty of Business and Economics, The University of Hong Kong, Hong Kong, China); Wang, Min (China Center for Economic Research, National School of Development, Peking University, Beijing, China) |
| Abstract: | The paper provides a comprehensive investigation of the effects of environmental regulations on Chinese firms’ extensive margins. Using registration information of all firms in 35 industries from 1991 to 2010, we show that environmental regulations deter firm entry, increase firm exit and reduce the net entry of firms. Specifically, in response to such regulations, large, long-lived and private entrants are less likely to enter the market, and small and long-lived incumbents are more likely to exit. This concentrates the market and expands the state sector in pollution-intensive industries. Moreover, the entrants are more heavily regulated than incumbents. We also find evidence that, in response to environmental regulations, firms in regulated locations are more likely to create new firms in pollution-intensive industries in unregulated areas. However, these spatial spillover effects are negligible, posing little threat to the estimation of environmental regulatory impacts on firm entry in our setting and therefore alleviating the concern of pollution relocation. |
| Keywords: | Environmental Regulation; Firm Entry; Firm Exit; Equity Investment; Spatial Spillover; Inter-city Investment |
| JEL: | L51 O44 Q52 Q58 R38 |
| Date: | 2022–10–12 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunefd:2022_015&r= |
| By: | Tony Addison; Alan R. Roe |
| Abstract: | This paper argues for a change in government attitudes to their extractive industries: as enclaves useful primarily as revenue sources. This is too narrow a perspective: it fails to recognize the broader economic linkages that are invariably possible. Achieving greater economic impact requires governments to redefine how best to encourage economic diversification. |
| Keywords: | Agriculture, Extractive industries, Industrial policy, Mining, Natural gas, Oil, Economic development |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp-2024-28&r= |
| By: | Shujaat Farooq (Pakistan Institute of Development Economics); Durr-e-Nayab (Pakistan Institute of Development Economics); Saddam Hussein (Pakistan Institute of Development Economics); Nabila Kunwal (Pakistan Institute of Development Economics) |
| Abstract: | Pakistan is the world fifth most populous country with more than 230 million population which is growing at a growth rate of 1.7% (World Population Review, 2022). This growing population requires huge quantity of timber to meet the demands for building construction, furniture, panel and ply wood, and pulp and paper on one hand and fuelwood to meet the energy demands of domestic, commercial and industrial sectors on the other hand. In the face of these demands the country’s forest resources are deficient and primarily managed for sustenance of the crucial ecosystem services like watershed protection, biodiversity conservation, climate change mitigation, environmental amelioration, recreation and tourism. Pakistan has only 5% forest area against the international standard of 20-25% which is required to meet economic and environmental demands of a country (MoCC, 2020). |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:pid:kbrief:2024:119&r= |
| By: | Christa Brunnschweiler (Department of Economics, Norwegian University of Science and Technology); Päivi Lujala (Geography Research unit, University of Oulu); Primi Putri (Geography Research unit, University of Oulu); Sabrina Scherzer (Department of Geography, Norwegian University of Science and Technology); Indah Wardhani (Department of Politics and Government, Universitas Gadja Mada, Yogakarta, Indonesia) |
| Abstract: | Transparency in natural resource revenue (NRR) management is crucial in theory to avoid misuse and corruption, but there is little evidence that information reaches citizens and engages them in revenue governance. We collect survey data from Bojonegoro in Indonesia, which has a strong transparency and accountability policy in petroleum revenue governance. We investigate who receives information and what shapes attitudes and behavior regarding NRR management. We find that respondents are poorly informed about NRR management, concerned about the environmental consequences of resource extraction, but have rarely made their voice heard. Their preferred way of being informed about the issue is through fellow citizens or the internet. Our empirical analysis shows that proximity to an extraction site and interest in environmental issues and politics influence attitudes; greater interest in politics and belief in individual citizens’ ability to influence policy also increase the likelihood of self-declared past and future action for better NRR management. Finally, self-declared past – though not intended future – action is linked to receiving information on petroleum management. Engaging intrinsically motivated people in more active resource governance through clear information and pathways for action could eventually make the issue relevant to a wider share of the population. |
| Keywords: | accountability, survey analysis, citizen engagement, petroleum revenues, Indonesia |
| Date: | 2024–04–26 |
| URL: | http://d.repec.org/n?u=RePEc:nst:samfok:20024&r= |
| By: | Ken Tabata (School of Economics, Kwansei Gakuin University) |
| Abstract: | This paper analyses the effects of resource taxation policies aimed at sustainable use of resources on economic growth and consumption inequality using an R&D-based growth model with heterogeneous households. Resource taxes affect the extraction rate of non-renewable resources only if the tax rate changes over time. This paper shows that the lower growth rate of the ad valorem tax on resource use slows resource extraction and promotes economic growth but increases consumption inequality. If resource tax policies are to promote economic growth without increasing consumption inequality, resource tax revenues must be allocated for redistributive purposes. This paper also calibrates the model for quantitative analysis and finds that the lower growth rate of the tax on resource use causes a non-negligible increase in consumption inequality. |
| Keywords: | Non-renewable resources, Endogenous growth, Consumption inequality, R&D |
| JEL: | E62 H23 O30 Q32 Q38 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:kgu:wpaper:272&r= |
| By: | Bertoni, Marcela; Testa, Joaquín |
| Abstract: | En la actualidad, los Objetivos de Desarrollo Sostenible de la Agenda 2030 se constituyen en la hoja de ruta para la acción a nivel global. La falta de claridad operativa y la necesidad de atender a la emergencia ambiental actual demandan reconocer los aspectos relevantes para el estudio de la sostenibilidad y la aplicación de políticas. Por lo tanto, el objetivo de este trabajo es discutir los desafíos de la transición hacia la sostenibilidad abordando el desarrollo sostenible desde su dimensión político institucional y socioeconómica, y plantear los aspectos centrales para resignificar la política y el rol de la ciencias económicas y sociales en torno a los Objetivos de Desarrollo Sostenible (ODS). Para ello, se proponen, como ejes centrales, territorializar los objetivos de desarrollo sostenible, institucionalizar los valores ambientales e integrar el capital natural y el acervo cultural. Entre los principales desafíos se encuentran la articulación política y el reconocimiento del territorio, la participación social e integración de saberes y la generación de marcos de integración para la transición hacia la sostenibilidad. |
| Keywords: | Desarrollo Sostenible; Sostenibilidad; Ciencias Económicas; Ciencias Sociales; |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:nmp:nuland:4089&r= |