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on Regulation |
| By: | Nicolas Curien |
| Abstract: | Network neutrality is often mistakenly assimilated with the non-discrimination of Internet usage. Although this rough view is acceptable at first sight, as far as blocking of content or clearly anti-competitive discrimination are concerned, it becomes confusing at second sight, when the efficiency of traffic management, on the supply side, or the differentiation of consumers’ requests, on the demand side, are considered. A neutrality principle ignoring traffic efficiency and demand differentiation through enforcing a strict homogeneity in the treatment of data packets on the network would prove inappropriate as it would downgrade the quality of service while not meeting consumers’ needs.In order to clarify the on-going debates, an unambiguous and formal definition of the concept of neutrality is required. In this contribution, a tentative definition is proposed, based on the economic principle of efficiency. Perfect neutrality is first shown as being efficient, i.e. welfare maximizing, in an ideal context C*. Then, by definition, the efficient network design in some real context C distinct from C* is called “C-imperfect neutralityâ€. Depending on the specification of context C, neutrality may involve some form of efficient discrimination and becomes a flexible concept as it translates into different settings in various technological or political environments and as it may change overtime in a given environment.This approach of “the most efficient imperfection†provides an adequate framework to discuss the main net neutrality issues presently at stake in the North-American and European scenes. Among those, we shall emphasize traffic management, segmentation of demand, funding of the next generation access networks, interference of governmental policies with networks’ operations, regulation of neutrality. |
| Keywords: | Net-neutrality, internet policy, economic efficiency, imperfect competition, regulation |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2013/22&r=reg |
| By: | Heymi Bahar; Jehan Sauvage |
| Abstract: | The uptake of renewable energy (RE) has been identified by a number of governments as a primary means for mitigating CO2 emissions from the electricity sector, and for making the transition to a low-carbon economy. The electric power output of some RE technologies, however, including those based on intermittent wind and solar energy, can vary considerably over short periods of time and thereby introduce instability into the electricity system. The risk of instability increases with higher shares of intermittent power sources connected to the electrical grid. Different means have been used to deal with this intermittency problem. Cross-border trade in electricity appears to be one of them since it enables countries to gain access to a more diversified portfolio of plants, producing over a wider geographic area. Preliminary results from an examination of the European electricity market confirm the importance of cross-border electricity trade in increasing the effective capacity factor of intermittent plants in the context of a growing share of intermittent renewables in the power sector. There are a number of policy issues that must first be addressed though, with some financial and administrative incentives provided to variable RE technologies discouraging RE producers from fully participating in electricity market operations and exerting downward pressure on wholesale electricity prices. The positive contribution that cross-border trade in electricity can make to address the variability problem not only depends on addressing challenges that renewable-energy technologies pose to electricity markets, but also necessitates the existence of an efficient cross-border electricity trading regime. Addressing those regulatory and administrative measures that are inhibiting growth in cross-border trade and the smooth operation of regional electricity markets would therefore help increase the potential for trade in electricity to facilitate growth in renewable energy. |
| Keywords: | trade, environment, trade barriers, renewable energy, electricity markets |
| JEL: | F18 L94 L98 Q42 Q56 |
| Date: | 2013–04–08 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaaa:2013/2-en&r=reg |
| By: | Aoki, Reiko; Hamada, Koichi |
| Abstract: | We study the role of liability rules in the case of nuclear accidents by the Tokyo Electric Power Company (TEPCO), such as the accident after the East Kanto Earthquake in Japan. We re-examine the claim that the absolute or unlimited liability is the best under actual situations. For example, TEPCO is a vertically integrated monopoly power company in the Kanto region. We show that monopolist may produce more than socially optimal level of output and spend too little to prevent an accident with limited liability if cost of accident avoidance is variable cost. When there is under production by the monopoly, then increasing liability will aggravate monopoly distortion and reduce welfare. We show that welfare increases with size of liability when cost of accident avoidance is fixed cost. We also consider possibility of regulatory capture by TEPCO and implications. |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:hit:cisdps:600&r=reg |
| By: | Aad Correljé; Martijn Groenleer; Jasper Veldman |
| Abstract: | This paper compares the development of the institutions for regulation of the natural gas transportation systems in the United States and the European Union. Given the fact that these systems are technically similar, it addresses the question why regulatory institutions in the US and the EU have developed in such different ways. To explore institutional change and the differences thereof (in terms of for instance the role of federal and supranational actors, coordination between public and private actors and co-existence of different executive orders), we adopt a historical and dynamic approach in which institutional outcomes are explained not only by the structural conditions but also by the behaviour of the different actors involved. Our exploration is based on a systematic search of the literature on the US and EU regulation of the natural gas transportation systems since their early beginnings. The paper serves as a prelude to more in-depth research on the development of regulatory institutions in the gas sector and notably the political struggles involved in that development. |
| Keywords: | European Union, history, institutional change, natural gas, politics, regulation, United States. |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2013/07&r=reg |
| By: | Stephen Lecourt; Clément Pallière; Oliver Sartor |
| Abstract: | From Phase 3 (2013-20) of the European Union Emissions Trading Scheme carbon-intensive industrial emitters will receive free allocations based on harmonised, EU-wide benchmarks. This paper analyses and evaluates the impacts of these new rules on allocations to key energy-intensive sectors. It exploits an original dataset that combines recent data from the National Implementing Measures of 20 Member States with the Community Independent Transaction Log and ETS-installation NACE code data. The analysis reveals that free allocations to benchmarked sectors will be reduced significantly, though not excessively, in Phase 3. This reduction should both increase public revenues from carbon auctions and has the potential to enhance the economic efficiency of the carbon market. The analysis also shows that changes in allocation vary mostly across installations within, rather than across, countries. Lastly, the analysis finds evidence that the new rules will, as intended, reward installations with better emissions performance, and will improve harmonisation of free allocations in the EU ETS by reducing differences in allocation levels across countries with similar carbon intensities of production. |
| Keywords: | European Union Emissions Trading Scheme (EU ETS), CO2 allowance allocation, Emissions-performance benchmarking |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2013/17&r=reg |
| By: | Vincent Rious; Yannick Perez |
| Abstract: | This paper proposes a support mechanism for energy storage devices for island power systems where intermittent renewable generation is rapidly growing. We base our proposal on the maturity level of storage devices (Chen and al., 2009) and on the linear model for the development of innovations (Foxon et al., 2005). We focus on storage technologies that can be technically developed in island power systems and that achieve the technical needs of these systems. We conclude that the horizon when the power storage shall extend to prevent the development of intermittent renewable generation from being thwarted in these systems, a feed-in tariff with a price varying within the time of day must be put in place. |
| Date: | 2012–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2012/70&r=reg |
| By: | Arnaud De La Tour (CERNA - Centre d'économie industrielle - MINES ParisTech - École nationale supérieure des mines de Paris); Matthieu Glachant (CERNA - Centre d'économie industrielle - MINES ParisTech - École nationale supérieure des mines de Paris) |
| Abstract: | Preferential feed-in tariffs (FITs) for solar generated electricity increases the demand for solar photovoltaic systems. They can thus induce price to increase, creating the potential for PV systems producers to collect rents. This paper analyses the interactions between feed-in tariffs, silicon prices and module prices, using weekly price data and FIT values in Germany, Italy, Spain, and France from January 2005 to May 2012. Relying methodologically on the Granger causality tests applied to vector autoregressive models, we show that since the end of the period of silicon shortage in 2009, module price variations cause changes in FITs, and not the reverse. This is good news as it suggests that the regulators have been able to prevent FITs to inflate module prices. |
| Keywords: | solar photovoltaic energy; feed-in tariffs; photovoltaic panel price |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00809449&r=reg |
| By: | Javier Asensio (Universitat Autònoma de Barcelona & IEB); Andrés Gómez-Lobo (University of Chile); Anna Matas (Universitat Autònoma de Barcelona & IEB) |
| Abstract: | Using a panel of 48 provinces for four years we empirically analyze a series of temporary policies aimed at curbing fuel consumption implemented in Spain between March and June 2011. The first policy was a reduction in the speed limit in highways. The second policy was an increase in the biofuel content of fuels used in the transport sector. The third measure was a reduction of 5% in commuting and regional train fares that resulted in two major metropolitan areas reducing their overall fare for public transit. The results indicate that the speed limit reduction in highways reduced gasoline consumption by between 2% and 3%, while an increase in the biofuel content of gasoline increased this consumption. This last result is consistent with experimental evidence that indicates that mileage per liter falls with an increase in the biofuel content in gasolines. As for the reduction in transit fares, we do not find a significant effect for this policy. However, in specifications including the urban transit fare for the major cities in each province the estimated cross-price elasticity of the demand for gasoline -used as a proxy for car use- with respect to the price of transit is within the range reported in the literature. This is important since one of the main efficiency justification for subsidizing public transit rests on the positive value of this parameter and most of the estimates reported in the literature are quite dated. |
| Keywords: | Fuel consumption, cross-elasticities, transport policies, biofuel |
| JEL: | Q48 R41 R48 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2013/6/doc2013-9&r=reg |