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on Regulation |
| By: | Oskar Lecuyer (OCCR,University of Bern); Philippe Quirion (CNRS, CIRED) |
| Abstract: | We study the interactions between a CO2 emissions trading system (ETS) and renewable energy subsidies under uncertainty over electricity demand and energy costs. We first provide evidence that uncertainty has generated over-allocation (defined as an emissions cap above business-as-usual emissions) during at least part of the history of most ETSs in the world. We then develop an analytical model and a numerical model applied to the European Union electricity market in which renewable energy subsidies are justified only by CO2 abatement. We show that in this context, when uncertainty is small, renewable energy subsidies are not justified, but when it is big enough, these subsidies increase expected welfare because they provide CO2 abatement even in the case of over-allocation. The source of uncertainty is important when comparing the various types of renewable energy subsidies. Under uncertainty over electricity demand, renewable energy costs or gas prices, a feed-in tariff brings higher expected welfare than a feed-in premium because it provides a higher subsidy when it is actually needed i.e. when the electricity price is low. Under uncertainty over coal prices, the opposite result holds true. These results shed new light on the ongoing switch from feed-in tariffs to feed-in premiums in Europe. |
| Keywords: | Willingness to pay, Social capital, Environmental protection, Ordered logistic regression, Sweden |
| JEL: | Q28 Q48 Q58 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:fae:ppaper:2016.03&r=reg |
| By: | Wang, Lu; Favero, Alice; Brown, Marilyn |
| Abstract: | This study used the GT NEMS model to analyze how the proposed federal regulation on carbon emissions will impact investments in the U.S. electricity generating capacity at the federal and Census Division level for 2016-2030. Results show that in order to reduce emissions by 32% by 2030, cumulative investments will increase from 399 to 414 billion USD by 2030. Under the scenario which addresses carbon leakage - covering new and existing power plants - cumulative investment will reach 475 billion USD by 2030. Addressing carbon leakage will affect not only the size of the investments but also the direction: when only existing power plants are covered investments in natural gas remains almost unchanged (123 billion USD) relative to the Reference case; while under the scenario that covers all power plants, investment in natural gas will be 24% lower and the investments in renewable will be 64% higher than the Reference. Carbon regulation will produce not only losers and winners among energy sources but also among U.S. states. While the South and Midwest states will experience much higher increase in cumulative investments with respect to the national average; Northeast and West states will reduce their overall investments by 2030 under the policy scenarios. |
| Keywords: | Clean Power Plan, Climate Change Mitigation Policy, Investment, Electricity, United States, Environmental Economics and Policy, Q42, Q43, Q48, Q58, |
| Date: | 2016–12–23 |
| URL: | http://d.repec.org/n?u=RePEc:ags:feemmi:251811&r=reg |
| By: | Matsumura, Toshihiro; Yamagishi, Atsushi |
| Abstract: | We investigate the long-run effect of energy conservation regulation, which forces firms to raise energy-saving investment above the cost-minimising level (i.e. the business-as-usual level). If Pigovian tax is imposed, additional regulation always harms social welfare under perfect competition. However, under imperfect competition, additional regulation can improve welfare even if Pigovian tax is imposed. Thus, under imperfect competition, there is a rationale for additional energy conservation regulation even in the presence of Pigovian tax. Our result under imperfect competition holds regardless of whether strategies are strategic substitutes or complements in contrast to direct entry regulation. |
| Keywords: | energy-saving, environmental tax, free entry market, consumer-benefiting regulation |
| JEL: | D61 H54 L13 |
| Date: | 2016–11–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:75626&r=reg |
| By: | Houévoh Amandine R. Gnonlonfin (LEAD, Université de Toulon) |
| Abstract: | This study investigates the preventive effect and substitution effect of the Municipal Solid Waste (MSW) pricing policy in France. We examine the relationship between quantities of MSW and incentive taxes with the use of a panel of 96 French metropolitan departments between 2005 and 2011, and we use panel data and Heckman two-step estimation in order to consider sample selection. We perform the analysis for the collection of MSW and six technologies of management of the waste, namely recycling materials, composting, incineration with and without energy recovery, landfilling and dumping. We estimate the elasticity of the collection of MSW and the elasticity of these technologies in relation to three incentive taxes of the French pricing system by considering the endogeneity of municipality’s decisions about both local incentive tax and technology choice. The results confirm that the French MSW pricing system has a preventive and a substitution effect and show that these effects are complementary. |
| Keywords: | municipal solid waste pricing system, user fee, Extend Producer Responsibility, tax on elimination, preventive effect, substitution effect |
| JEL: | H21 H23 Q53 Q56 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:fae:ppaper:2016.05&r=reg |
| By: | Mireille Chiroleu-Assouline (Paris School of Economics, University of Paris 1 Panthéon-Sorbonne and INRA UMR Economie Publique,) |
| Abstract: | The building sector is simultaneously characterized by regulation pervasiveness, by the superposition and overlapping of technical standards, and by a profusion of labels. This paper analyzes the rationale for such a multiplicity of mandatory and voluntary standards. The main consequences are the risk of confusion in the minds of buyers and the rise in prices due to the additional costs imposed by the continuous progression of requirements and the need to comply with many different standards. Both effects seriously hamper the penetration of the market by the products with the most demanding labels. The simplification of this regulatory and normative package would likely improve the economic efficiency of the sector. |
| Keywords: | NGOs, Energy efficiency, CSR, Labels, Voluntary self-regulation, Building industry |
| JEL: | L31 L74 L15 M14 Q48 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:fae:ppaper:2016.08&r=reg |
| By: | Noailly, Joëlle; Smeets, Roger |
| Abstract: | Addressing both the challenge of climate change and the world's growing energy needs will only be possible by achieving a breakthrough in clean technologies in order to deliver safe, clean and sustainable energy for future generations. Such a large-scale technological transition will require massive investments in research and development (R&D) of clean energy production. Within the sector of electricity generation, renewable (REN) energy technologies, such as solar, wind or geothermal energy, can provide a clean alternative to electricity produced from carbon-intensive fossil-fuels (FF). Nonetheless, private firms' investments in advancing innovation for renewable energy technologies face important challenges. [...] |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:eibwps:201606&r=reg |
| By: | Matsumura, Toshihiro; Yamagishi, Atsushi |
| Abstract: | We investigate a free-entry market in which incumbents engage in lobbying for changing regulations, which affect the cost of all firms equally. We find that incumbents have incentive to weaken or strengthen regulations, depending on the demand condition. |
| Keywords: | lobbying, common costs, free entry market, Stackelberg, regulation costs |
| JEL: | D43 L13 L51 |
| Date: | 2016–09–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:75624&r=reg |
| By: | Löschel, Andreas; Lutz, Benjamin Johannes; Managi, Shunsuke |
| Abstract: | We investigate the effect of the European Union Emissions Trading System (EU ETS) on the economic performance of manufacturing firms in Germany. Our difference-in-differences framework relies on several parametric conditioning strategies and nearest neighbor matching. As a measure of economic performance, we use the firm specific distance to the stochastic production frontier recovered from official German production census data. None of our identification strategies provide evidence for a statistically significant negative effect of emissions trading on economic performance. On the contrary, the results of the nearest neighbor matching suggest that the EU ETS rather had a positive impact on the economic performance of the regulated firms, especially during the first compliance period. A subsample analysis confirms that EU ETS increased the efficiency of treated firms in at least some two-digit industries. |
| Keywords: | Control of Externalities,Emissions Trading,Economic Performance,Manufacturing,Difference-in-Differences,Nearest Neighbor Matching,Stochastic Production Frontier |
| JEL: | Q52 D22 Q38 Q48 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:16089&r=reg |
| By: | Dorothée Charlier (University of Montpellier); Bérangère Legendre (IAE Savoie Mont-Blanc, IREGE) |
| Abstract: | Although fuel poverty is an increasingly serious problem across countries, it has not been well defined or measured in the literature. Currently, an objective measure that takes into account monetary constraints, poor energy efficiency of the dwelling and heating restrictions does not exist. Fuel poverty has been mainly treated as a problem of monetary poverty. However, fuel-impoverished households may differ from those with monetary poverty. Thus, this paper provides a fuel poverty index that takes into account all dimensions of the definition. This index is calculated using objective measures such as disposable income to account for monetary constraints, energy consumption as a measure of energy efficiency and indoor temperature to capture heating restrictions. |
| Keywords: | Fuel Poverty, Matching Method, Composite indicator, Heating restriction, Energy efficiency |
| JEL: | Q41 Q48 Q58 C21 C61 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:fae:ppaper:2016.06&r=reg |
| By: | Riccardo Camboni Marchi Adani (University of Verona); Paola Valbonesi (University of Padova) |
| Abstract: | Scoring rule auctions (SRAs) can be a powerful mechanism to procure complex works or services, when quality matters. However, given the buyer?s discretion in the design of SRAs, favouritism can arise as a drawback. In this paper we empirically document potential favouritism in an original dataset of 196 SRAs for the procurement of canteen services in Italy over the period 2009-2013. We then sketch a simple model highlighting how an SRA with multidimensional quality can be distorted to favour the incumbent bidder winning the competition. Finally, we design and run a new empirical test to verify our theoretical result. We ?nd that SRAs can be distorted to favour the incumbent bidder, and that the victory of the incumbent is associated with less competition and higher prices. |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:pad:wpaper:0210&r=reg |
| By: | John Finch; Susi Geiger; Emma Reid |
| Abstract: | This paper examines how environmental regulation is made operational when it legislates for modifications rather than the banning of products or substances. The continued circulation of such products draws attention to the heterogeneous conditions of their use and allows industry actors to accumulate evidence of the products' polluting effects over time. We find that this agentic quality of materials – including products and sites of application – is a vital and so far largely ignored dimension in the relationship between environmental regulation and innovation. This is captured in a process we term interactive stabilization, which describes how material agency becomes a focus for interactions between regulatory and industry actors. We develop our argument through an in-depth case study of the environmental regulation of production chemistry and identify three interactive processes: formulating regulatory principles; operationalizing these principles through technical documentation and calculation; and incremental innovation as used by chemists to address clients’ varied material problems in production. We trace stabilizing and destabilizing effects across these three processes and draw particular attention to the role of uncertainty in the operationalization of precaution as a regulatory principle. We argue that this uncertainty may lead to a form of regulatory capture that we frame as technological capture. This refers to how industry actors are able to test the limits of regulatory principles and calculations and on occasion contest these through their applied science capabilities. |
| Keywords: | Regulation; Technology marketing; Regulatory capture; Sales |
| JEL: | O38 Q55 Q58 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:rru:oapubs:10197/8184&r=reg |