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on Regulation |
| By: | Walid Matar (King Abdullah Petroleum Studies and Research Center) |
| Abstract: | Energy economists are interested in how a change in electricity prices prompts a response by way of end-user power demand. It is difficult to estimate price elasticities statistically if historical prices are low and change infrequently, especially in the short run. This paper extends a previous analysis by Matar (2018) that explored the merger of a residential building energy model and a utility maximization component by incorporating more demand-reducing measures within a utility-maximization framework for households. The framework is informed by the physical equations that govern how electricity is consumed. |
| Keywords: | Electricity demand, Consumer Energy Use, Electricity consumption, Electricity prices |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:prc:dpaper:ks-2019-dp51&r=all |
| By: | Shigeru Matsumoto; Hajime Sugeta |
| Abstract: | Households. energy-saving activities are often categorized into efficiency investment and curtailment action. Although households use these two activities simultaneously, previous studies have analyzed these two activities separately. In this study, we develop an energy-saving model based on a household production framework to show how these two activities are related. We assume that a household allocates time among market work, leisure, and curtailment action. We further assume that the household spends income on purchasing market goods, energy efficiency investment, and energy service. The household receives utility from entertainment activity and energy service but both market goods and leisure time are necessary for entertainment activity. If the household spends time on curtailment action, then leisure time form entertainment activity will be reduced. In contrast, if the household spend money for efficiency investment, then market goods available for entertainment activity will be reduced. With this household production framework, we show that a household can use energy efficiency investment and curtailment action jointly; namely, a household who invest heavily in energy efficiency will spend more time on curtailment action. In the empirical section, we use microlevel data from the Survey on Carbon Dioxide Emission from Households (SCDEH) to examine the validity of this prediction in a real world setting. SCDDH contains a wide variety of information related to household's energy usage, and both curtailment actions of households and vintage of appliances that households own were surveyed. Using this information, we examine whether the intensity of curtailment action varies between households owning new and old appliances. We show that households using an old television (TV) turn off the main switch of TV more frequently but those using a new refrigerator (REF) adjust the temperature according to the season and avoid overstuffing to maintain cooling efficiency. Furthermore, we show that households installing light emitting diode (LED) lamps control brightness of rooms and those using a new air conditioner (AC) set room temperature higher. Therefore, we observe that respondents jointly use efficiency investment and curtailment action, except in the case of a TV switch-off. This result predicts that the promotion of energy saving products will not hinder the households' voluntary energy saving practice. |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:tcr:wpaper:e137&r=all |
| By: | Dahlke, Steven |
| Abstract: | This paper presents estimates of short run impacts of a carbon price on the electricity industry using a cost-minimizing mathematical model of the U.S. market. Prices of 25 and 50 dollars per ton of carbon dioxide equivalent emissions cause electricity emissions reductions of 17% and 22% from present levels, respectively. This suggests significant electricity sector emissions reductions can be achieved quickly from a modest carbon tax. Short run effects refer to operational changes at existing U.S. power plants, mostly by switching production from coal plants to natural gas plants. The results do not include long run emissions reductions related to 1) new investments and retirements of electricity production assets, and 2) demand response as regulated electricity suppliers pass cost changes to retail customers. A state-level analysis of the results leads to the following conclusions: 1) most emissions reductions come from high coal-consuming states in the Mid-Atlantic and Midwest regions, 2) fifteen states increase emissions because their natural gas consumption offsets coal consumption in neighboring states, and 3) a flat per-capita rebate of tax revenue leads to wealth transfers across states. |
| Date: | 2019–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:b79yu&r=all |
| By: | Tamara Sheldon; Rubal Dua (King Abdullah Petroleum Studies and Research Center) |
| Abstract: | Demand-side policies, including rebates, sales tax exemptions, and tax credits promote clean vehicle adoption, with the goal of reducing local air pollution and greenhouse gas (GHG) emissions. Limited research to date on their cost-effectiveness and efficiency suggests such subsidies are unsustainably expensive, but this may not tell the whole story. KAPSARC used a nationally representative sample of new car purchases in the United States and developed a vehicle choice model-based simulation to assess the scope for reducing the costs of subsidy policies. |
| Keywords: | Air pollution, Battery capacity, Battery electric vehicles (BEV), Carbon dioxide emissions, Clean vehicle adoption, Economic modeling, Greenhouse Gas Emissions (GHG), Hybrid electric vehicles, Plug-in electric vehicles, Policy simulation, Targeted subsidy design |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:prc:dpaper:ks-2018-dp33&r=all |
| By: | Xiaoling Yang; Wolfgang Heidug; Douglas Cooke (King Abdullah Petroleum Studies and Research Center) |
| Abstract: | China’s political leadership has taken an increasingly public and proactive stance on climate change since 2014. This includes a commitment that Chinese carbon dioxide (CO2) emissions will peak before 2030 and enacting measures through the 13th Five-Year Plan to support energy efficiency, clean energy technology, and carbon management. Chinese policymakers consider carbon capture and storage (CCS) a critical bridging technology to help accelerate the decarbonization of its economy. This paper reviews and analyses Chinese CCS support policies from the perspective of an adaptive policymaking framework, recognizing uncertainty as an inherent element of the policymaking process, and draws more general lessons for responding to changing circumstances. |
| Keywords: | Adaptive policy framework, Carbon Capture and Storage (CCS), Carbon pricing, Carbon tax, Climate change, Decarbonization, Enhanced oil recovery, Infrastructure investment, Policy development, Renewable energy, Subsidies |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:prc:dpaper:ks-2018-dp37&r=all |
| By: | Paul Mollet; Saleh Al Muhanna; AlJawhara Al Quayid (King Abdullah Petroleum Studies and Research Center) |
| Abstract: | The European Union (EU) is facing a critical period as the European Commission draws up a 2050 climate strategy roadmap that is likely to form the basis for the EU’s next nationally determined contribution to the COP21 Paris Agreement. Until recently, the UK was the undisputed leader of the coalition of EU member states (the Green Growth Group) seeking more ambitious climate targets. Brexit, however, is likely to put an end to the UK-driven focus on market instruments to achieve climate targets. Instead, the Commission is now likely to turn to policies prioritizing emissions and energy targets. |
| Keywords: | Brexit, Climate governance, Climate change, Climate policy, |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:prc:dpaper:ks-2018-dp44&r=all |
| By: | Henriques, David |
| Abstract: | In Electronic Payment Networks (EPNs), the No-Surcharge Rule (NSR) requires that merchants charge at most the same amount for a payment card transaction as for cash. In this paper, I use a three-party model (consumers, local monopolistic merchants, and a proprietary EPN) with endogenous transaction volumes, heterogeneous card use benefits for merchants and network externalities of card-accepting merchants on cardholders to assess the efficiency and welfare effects of the NSR. I show that the NSR: (i) promotes retail price efficiency for cardholders, and (ii) inefficiently reduces card acceptance among merchants. The NSR can enhance social welfare and improve payment efficiency by shifting output from cash payers to cardholders. However, if network externalities are sufficiently strong, the reduction of card payment acceptance affects cardholders negatively and, with the exception of the EPN, all agents will be worse off under the NSR. This paper also suggests that the NSR may be an instrument to decrease cash usage, but the social optimal policy on the NSR may depend on the competitive conditions in each market. |
| Keywords: | competition; electronic payment networks; market power; net-work externalities; no-surcharge rule; regulation; two-sided markets |
| JEL: | G21 L14 L42 |
| Date: | 2018–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:90664&r=all |
| By: | Asplund, Disa (Research Programme in Transport Economics); Pyddoke, Roger (Research Programme in Transport Economics) |
| Abstract: | Studies of cities which successfully have shifted mode choice from car to more sustainable modes, suggest that coordinated packages of mutually reinforcing policy instruments are needed. Congestion charges and parking fees can be important parts of such packages. This paper aims to examine the introduction of welfare optimal congestion charges and parking fees in a model calibrated to Uppsala, a small city in Sweden. The results suggest that welfare optimal congestion charges in Uppsala are as high as EUR 3.0 in the peak hours and EUR 1.5 in the off-peak. In a rough cost-benefit analysis it is shown that the introduction of congestion charges in Uppsala are welfare improving if operating costs of congestion charges are proportional to city population size (compared to Gothenburg). The model can be used to assess when it is worthwhile to introduce congestion pricing. |
| Keywords: | Congestion charges; Parking; Pricing; Demand; Optimization; Urban; Welfare |
| JEL: | R10 R41 R48 |
| Date: | 2019–11–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:trnspr:2019_002&r=all |
| By: | Doda, Baran; Quemin, Simon; Taschini, Luca |
| Abstract: | We formally study the determinants, magnitude and distribution of efficiency gains generated in multilateral linkages between permit markets. We provide two novel decomposition results for these gains, characterize individual preferences over linking groups and show that our results are largely unaltered with strategic domestic emissions cap selection or when banking and borrowing are allowed. Using the Paris Agreement pledges and power sector emissions data of five countries which all use or considered using both emissions trading and linking, we quantify the efficiency gains. We find that the computed gains can be sizable and are split roughly equally between effort and risk sharing. |
| Keywords: | Climate change policy; International emissions trading systems; Multilateral linking; Effort sharing; Risk sharing; ES/K006576/1 |
| JEL: | Q58 H23 F15 |
| Date: | 2019–09–13 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:101670&r=all |
| By: | Gasmi, Farid; Hanspach, Philip |
| Abstract: | This article proposes a two-country model of electricity trade under peak-load pricing. We apply the model to France and the UK to assess the benefit to the UK of trade within the European internal energy market (IEM). Calibration and simulations of the model aimed at simulating bilateral trade in the market coupling process at electricity exchanges show the following. First, the occurrence of gains from trade for both countries is highly dependent on whether imported electricity affects the price in the local market and whether imports alleviate scarcity. Second, the main effect of importing electricity is a shift in welfare from domestic producers to domestic consumers of the importing country. Finally, the UK’s membership in the IEM generates additional welfare for the UK of up to 900 M€ per year across a range of scenarios in which the number of on-peak periods are exogenously varied in a conservative way relative to the actual data. |
| Keywords: | Electricity, Market Coupling, Brexit, Calibration, Simulation. |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:123709&r=all |
| By: | Wessel, Nate |
| Abstract: | The study of accessibility - the ease of reaching destinations - by public transport has made huge advances thanks to the availability of standardized, routable transit schedule data. The General Transit Feed Specification (GTFS) has provided researchers with a vast trove of machine-readable data allowing for highly detailed spatio-temporal modelling of scheduled transit operations. Yet it is well established that in the real-world schedules are imperfect - vehicles often run late, get bunched, miss transfers, arrive too full for anyone to board, and otherwise behave in predictably unpredictable ways. Schedule data alone cannot possibly account for this distinctly stochastic component of much transit service, which to date has been considered separate from accessibility analysis under the umbrella of ``reliability''. This dissertation takes the perspective that transit service is reliably unreliable and will continue to be so until humans are taken out of the equation. Detailed observations of actual service can be used to construct more realistic models for estimating travel times and thus accessibility via transit. Chapter 2 introduces a novel method of converting a detailed GPS record of transit fleet locations into a retrospective GTFS package. This backward-looking "schedule'' format allows the same tools developed for schedule-based GTFS analysis to be applied in Chapter 3 to a more accurate depiction of actual transit accessibility. The findings indicate that models of transit accessibility based on schedule data alone tend to produce substantial overestimates of accessibility and systematic spatial errors by failing to account for normal irregularities in service provision. Chapter 4 points toward a way of better suiting available GTFS analysis tools to actual transit service by addressing the problem of imperfect information in modelled route choice. The travel time implications for a large minority of trips are shown to be substantial. Transit accessibility research has come a long way in the last decade and has a long way yet to go. Models based on schedule data alone should give way in many cases to models based on service as actually provided, acknowledging that schedules may guide but rarely constrain the transit services that passengers actually use every day. |
| Date: | 2019–05–08 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:c4yvx&r=all |
| By: | Wanzenböck, Iris; Wesseling, Joeri; Frenken, Koen; Hekkert, Marko; Weber, Matthias |
| Abstract: | We aim for a better conceptualization of Mission-oriented Innovation Policy (MIP). Our starting point is an analytical decomposition of societal problems and innovative solutions based on the degrees of wickedness regarding three aspects: i) contestation, ii) complexity and iii) uncertainty. We argue that both problems and solutions can be diverging (contested, complex, uncertain) or converging (uncontested, well-defined, informed). Based on the resulting problem-solution topology, we suggest a process-oriented view on MIP and discuss three alternative pathways along which convergence between problems and solutions can be achieved to transform wicked problems into legitimate solutions. We illustrate the pathways with the examples of smoking bans, CCTV and wind energy. For policy makers, locating a societal challenge in this problem-solution space, and implementing policy strategies accordingly, is expected to accelerate both the legitimacy of a mission and the resulting solutions. |
| Date: | 2019–02–13 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:njahp&r=all |
| By: | Clément Malgouyres (IPP - Institut des politiques publiques - PSE - Paris School of Economics, PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique); Thierry Mayer (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique, IEP Paris - Sciences Po Paris - Institut d'études politiques de Paris, Centre de recherche de la Banque de France - Banque de France, CEPR - Center for Economic Policy Research - CEPR); Clément Mazet-Sonilhac (IEP Paris - Sciences Po Paris - Institut d'études politiques de Paris, Centre de recherche de la Banque de France - Banque de France) |
| Abstract: | In this paper, we document the presence of "technology-induced" trade in France between 1997 and 2007 and assess its impact on consumer welfare. We use the staggered roll-out of broadband internet to estimate its causal effect on the importing behavior of affected firms. Using an event-study design, we find that broadband expansion increases firm-level imports by around 25%. We further find that the "sub-extensive" margin (number of products and sourcing countries per firm) is the main channel of adjustment and that the effect is larger for capital goods. Finally, we develop a model where firms optimize over their import strategy and which yields a sufficient statistics formula for the quantification of the effects of broadband on consumer welfare. Interpreted within this model, our reduced-form estimates imply that broadband internet reduced the consumer price index by 1.7% and that the import-channel, i.e. the enhanced access to foreign goods that is allowed by broadband, accounts for a quarter of that effect. |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-02160268&r=all |