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Modeling Electricity Prices: From the State of the Art to a Draft of a New Proposal AgEcon
Serati, Massimiliano; Manera, Matteo; Plotegher, Michele.
In the last decades a liberalization of the electric market has started; prices are now determined on the basis of contracts on regular markets and their behaviour is mainly driven by usual supply and demand forces. A large body of literature has been developed in order to analyze and forecast their evolution: it includes works with different aims and methodologies depending on the temporal horizon being studied. In this survey we depict the actual state of the art focusing only on the recent papers oriented to the determination of trends in electricity spot prices and to the forecast of these prices in the short run. Structural methods of analysis, which result appropriate for the determination of forward and future values are left behind. Studies have...
Tipo: Working or Discussion Paper Palavras-chave: Electricity Spot Prices; Autoregressive Models; GARCH Models; Regime Switching Models; Dynamic Factor Models; Demand and Price Analysis; Resource /Energy Economics and Policy; C2; C3; Q4.
Ano: 2008 URL: http://purl.umn.edu/44426
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The Effects of Trading and Banking in the SO2 Allowance Market AgEcon
Burtraw, Dallas; Mansur, Erin T..
The 1990 Clean Air Act Amendments initiated a dramatic reduction in emissions of sulfur dioxide and nitrogen oxides by electric power plants. This paper provides an evaluation of the environmental and public health consequences of the trading and banking provisions of Title IV. A sizable shift in the geographic location of emissions under Title IV (in some states of over 20 percent of emissions after Title IV is implemented) is attributable to trading and/or to banking. There has been considerable concern that this shift in emissions would cause harm to downwind areas due to long-range transport of pollution. We find the resulting change in atmospheric concentrations and deposition of pollutants, and the change in monetized health benefits, are most...
Tipo: Working or Discussion Paper Palavras-chave: Acid rain; Sulfur dioxide; Trading; Benefit-cost analysis; Clean Air Act; Environmental Economics and Policy; H43; Q2; Q4.
Ano: 1999 URL: http://purl.umn.edu/10630
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Efficient Emission Fees in the U.S. Electricity Sector AgEcon
Banzhaf, H. Spencer; Burtraw, Dallas; Palmer, Karen L..
This paper provides new estimates of efficient emission fees for sulfur dioxide (SO2) and nitrogen oxides (NOX) emissions in the U.S. electricity sector. The estimates are obtained by coupling a detailed simulation model of the U.S. electricity markets with an integrated assessment model that links changes in emissions with atmospheric transport, environmental endpoints, and valuation of impacts. Efficient fees are found by comparing incremental benefits with emission fee levels. National quantity caps that are equivalent to these fees also are computed, and found to approximate caps under consideration in the current multi-pollutant debate in the U.S. Congress and the recent proposals from the Bush administration for the electricity industry. We also...
Tipo: Working or Discussion Paper Palavras-chave: Emissions trading; Emission fees; Air pollution; Cost-benefit analysis; Electricity; Particulates; Nitrogen oxides; NOx; Sulfur dioxide; SO2; Health benefits; Environmental Economics and Policy; Q2; Q4; D61.
Ano: 2002 URL: http://purl.umn.edu/10505
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Project-Based Mechanisms for Emissions Reductions: Balancing Trade-offs with Baselines AgEcon
Fischer, Carolyn.
Project-based mechanisms for emissions reductions credits, like the Clean Development Mechanism, pose important challenges for policy design because of several inherent characteristics. Participation is voluntary, so it will not occur without sufficient credits. Evaluating reductions requires assigning an emissions baseline for a counterfactual that cannot be measured. Some investments have both economic and environmental benefits and might occur anyway. Uncertainty surrounds both emissions and investment returns, and parties to the project are likely to have more information than the certifying authority. The certifying agent is limited in its ability to design a contract that would reveal investment intentions. As a result, rules for benchmarking...
Tipo: Working or Discussion Paper Palavras-chave: Climate policy; Clean Development Mechanism; Baselines; Asymmetric information; Offsets; Emissions reduction; Tradable emissions permits; Environmental Economics and Policy; D8; Q4.
Ano: 2004 URL: http://purl.umn.edu/10836
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Policy Instruments for Climate Change: How Can National Governments Address a Global Problem? AgEcon
Stavins, Robert N..
There continues to be great debate about the desirability of taking actions to limit carbon dioxide (CO2) and other greenhouse gas emissions, but it is important to consider policy instruments that can be employed to meet targets that may eventually be forthcoming. The theoretical advantages of market-based instruments, such as carbon taxes and systems of tradable carbon rights, are striking. In the U.S. domestic context, grandfathered tradable permits will probably be the preferred approach (if any) in the short run, although revenueneutral carbon taxes will hold greater promise in the long run. In the international context, a system of international tradable permits could provide important advantages over alternative approaches, but it is difficult to...
Tipo: Working or Discussion Paper Palavras-chave: Global climate change; Policy instruments; Political and institutional barriers; Environmental Economics and Policy; Q25; Q28; Q4.
Ano: 1997 URL: http://purl.umn.edu/10757
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Measuring the Contribution to the Economy of Investments in Renewable Energy: Estimates of Future Consumer Gains AgEcon
MacAuley, Molly K.; Shih, Jhih-Shyang; Aronow, Emily; Austin, David H.; Bath, Tom; Darmstadter, Joel.
In this paper we develop a cost index-based measure of the expected consumer welfare gains from innovation in electricity generation technologies. To illustrate our approach, we estimate how much better off consumers would be from 2000 to 2020 as renewable energy technologies continue to be improved and gradually adopted, compared with a counterfactual scenario that allows for continual improvement of conventional technology. We proceed from the position that the role and prospects of renewable energy are best assessed within a market setting that considers competing energy technologies and sources. We evaluate five renewable energy technologies used to generate electricity: solar photovoltaics, solar thermal, geothermal, wind, and biomass. For each, we...
Tipo: Working or Discussion Paper Palavras-chave: Energy economics; Technical change; Resource /Energy Economics and Policy; Q4; O3.
Ano: 2002 URL: http://purl.umn.edu/10588
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Nachwachsende Rohstoffe – entwicklungspolitisch einmal anders gedacht AgEcon
Breuer, Thomas; Henckes, Christian; Loos, Tim K.; Zeller, Manfred.
Steigende Agrarpreise, und damit steigende Nahrungsmittelpreise, beleben die Diskussion über die Notwendigkeit der „Non-Food“-Nutzung (Anbau von Energiepflanzen, aber auch Pflanzen für die stoffliche Nutzung, z.B. Holz oder Kautschuk) von Agrarrohstoffen. Dieses Diskussionspapier betrachtet die allgemeinen Brennpunkte der Debatte und erörtert speziell die Möglichkeiten von Biotreibstoffen als Triebkraft für Investitionen in Infrastruktur und Marktzugang im ländlichen Raum und als Treiber der Nachhaltigkeitsdiskussion im Agrarsektor der Entwicklungs- und Schwellenländer. Auf lange Sicht ist die konkurrierende Nutzung von Land für Energie- und Nahrungsmittelpflanzen differenziert zu betrachten. Kurz- bis mittelfristig jedoch ist die energetische und...
Tipo: Working or Discussion Paper Palavras-chave: Agrarrohstoffe; Biomasse; Nachwachsender Rohstoff; Entwicklungszusammenarbeit; Agrarpolitik; Nachhaltigkeit; Resource /Energy Economics and Policy; Q16; Q2; Q4.
Ano: 2011 URL: http://purl.umn.edu/114751
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Sulfur Dioxide Control by Electric Utilities: What Are the Gains from Trade? AgEcon
Carlson, Curtis; Burtraw, Dallas; Cropper, Maureen L.; Palmer, Karen L..
Title IV of the 1990 Clean Air Act Amendments (CAAA) established a market for transferable sulfur dioxide (SO2) emission allowances among electric utilities. This market offers firms facing high marginal abatement costs the opportunity to purchase the right to emit SO2 from firms with lower costs, and is expected to yield cost savings compared to a command and control approach to environmental regulation. This paper uses econometrically estimated marginal abatement cost functions for power plants affected by Title IV of the CAAA to evaluate the performance of the SO2 allowance market. Specifically, we investigate whether the much-heralded fall in the cost of abating SO2, compared to original estimates, can be attributed to allowance trading. We demonstrate...
Tipo: Working or Discussion Paper Palavras-chave: Acid rain; Sulfur dioxide; Air pollution; Clean Air Act; Title IV; Permit trading; Environmental Economics and Policy; H43; Q2; Q4.
Ano: 2000 URL: http://purl.umn.edu/10790
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International Cooperation on Climate Change Adaptation from an Economic Perspective AgEcon
de Bruin, Kelly C.; Dellink, Rob B.; Tol, Richard S.J..
This paper investigates the economic incentives of countries to cooperate on international adaptation financing. Adaptation is generally implicitly incorporated in the climate change damage functions as used in Integrated Assessment Models. We replace the implicit decision on adaptation with explicit adaptation in a multi-regional setting by using an adjusted RICE model. We show that making adaptation explicit will not affect the optimal mitigation path when adaptation is set at its optimal level. Sub-optimal adaptation will, however, change the optimal mitigation path. Furthermore this paper studies for different forms of cooperation what effects international adaptation transfers will have on (i) domestic adaptation and (ii) the optimal mitigation path....
Tipo: Working or Discussion Paper Palavras-chave: Climate Change; Adaptation Funding; Integrated Assessment Modeling; Environmental Economics and Policy; H41; Q4; Q54.
Ano: 2010 URL: http://purl.umn.edu/90949
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The Impact of Urbanization on CO2 Emissions: Evidence from Developing Countries AgEcon
Martinez-Zarzoso, Inmaculada.
This paper analyzes the impact of urbanization on CO2 emissions in developing countries. In this study we treat population as a predictor in the model, instead of assuming a unitary elasticity of emissions with respect to population growth. We contribute to the existing literature by examining the effect of urbanization, taking into account the presence of heterogeneity in the sample of countries and testing for the stability of the estimated elasticities over time. The sample covers the period from 1975 through 2005 for different groups of countries, classified according to their income levels. Our results show that, whereas the impact of population growth on emissions is above unity and only slightly different for upper, middle, and low-income countries,...
Tipo: Working or Discussion Paper Palavras-chave: CO2 Emissions; Developing Countries; Panel Data; Population Growth; Urbanization; Q25; Q4; Q54.
Ano: 2008 URL: http://purl.umn.edu/37673
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Carbon Leakage with International Technology Spillovers AgEcon
Gerlagh, Reyer; Kuik, Onno.
In this paper we study the effect of international technology spillovers on carbon leakage. We first develop and analyse two simple competing models for carbon leakage. The first model represents the pollution haven hypothesis. It focuses on the international competition between firms that produce energy-intensive goods. The second model highlights the role of a globally integrated carbon-energy market. We calculate formulas for the leakage rates in both models and, through meta-analysis, show that the second model captures best the major mechanisms reported in the CGE literature on carbon leakage. We extend this model with endogenous energy-saving technology and international technology spillovers. This feature is shown to decrease carbon leakage. We...
Tipo: Working or Discussion Paper Palavras-chave: Carbon-Leakage; Climate Policy; Induced Technological Change; Trade and Environment; Environmental Economics and Policy; F18; O39; Q25; Q4.
Ano: 2007 URL: http://purl.umn.edu/9328
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The Evolution of NOx Control Policy for Coal-Fired Power Plants in the United States AgEcon
Burtraw, Dallas; Evans, David A..
Emissions of nitrogen oxides (NOx ) contribute to formation of particulate matter and ozone, and also to acidification of the environment. The electricity sector is responsible for about 20% of NOx emissions in the United States, and the sector has been the target of both prescriptive (command-and-control) and flexible (cap-and-trade) approaches to regulation. We summarize the major NOx control policies affecting this sector, and provide some perspectives as to their effectiveness. While both prescriptive and flexible approaches continue to play an important role, significant new proposals have wholly embraced a cap-and-trade approach.
Tipo: Working or Discussion Paper Palavras-chave: Emissions trading; Cap and trade; Air pollution; Cost-benefit analysis; Electricity; Particulates; Ozone; Nitrogen oxides; Acid rain; Environmental Economics and Policy; Q25; Q4; D62; Q28.
Ano: 2003 URL: http://purl.umn.edu/10645
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Bioenergy in a Greenhouse Mitigating World AgEcon
McCarl, Bruce A..
Tipo: Journal Article Palavras-chave: Environmental Economics and Policy; Resource /Energy Economics and Policy; Q1; Q4; Q54.
Ano: 2008 URL: http://purl.umn.edu/94503
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Economic Analysis and the Formulation of U.S. Climate Policy AgEcon
Toman, Michael.
Economic analysts within government agencies as well as outside government has played a noticeable and increasing role in formulating U.S. climate policy. However, that role has remained limited; in particular, economic analysis has largely been ignored and occasionally even derided in the context of setting targets for GHG control. This paper explores this uneasy relationship between analysis and policy during several U.S. administrations. Some of these problems stem from the incompleteness of the economic analyses themselves, and economic analysts sometimes have not been the most effective advocates for their own findings. However, I think one of the biggest obstacles to more effective use of economic analysis in climate policymaking has been a basic...
Tipo: Working or Discussion Paper Palavras-chave: Climate change; Kyoto Protocol; Council of Economic Advisers; Resource /Energy Economics and Policy; Q2; Q4.
Ano: 2003 URL: http://purl.umn.edu/10528
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Regulatory Tailoring, Reliability, and Price Volatility with Stochastic Breakdowns AgEcon
Gruenspecht, Howard K..
Although real-world energy supply systems are subject to stochastic failures, the impacts of proposed regulations affecting these systems have typically been evaluated using non-stochastic models. This paper develops an energy market model that explicitly allows for stochastic failures and demonstrates they play an important, or even dominant, role in determining the market impacts of environmental regulations that tailor product specifications to address local or regional conditions, such as fuel-formulation requirements specific to certain regional markets within the United States. While traditional non-stochastic analyses view the tailoring of regulatory requirements by location as an efficiency-enhancing alternative to a -one size fits all- regulatory...
Tipo: Working or Discussion Paper Palavras-chave: Reliability; Boutique fuels; Gasoline price spikes; Stochastic failures; Environmental regulation; Tailored regulation; Demand and Price Analysis; Q2; Q4.
Ano: 2002 URL: http://purl.umn.edu/10781
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Pay-At-The-Pump (PATP) Auto Insurance: Criticisms and Proposed Modifications AgEcon
Khazzoom, J. Daniel.
In 1998 the U.S. Environmental Protection Agency sponsored an effort to examine the criticisms and concerns expressed about Pay-at-the-Pump (PATP) auto insurance and explore the reformulation of PATP, taking into account these concerns. This paper provides a brief exposition of PATP and its main advantages followed by a review of its criticisms and concerns. We outline a reconstituted PATP proposal emerging from the review of these criticisms: a hybrid system that merges the best features from PATP and the existing insurance system. It retains what is consistent with the free market operation and market incentive in the existing system. At the same time it restores the price signal, the sine qua non for economic efficiency, where it has been extinguished...
Tipo: Working or Discussion Paper Palavras-chave: Pay at the pump; Distance-based insurance; Efficient pricing of auto insurance; Conversion of fixed to variable cost; Loss on insuring the uninsured motorist; Pay at the pump and the poor; Environmental benefit of pay at the pump; Vehicle fuel-efficiency and safety; Vehicle miles traveled; Traffic density; Accident risk; Public Economics; L1; L5; L8; L9; M2; Q2; Q4; R4.
Ano: 2000 URL: http://purl.umn.edu/10811
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Inside the Black Box: Price Linkage and Transmission Between Energy and Agricultural Markets AgEcon
Du, Xiaodong; McPhail, Lihong Lu.
This study addresses the complex relationship between energy and agricultural markets—represented by corn, ethanol, and gasoline prices—particularly in light of the growth in biofuel production. Contemporaneous price response and transmission of market shocks are investigated in a simultaneous-equation system to disclose fundamental driving forces before and after the development of large-scale ethanol production. We use a dynamic conditional correlation multivariate GARCH model to demonstrate a strengthening relationship among corn, ethanol, and gasoline prices. We identify a structural change point at March 25, 2008 using the test by Bai and Perron (2003). The strengthened market relationship is further illustrated by variance decomposition based on a...
Tipo: Conference Paper or Presentation Palavras-chave: Corn; Ethanol; Gasoline; Structural break; Structural VAR; GARCH; Agricultural and Food Policy; Demand and Price Analysis; Research Methods/ Statistical Methods; Resource /Energy Economics and Policy; C32; Q11; Q4.
Ano: 2011 URL: http://purl.umn.edu/103268
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Ozone Externalities on Crop Production: Insights from UK Farm Level Data AgEcon
Neeliah, Harris; Shankar, Bhavani.
Tropospheric ozone is an air pollutant thought to reduce crop yields across Europe. Much experimental scientific work has been completed or is currently underway to quantify yield effects at ambient ozone levels. In this research, we seek to directly evaluate whether such effects are observed at the farm level. We use both primal (production function) as well as dual (profit function) methods, with ozone as a fixed input, to explore the extent to which output and profits are affected by ozone in the UK. A panel dataset on UK farms is intersected with spatial data on ozone, and panel data production and profit function estimation methods are used. The production function does predict a statistically significant negative effect of ozone on wheat yields at...
Tipo: Conference Paper or Presentation Palavras-chave: Ozone; Wheat; Crop production; Production function; Profit function; Crop Production/Industries; Resource /Energy Economics and Policy; Q4; P2.
Ano: 2005 URL: http://purl.umn.edu/24659
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Air Emissions of Ammonia and Methane from Livestock Operations: Valuation and Policy Options AgEcon
Shih, Jhih-Shyang; Burtraw, Dallas; Palmer, Karen L.; Siikamaki, Juha.
The animal husbandry industry is a major emitter of methane, which is an important greenhouse gas. The industry is also a major emitter of ammonia, which is a precursor of fine particulate matter, arguably the number-one environment-related public health threat facing the nation. We present an integrated process model of the engineering economics of technologies to reduce methane and ammonia emissions at dairy operations in California. Three policy options are explored: greenhouse gas offset credits for methane control, particulate matter offset credits for ammonia control, and expanded net metering policies to provide revenue for the sale of electricity generated from captured methane gas. Individually, any of these policies appears to be sufficient to...
Tipo: Working or Discussion Paper Palavras-chave: Methane; Ammonia; Carbon dioxide; Greenhouse gases; Climate change; Offset; Particulate matter; Net metering; Environmental policy; CAFO; Manure management; Biodigester; Electricity; Global warming; Cost-benefit; Incentive approach; Livestock Production/Industries; Q2; Q4; Q53.
Ano: 2006 URL: http://purl.umn.edu/10749
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Energy and Climate Change in China AgEcon
Carraro, Carlo; Massetti, Emanuele.
The paper examines future energy and emissions scenarios in China, presenting historical data and scenarios generated using the Integrated Assessment Model WITCH. A Business-as-Usual scenario is compared with four scenarios in which Greenhouse Gases emissions are taxed, at different levels. Key insights are provided to evaluate the Chinese pledge to reduce the emissions intensity of Gross Domestic Product by 40/45 percent in 2020 contained in the Copenhagen Accord. Marginal and total abatement costs are discussed using the OECD economies as a term of comparison. Cost estimates for different emissions reduction targets are used to assess the political feasibility of the 50 percent global reduction target set by the G8 and Major Economies Forum in July 2009.
Tipo: Working or Discussion Paper Palavras-chave: Climate Change; China; Energy Efficiency; Energy and Development; Resource /Energy Economics and Policy; Q4.
Ano: 2011 URL: http://purl.umn.edu/101294
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