Research

21 pages, 3462 KiB

Open AccessArticle

Short Run Effects of Carbon Policy on U.S. Electricity Markets

by Steve Dahlke

Energies 2019, 12(11), 2150; https://doi.org/10.3390/en12112150 - 05 Jun 2019

Cited by 4 | Viewed by 3864

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 per ton of carbon dioxide equivalent emissions cause electricity emissions reductions of 17% [...] Read more.

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 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, and diminishing reductions occur when increasing from $25 to $50. The model captures short run effects via operational changes at existing U.S. power plants, mostly by switching production from coal to natural gas. A state-level analysis yields the following conclusions: (1) states which reduce the most emissions are high coal-consumers in the Mid-Atlantic and Midwest regions, (2) 15 states increase emissions after carbon policy because they increase natural gas consumption to offset coal consumption decreases in neighboring states, and (3) a flat per-capita rebate of tax revenue leads to wealth transfers across states. Full article

(This article belongs to the Special Issue Energy Markets and Economics)

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21 pages, 708 KiB

Open AccessArticle

Are Exports More Responsive to Clean or Dirty Energy? The Case of Vietnam’s Exports to 54 Countries

by Seema Narayan and Tri Tung Nguyen

Energies 2019, 12(8), 1558; https://doi.org/10.3390/en12081558 - 24 Apr 2019

Cited by 6 | Viewed by 2978

Abstract

In this paper we examine the influence of clean (hydropower) or dirty (fossil fuel generated) energy on bilateral exports. We focus on bilateral exports from Vietnam, a developing nation with a fast-growing economy propelled by international trade, to her top 54 trading partners [...] Read more.

In this paper we examine the influence of clean (hydropower) or dirty (fossil fuel generated) energy on bilateral exports. We focus on bilateral exports from Vietnam, a developing nation with a fast-growing economy propelled by international trade, to her top 54 trading partners over the period 1986–2010. Our key results suggest that there is a significant, positive, and stable long-term relationship between electricity and exports, with some variations across the regional panels of the trading partners and electricity sources. Trading partners of Vietnam are sensitive to how electricity is generated. For trading partners from regions excluding low income Asia, bilateral exports respond more to renewables than fossil fuel generated electricity, which indicates that exports are sensitive to certain qualities of energy sources, namely reliability and price competitiveness. Full article

(This article belongs to the Special Issue Energy Markets and Economics)

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23 pages, 594 KiB

Open AccessArticle

Modelling the Dynamics of Fuel and EU Allowance Prices during Phase 3 of the EU ETS

by M. Angeles Carnero, Jose Olmo and Lorenzo Pascual

Energies 2018, 11(11), 3148; https://doi.org/10.3390/en11113148 - 14 Nov 2018

Cited by 10 | Viewed by 3240

Abstract

This article studies the relationship between the prices of fuel and EU Allowances (EUA) for carbon emissions during Phase 3 of the European Union Emissions Trading System. We find that the forward prices of EUA, coal, gas and Brent oil are jointly determined [...] Read more.

This article studies the relationship between the prices of fuel and EU Allowances (EUA) for carbon emissions during Phase 3 of the European Union Emissions Trading System. We find that the forward prices of EUA, coal, gas and Brent oil are jointly determined in equilibrium. The existence of such a long-run relationship entails a permanent-transitory decomposition for the series of EUA and fuel prices that reveals the short- and long-term causal influence of the EUA market in shaping the joint dynamics of fuel prices. This result complements the literature that suggests that EUA prices are driven by the dynamics of fuel prices. Interestingly, we do not find an equilibrium relationship in the spot market. EUA and fuel spot prices are driven by independent unit root processes. The differences between spot and forward markets are attributed to the tradability of forward prices that are used for speculation and hedging in financial markets. In contrast, spot prices are mainly driven by supply and demand in energy markets. Full article

(This article belongs to the Special Issue Energy Markets and Economics)

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13 pages, 1868 KiB

Open AccessArticle

Strategic Corporate Social Responsibility, Sustainable Growth, and Energy Policy in China

by Lucheng Hong and Angela Chao

Energies 2018, 11(11), 3024; https://doi.org/10.3390/en11113024 - 03 Nov 2018

Cited by 7 | Viewed by 2700

Abstract

China’s economy steps into the “new normal” phase, as it is growing in an innovation-driven instead of a factor-driven mode. In this paper, we constructed the corporate behavioral decision models in different scenarios of policy and analyzed the effect of energy policies on [...] Read more.

China’s economy steps into the “new normal” phase, as it is growing in an innovation-driven instead of a factor-driven mode. In this paper, we constructed the corporate behavioral decision models in different scenarios of policy and analyzed the effect of energy policies on corporate behavior and societal welfare, in a duopoly market. The following conclusions were derived. (1) In a duopoly, the product pricing is irrelevant to the resource cost in their production process. (2) For the firm undertaking the social responsibility, the energy tax imposed by the government would increase either the production or the profit, but decrease the consumer surplus. In contrast, for the other firms, the energy tax rate is opposite to their profit. (3) Low-energy-consuming products will promote efficiency, which reduces either the price or the marginal cost, resulting in a more conspicuous cost advantage to the firm adopting the ecological innovation. (4) The marginal cost for a low-energy-consuming technology research and development steadily decreases, which turns their short-term financial disadvantages into the long-term competitive advantages. The marginal contribution of this paper was to build a simultaneously moving model, in duopoly market, and provide theoretical evidence to endogenize the firm strategy to undertake social responsibilities and to realize sustainable growth. Full article

(This article belongs to the Special Issue Energy Markets and Economics)

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21 pages, 997 KiB

Open AccessArticle

Asymmetric Impacts of Oil Price on Inflation: An Empirical Study of African OPEC Member Countries

by Umar Bala and Lee Chin

Energies 2018, 11(11), 3017; https://doi.org/10.3390/en11113017 - 02 Nov 2018

Cited by 54 | Viewed by 6275

Abstract

This study investigates the asymmetric impacts of oil price changes on inflation in Algeria, Angola, Libya, and Nigeria. Three different kinds of oil price data were applied in this study: the actual spot oil price of individual countries, the OPEC reference basket oil [...] Read more.

This study investigates the asymmetric impacts of oil price changes on inflation in Algeria, Angola, Libya, and Nigeria. Three different kinds of oil price data were applied in this study: the actual spot oil price of individual countries, the OPEC reference basket oil price, and an average of the Brent, WTI, and Dubai oil price. Autoregressive distributed lag (ARDL) dynamic panels were used to estimate the short- and long-term impacts. Also, we partitioned the oil price into positive and negative changes to capture asymmetric impacts and found that both the positive and negative oil price changes positively influenced inflation. However, the impact was found to be more significant when the oil prices dropped. We also found that the money supply, the exchange rate, and the gross domestic product (GDP) are positively related to inflation, while food production is negatively related to inflation. Accordingly, policy-makers should be cautious when formulating policies between the positive and negative changes in oil prices, as it was shown that inflation increased when the oil price dropped. Additionally, the use of a contractionary monetary policy would help to reduce the inflation rate. Lastly, we suggest that the government should encourage domestic food production, both in quantity and quality, to reduce inflation. Full article

(This article belongs to the Special Issue Energy Markets and Economics)

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22 pages, 7204 KiB

Open AccessArticle

Oil Prices and Global Stock Markets: A Time-Varying Causality-In-Mean and Causality-in-Variance Analysis

by Emrah İ. Çevik, Erdal Atukeren and Turhan Korkmaz

Energies 2018, 11(10), 2848; https://doi.org/10.3390/en11102848 - 21 Oct 2018

Cited by 25 | Viewed by 4249

Abstract

This study examines the Granger-causal relationships between oil price movements and global stock returns by using time-varying Granger-causality tests in mean and in variance. We use the daily returns from Morgan Stanley Capital International (MSCI) G7 and the MSCI Emerging Stock Market Indexes [...] Read more.

This study examines the Granger-causal relationships between oil price movements and global stock returns by using time-varying Granger-causality tests in mean and in variance. We use the daily returns from Morgan Stanley Capital International (MSCI) G7 and the MSCI Emerging Stock Market Indexes to distinguish between the effects of daily oil price movements on G7 countries’ and emerging market countries’ stock markets. We further divide the emerging markets into two groups as oil-exporting and oil-importing countries. For the oil market, we use both the West Texas Intermediate (WTI) and Brent oil daily price movements. While the Granger-causality-in-mean tests indicate a causal link from WTI oil prices and G7 countries’ stock returns to MSCI emerging countries’ stock returns, the Granger-causality-in-variance tests suggest no causal link from global oil market prices to stock market returns. Nonetheless, a causal link from the G7 countries’ stock returns to the MSCI emerging countries’ stock returns is detected. In addition, G7 countries’ stock market volatility is found to Granger-cause Brent oil price volatility. The time-varying Granger-causality-in-mean and Granger-causality-in-variance tests present new and further insights. A causal relationship between oil price changes and G7 countries’ stock returns is found for some periods during and after the global financial crisis. Time-varying Granger-causality-in-variance test results indicate evidence of causal linkages among oil prices and global stock market returns that are specific only to certain time periods. We also find that there might be a difference between the movements in Brent and WTI oil prices with respect to their Granger-causal effects on oil-importing emerging markets’ stock returns—especially after the global financial crisis. Our results provide further evidence that the effects of oil price movements on stock returns might be different depending on the volatility in the stock markets. Full article

(This article belongs to the Special Issue Energy Markets and Economics)

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19 pages, 813 KiB

Open AccessArticle

The Good, the Bad and the Uncertain: Bioenergy Use in the European Union

by George Philippidis, Heleen Bartelings, John Helming, Robert M’barek, Edward Smeets and Hans Van Meijl

Energies 2018, 11(10), 2703; https://doi.org/10.3390/en11102703 - 11 Oct 2018

Cited by 20 | Viewed by 4130

Abstract

As the EU is moving towards a low carbon economy and seeks to further develop its renewable energy policy, this paper quantitatively investigates the impact of plausible energy market reforms from the perspective of bio-renewables. Employing a state-of-the-art biobased variant of a computable [...] Read more.

As the EU is moving towards a low carbon economy and seeks to further develop its renewable energy policy, this paper quantitatively investigates the impact of plausible energy market reforms from the perspective of bio-renewables. Employing a state-of-the-art biobased variant of a computable general equilibrium model, this study assesses the perceived medium-term benefits, risks and trade-offs which arise from an advanced biofuels plan, two exploratory scenarios of a more ‘sustainable’ conventional biofuels plan and a ‘no-mandate’ scenario. Consistent with more recent studies, none of the scenarios considered present significant challenges to EU food-security or agricultural land usage. An illustrative advanced biofuels plan simulation requires non-trivial public support to implement whilst a degree of competition for biomass with (high-value) advanced biomass material industries is observed. On the other hand, it significantly alleviates land use pressures, whilst lignocellulose biomass prices are not expected to increase to unsustainable levels. Clearly, these observations are subject to assumptions on technological change, sustainable biomass limits, expected trends in fossil fuel prices and EU access to third-country trade. With these same caveats in mind, the switch to increased bioethanol production does not result in significant market tensions in biomass markets. Full article

(This article belongs to the Special Issue Energy Markets and Economics)

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17 pages, 2421 KiB

Open AccessArticle

Total Cost of Ownership Based Economic Analysis of Diesel, CNG and Electric Bus Concepts for the Public Transport in Istanbul City

by Orhan Topal and İsmail Nakir

Energies 2018, 11(9), 2369; https://doi.org/10.3390/en11092369 - 07 Sep 2018

Cited by 51 | Viewed by 9913

Abstract

As across the world, in Turkey, several studies have been carried out by local government to use sustainable and 100% zero-emission public transport following increased public awareness. Increasing greenhouse gas emissions (GHG) due to transportation systems in the world make it necessary to [...] Read more.

As across the world, in Turkey, several studies have been carried out by local government to use sustainable and 100% zero-emission public transport following increased public awareness. Increasing greenhouse gas emissions (GHG) due to transportation systems in the world make it necessary to establish “zero-emission sustainable transportation systems” in Turkey. In this study, an economic analysis based on actual field data is presented for Istanbul Electricity, Tramway and Tunnel General Management (IETT) to seek the suitability of an electric bus concept for Istanbul conditions. For this purpose, a dynamic model based on the Total Cost of Ownership (TCO) from well to wheel has been proposed for the three groups of transportation, namely diesel, CNG (compressed natural gas) and electric buses. The data source used in the proposed approach is created by performing actual field performance tests for diesel, CNG and electric buses under real Istanbul road, time, and trip conditions. Afterwards, the Net Present Value (NPV), Internal Rate of Return (IRR), and Payback Period (PB) methods considering TCO values and updated unit prices are carried out for the investment versus profitability analyses to compare the different public bus concepts. The results show that the electric bus concept with a charging station depot achieving sustainable and zero-emission goals will be the driving force to advance the electric bus concept for Istanbul Public Transport. Full article

(This article belongs to the Special Issue Energy Markets and Economics)

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16 pages, 323 KiB

Open AccessArticle

The Effect of Renewable Energy Generation on the Electric Power Spot Price of the Japan Electric Power Exchange

by Jun Maekawa, Bui Hien Hai, Sarana Shinkuma and Koji Shimada

Energies 2018, 11(9), 2215; https://doi.org/10.3390/en11092215 - 24 Aug 2018

Cited by 13 | Viewed by 3793

Abstract

This study aims to explore the relationship between renewable energies and the electric power spot price of the Japan Electric Power Exchange (JEPX). By using panel data analysis and proxy modeling, this work attempts to estimate how renewable energies (displayed through the proxies) [...] Read more.

This study aims to explore the relationship between renewable energies and the electric power spot price of the Japan Electric Power Exchange (JEPX). By using panel data analysis and proxy modeling, this work attempts to estimate how renewable energies (displayed through the proxies) and other factors influence the electric power spot price in Japan. Based on an analysis of the estimations, some policy implications have been proposed, such as to incorporate weather information into the price forecast, or to provide a guide to more effectively transact on the JEPX. Full article

(This article belongs to the Special Issue Energy Markets and Economics)

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19 pages, 62541 KiB

Open AccessArticle

Economic Exposure to Oil Price Shocks and the Fragility of Oil-Exporting Countries

by Toon Vandyck, Alban Kitous, Bert Saveyn, Kimon Keramidas, Luis Rey Los Santos and Krzysztof Wojtowicz

Energies 2018, 11(4), 827; https://doi.org/10.3390/en11040827 - 03 Apr 2018

Cited by 22 | Viewed by 6106

Abstract

From a price range between 100 and 120 USD (U.S. dollars) per barrel in 2011–2014, the crude oil price fell from mid-2014 onwards, reaching a level of 26 USD per barrel in January 2016. Here we assess the economic consequences of this strong [...] Read more.

From a price range between 100 and 120 USD (U.S. dollars) per barrel in 2011–2014, the crude oil price fell from mid-2014 onwards, reaching a level of 26 USD per barrel in January 2016. Here we assess the economic consequences of this strong decrease in the oil price. A retrospective analysis based on data of the past 25 years sheds light on the vulnerability of oil-producing regions to the oil price volatility. Gross domestic product (GDP) and government revenues in many Gulf countries exhibit a strong dependence on oil, while more diversified economies improve resilience to oil price shocks. The lack of a sovereign wealth fund, in combination with limited oil reserves, makes parts of Sub-Saharan Africa particularly vulnerable to sustained periods of low oil prices. Next, we estimate the macroeconomic impacts of a 60% oil price drop for all regions in the world. A numerical simulation yields a global GDP increase of roughly 1% and illustrates how the regional impact on GDP relates to oil export dependence. Finally, we reflect on the broader implications (such as migration flows) of macroeconomic responses to oil prices and look ahead to the challenge of structural change in a world committed to limiting global warming. Full article

(This article belongs to the Special Issue Energy Markets and Economics)

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