| 1. |
- Adom, Philip Kofi, et al.
(författare)
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Energy efficiency as a sustainability concern in Africa and financial development: How much bias is involved?
- 2023
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Ingår i: Energy Economics. - : Elsevier. - 0140-9883 .- 1873-6181. ; 120
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Tidskriftsartikel (refereegranskat)abstract
- This study contributes to the literature on whether financial development stimulates technical energy efficiency (TEE) or not, by addressing core biases that creep into the relationship and thereby reducing the ability to draw causal inferences from financial development to TEE. Our approach is based on the instrumental stochastic frontier technique, where biases in the frontier and inefficiency equations are dealt with using external instrumental variables. The legal system origin of the country and life expectancy at birth were used as instruments for financial development and income, respectively. The current study demonstrates substantial bias in income elasticity, the estimate of energy efficiency, and the effect of financial development on energy efficiency. Both income elasticity and energy efficiency estimate risk upward bias. Equally, the effect of financial system development and financial institution development on TEE risk downward bias. Other results show that all aspects of financial institution development stimulate TEE, but access to financial institutions is more important. These results raise caution about future studies' estimates of the effect of financial development on TEE. Though this study has demonstrated the potency of external instruments in dealing with the bias in the coefficient estimates, we consider this might prove to be a luxury solution in some cases due to data limitation, context differences, and theory. In those circumstances, reliance on internal instruments might prove to be the second-best option.
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| 2. |
- Aguilar Cabezas, Francisco X
(författare)
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Feasibility of satisfying projected biopower demands in support of decarbonization interventions: A spatially-explicit cost optimization model applied to woody biomass in the eastern US
- 2024
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Ingår i: Energy Economics. - 0140-9883 .- 1873-6181. ; 136
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Tidskriftsartikel (refereegranskat)abstract
- Power generation from biomass (biopower) has experienced substantial growth in the United States. Although renewable and sustainably sourced biopower can reduce the carbon footprint of the electricity sector, there is a scarcity of analyses that simultaneously consider the financial feasibility and sustainability criteria of procured biomass. We developed a spatially -explicit optimization model to minimize the cost of meeting projected biopower demand while ensuring carbon neutrality and biomass sustainability constraints. The optimization model was applied to projected biopower demand scenarios in the eastern US, considering various public policy decarbonization interventions. Modeling woody biomass procured from local forests as the source of biopower was chosen due to its dominant role as a renewable energy source, regional availability, and lower risk of violating carbon neutrality objectives. Initially, we projected the net growth of woody biomass in trees and their carbon pools by 2035, as a function of biopower generation, utilizing data from 2009-2017. Subsequently, forecasted woody biomass and projected biopower demand through 2035 were employed to determine optimal levels of biopower generation and estimate the corresponding resource impacts within procurement forests. The results suggest the potential for substantial increases in sustainable biopower generation in the eastern US. However, the feasibility of this expansion depends on the continued economic viability of biopower generation in the future. It is worth noting that the largest increases, surpassing threefold, in biopower generation over the 2020-2030 decade could potentially compromise the carbon neutrality of locally procured woody biomass.
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| 3. |
- Aguilar Cabezas, Francisco X
(författare)
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Localized economic contributions of renewable wood-based biopower generation
- 2020
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Ingår i: Energy Economics. - : Elsevier BV. - 0140-9883 .- 1873-6181. ; 91
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Tidskriftsartikel (refereegranskat)abstract
- We assessed the role of renewable wood-based biopower generation in supporting local economies by deriving multiplier effects from a sample of U.S. power plants representing 348.3 MW of installed capacity (1.2 million MWh of power generation for 2016) with annual expenditures of over US$117 million. Average annual employment, labor income, value-added, and gross output values associated with the generation of wood-based power were contrasted with those from power generated from coal and natural gas. Economic multiplier effects of localized operation and maintenance expenditures were derived following an input-output analysis. Results, expressed in 2017 US$. show the economic contribution of wood-based biopower was lower (US$123.96 per MWh) than power generated from coal (US$386.55 per MWh) and natural gas (US$989.79 per MW). However, wood-based biopower value-added localized multiplier effects were nearly 20% higher than coal-based power, at US$2.80 per dollar spent in operation and maintenance. Our findings suggest that, after considering sustainability thresholds for woody biomass availability, its expanded utilization could contribute between US$5.00 billion to US$22.00 billion in value-added to local economies across the US. (C) 2020 Elsevier B.V. All rights reserved.
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| 4. |
- Ahmad, Wasim, et al.
(författare)
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On the intraday dynamics of oil price and exchange rate: What can we learn from China and India?
- 2020
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Ingår i: Energy Economics. - : ELSEVIER. - 0140-9883 .- 1873-6181. ; 91
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Tidskriftsartikel (refereegranskat)abstract
- The main aim of this paper is to investigate the volatility determinants of crude oil and foreign exchange markets and jump spillover between them. We consider currencies of two major oil-importing countries (India and China) over the sample period of January 1.2013 to October 31, 2019. We find evidence of positive return spillover from the oil to the foreign exchange market; however, there is a lack of return spillover in the other direction. Oil jumps appear to have a negative impact on exchange rate conditional volatility, and the latter responds asymmetrically to disentangled (positive and negative) oil price jumps. We also report disentangled exchange rate jumps significant impact on conditional oil price volatility. These results, however, are asymmetric based on the nature of jumps and alternative oil price series. Finally, we do not find evidence of co-jump between the oil and foreign exchange markets. These results have important implications for investors and policymakers. (C) 2020 Elsevier B.V. All rights reserved.
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| 5. |
- Akyildirim, Erdinc, et al.
(författare)
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Connectedness of energy markets around the world during the COVID-19 pandemic
- 2022
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Ingår i: Energy Economics. - : ELSEVIER. - 0140-9883 .- 1873-6181. ; 109
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Tidskriftsartikel (refereegranskat)abstract
- This paper studies the connectedness among energy equity indices of oil-exporting and oil-importing countries around the world. For each country, we construct time-varying measures of how much shocks this country transmits to other countries and how much shocks this country receives from other countries. We analyze the network of countries and find that, on average, oil-exporting countries are mainly transmitting shocks, and oil-importing countries are mainly receiving shocks. Furthermore, we use panel data regressions to evaluate whether the connectedness among countries is influenced by economic sentiment, uncertainty, and the global COVID-19 pandemic. We find that the connectedness among countries increases significantly in periods of uncertainty, low economic sentiment, and COVID-19 problems. This implies that diversification benefits across countries are severely reduced exactly during crises, that is, during the times when diversification benefits are most important.
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| 6. |
- Akyildirim, Erdinc, et al.
(författare)
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How connected is the agricultural commodity market to the news-based investor sentiment?
- 2022
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Ingår i: Energy Economics. - : ELSEVIER. - 0140-9883 .- 1873-6181. ; 113
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Tidskriftsartikel (refereegranskat)abstract
- Previous studies indicate a substantial time-variation in the co-movement of commodity futures markets and economic fundamentals. This paper examines the connectedness and directional spillovers for both the agricultural commodity futures markets and the corresponding sentiment indices. We first construct dynamic time-varying connectedness measures both for the agricultural commodity returns and sentiments. Then, we use panel data regressions and time-varying Granger causality tests to evaluate whether the spillovers between these returns and sentiments are influenced by the economic and financial uncertainties, including the global COVID-19 pandemic. In particular, we document that the COVID-19 induced uncertainty influences agricultural commodity returns and sentiments significantly around the first cycle of the pandemic in 2020. Last but not least, economic policy and financial market uncertainty are also found to be significant determinants of the connectedness between agricultural commodity returns and sentiment spillovers.
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| 7. |
- Armerin, Fredrik
(författare)
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A Comment on "The effectiveness of carbon pricing : The role of diversification in a firm's investment decision"
- 2024
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Ingår i: Energy Economics. - : Elsevier. - 0140-9883 .- 1873-6181. ; 132
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Tidskriftsartikel (övrigt vetenskapligt/konstnärligt)abstract
- We show that the set of parameter values satisfying the constraints, needed in order to make the stopping rule used in the extended model in Compernolle et al. (2022) an optimal one, is empty. Using the stopping rule in their paper will result in a strictly smaller stopping time than the optimal stopping time. It follows that the stopping rule used in Compernolle et al. (2022) will result in a lower bound of the expected time until an investment is done.
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| 8. |
- Berry, Carl, et al.
(författare)
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Income and fuel price elasticities of car use on micro panel data
- 2024
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Ingår i: Energy Economics. - : Elsevier. - 0140-9883 .- 1873-6181. ; 135:July
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Tidskriftsartikel (refereegranskat)abstract
- We estimate the income and fuel price elasticities of private car vehicle kilometres travelled (VKT) using fixed effects on registry micro panel data covering all Swedish households from 1999 to 2018. Such registry data, covering all individuals and cars in the country, are unique to Nordic countries and are comprehensive enough to allow fine segmentation of the population by both income groups and several municipality types. To address potential endogeneity arising if employees receive a wage compensation for long commutes, we apply the temporal changes in earned income tax credits as an instrumental variable. We find lower income and price elasticities (in absolute value) in the large cities, and larger elasticities in suburbs, other cities and in rural areas. We also find that the elasticities decrease with income, excluding the lowest income quartile, having the lowest elasticities. Specifically, we show theoretically and empirically that because the income elasticity varies considerably along the income distribution, the resulting income elasticity depends heavily on how the estimator assigns weight to different income groups, unless the specification explicitly allows for variation in the impact of income on VKT. Moreover, the impact of an income increase depends on to whom the income increase accrues to. For a uniform income increase, 0.2 is the preferred income elasticity. Our preferred long-run fuel price elasticity is −0.53. The short-run elasticities are lower. These elasticities apply to the full population and not only to car owners or drivers.
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| 9. |
- Biggar, Darryl R., et al.
(författare)
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An integrated theory of dispatch and hedging in wholesale electric power markets
- 2022
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Ingår i: Energy Economics. - : Elsevier BV. - 0140-9883 .- 1873-6181. ; 112
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Tidskriftsartikel (refereegranskat)abstract
- The literature on optimal dispatch of wholesale power systems implicitly assumes that market participants are risk-neutral. But, in practice, most wholesale electricity market participants behave as though they are risk averse, seeking to insulate themselves from the market risks they face. In this context, achieving the overall social-welfare maximum requires simultaneously finding both the optimal dispatch and optimal hedging arrangements. Assuming that market participants have mean-variance preferences, we show that the dispatch task can be separated from the hedging task. We show how market participants can achieve a perfect hedge by forming a portfolio of inter-temporal hedge contracts. Departing from the previous literature, we assume the system operator is risk averse. We show how the system operator can achieve a perfect hedge using a portfolio of inter-nodal hedging instruments which we refer to as generalised Financial Transmission Rights. The total risk experienced by market participants when optimally hedged is equal to the variation in the total surplus or total economic welfare. This approach therefore leads naturally to a form of merchant transmission investment where network upgrade decisions are carried out by a coalition of risk-bearers in the market. In addition, we propose a natural extension in which transmission network operators provide a form of insurance against network outages, and face the correct social incentive for avoiding network outages. This approach resolves a number of outstanding issues in the economic analysis of power markets.
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| 10. |
- Biggar, Darryl R., et al.
(författare)
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Welfare-maximising dispatch and pricing of water in a gravity-fed river network
- 2022
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Ingår i: Energy Economics. - : Elsevier BV. - 0140-9883 .- 1873-6181. ; 108
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Tidskriftsartikel (refereegranskat)abstract
- With increasing scarcity in water resources around the world, policy-makers are increasingly looking to water trading arrangements to ensure that available surface water is used as efficiently as possible. However, traded water must be able to be transported from its source to its point of use. In many real-world applications this transportation occurs over a gravity-fed river network. The physical characteristics of this network (such as the shape of weirs) determines how quickly water flows from point to point, as well as setting upper and lower limits on the rate of flow. The choice of the path of injections and extractions which maximises overall welfare must take into account these physical characteristics. This paper characterises the profile of water injections and extractions, and the corresponding path of prices, that maximises overall economic welfare, subject to the hydrology of a stylised river network. We illustrate the outcomes of the model in simple water networks, and show how even relatively simple changes in supply and demand conditions can lead to dynamic variation in the profile of prices and injection/extraction across the river system. We show how this model can act as the foundation for a smart market for water trading arrangements.
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