irreversible investment with regime shifts under the real options approach to investment under uncertainty agents formulate optimal policies under the assumption that firms growth prospects do not vary over time this paper proposes and solves a model of investment decisions in which the growth rate and volatility of the decision variable shift between different states at random times a value maximizing investment policy is derived such that in each regime the firm s investment policy is optimal and recognizes the possibility of a regime shift under this policy investment is intermittent and increases with marginal q moreover investment typically is very small but in some states the capital stock jumps implications for marginal q and the user cost of capital are also examined

the impact of the new economic model on latin america s agriculture abstract this paper examines the changes in policy instruments and public institutions under the new economic model nem that have affected latin american agriculture with particular attention to brazil mexico and chile in general production has increased while acreage and rural employment have declined in many countries in the context of a shift from traditional to nontraditional products there has been a sharp reduction in the number of small farmers often accompanied by a greater inequality while the rural sector needs efficient public institutions the retreat of the state has left important gaps not yet filled by the private sector with negative consequences in particular for small producers

productivity growth catching up and uncertainty in china s meat trade abstract the potential role of china as a major importer of agricultural products and the likely impact on world markets has been a topic of considerable debate over the past decade in this paper we focus specifically on the livestock sector and develop a detailed analysis of productivity growth in china s pig and poultry production along with projections of china s likely meat trade in the year 2010 we use a general equilibrium model which permits us to explore the sensitivity of our projections to macro economic uncertainty as well as uncertainty in livestock productivity growth rates our analysis shows that china s net trade position is very sensitive to both of these factors with high livestock productivity growth and a slow down in the rest of the economy china could be a substantial competitor in export markets by 2010 on the other hand slow productivity growth in livestock production coupled with a rapidly growing macro economy could transform china into a major market for future meat exports

optimal storage operation under demand charge we study the optimal operation of energy storage operated by a consumer who owns intermittent renewable generation and faces possibly random fluctuating electricity prices and demand charge we formulate the optimal storage operation problem as a finite horizon dynamic program with an objective of minimizing the expected total cost the sum of energy cost and demand charge the incorporation of demand charge faces the consumer with more complicated trade offs on storage operation e g discharging the storage when the energy price is relatively low may not save energy cost but could help to save the demand charge if the net demand is high we establish an important threshold structure for an optimal storage operation policy which enables us to implement the optimal policy in realistic settings with random electricity prices numerical results demonstrate that the characterized optimal threshold policy significantly outperforms the policy that is shown to be optimal without demand charge in the literature even at a low demand charge rate 6 kw

output input and productivity measurement in u s agriculture 1948 79 tornqvist theil indexes of outputs and inputs are constructed these data are used to construct indexes of productivity growth over the postwar period the productivity indexes can be derived from a flexible multioutput multifactor representation of the structure of production constrained to constant returns to scale total factor productivity grew at an average annual rate of 1 75 compared with 1 70 per year estimated by the u s department of agriculture the similar estimates of productivity growth overshadow some important differences in measurement of individual inputs the major effort in measuring agricultural productivity is undertaken by the u s department of agriculture usda an american agricultural economics association task force on measuring productivity has examined the sources and procedures used in constructing the official statistics see loomis and barton lambert barton and durost the task force recommended that the usda adopt a series of specific improvements for constructing certain inputs and use an indexing procedure that does not impose a priori restrictions on the structure of production 1 this paper presents revised indexes of outputs and inputs the data are used to construct indexes of productivity growth over the postwar period the productivity indexes can be derived from a flexible multioutput multifactor representation of the structure of production the translog transformation function constrained to constant returns to scale 2 the indexes of outputs and inputs have the same form and their ratio coincides with the estimate of productivity growth

electricity trading and negative prices storage vs disposal electricity cannot yet be stored on a large scale but technological advances leading to cheaper and more efficient industrial batteries make grid level storage of electricity surpluses a natural choice because electricity prices can be negative it is unclear how the presence of negative prices might affect the storage policy structure known to be optimal when prices are only nonnegative or even how important it is to consider negative prices when managing an industrial battery for fast storage a storage facility that can both be fully emptied and filled up in one decision period we show analytically that negative prices can substantially alter the optimal storage policy structure e g all else being equal it can be optimal to empty an almost empty storage facility and fill up an almost full one for more typical slow grid level electricity storage we numerically establish that ignoring negative prices could result in a considerable loss of value when negative prices occur more than 5 of the t

valuation of commodity based swing options in the energy markets in particular the electricity and natural gas markets many contracts incorporate flexibility of delivery options known as swing or take or pay options subject to daily as well as periodic constraints these contracts permit the option holder to repeatedly exercise the right to receive greater or smaller amounts of energy we extract market information from forward prices and volatilities and build a pricing framework for swing options based on a one factor mean reverting stochastic process for energy prices that explicitly incorporates seasonal effects we present a numerical scheme for the valuation of swing options calibrated for the case of natural gas

technological change rediscovering the engine of productivity growth in china s rural economy abstract this paper focuses on measuring the relative importance of the role of technology versus that of institutional innovation in china s rural economy a six equation rice sector model explaining provincial level technology adoption yield and factor demand are econometrically estimated using data from china s 13 rice growing provinces for the period 1975 1990 growth decomposition analysis identifies technology adoption as the most important determinant of rice yield growth during 1978 1984 accounting for nearly 40 percent the change institutional reform accounted for 35 percent of the growth in 1985 1990 technology accounts for all of the increase in rice yields the study demonstrates earlier studies may have over estimated the impact of decollectivization

resilience in the dynamics of economy environment systems the ecological concept of resilience has begun to inform analysis of change in economy environment systems the linkages between resilience and the stability of dynamical systems are discussed along with its role in understanding of the evolution of such systems particular linkages discussed include those between resilience biodiversity and the sustainability of alternative states recent developments in modelling the resilience of joint economy environment systems suggest the advantages of analysing change in the system as a markov process the transition probabilities between states offering a natural measure of the resilience of the system in such states it is argued that this emergent property of the collaboration between ecology and economics has far reaching implications for the way we think about model and manage the environmental sustainability of economic development

productivity growth and convergence in crop ruminant and non ruminant production measurement and forecasts there is considerable interest in projections of future productivity growth in agriculture whether one is interested in the outlook for global commodity markets future patterns of international trade or the interactions between land use deforestation and ecological diversity the rate of productivity growth in agriculture is an essential input yet solid projections for this variable have proven elusive particularly on a global basis this is due in no small part to the difficulty in measuring historical productivity growth the purpose of this paper is to report the latest time series evidence on total factor productivity growth for crops ruminants and non ruminant livestock on a global basis we then follow with tests for convergence amongst regions providing forecasts for farm productivity growth to the year 2040 the results suggest that most regions in the sample are likely to experience larger productivity gains in livestock than in crops within livestock the non ruminant sector is expected to continue to be more dynamic than the ruminant sector given the rapid rates of productivity growth observed recently non ruminant and crop productivity in developing countries may be converging to the productivity levels of developed countries for ruminants the results show that productivity levels may be diverging between developed and developing countries

options in the real world lessons learned in evaluating oil and gas investments many firms in the oil and gas business have long used decision analysis techniques to evaluate exploration and development opportunities and have looked at recent development in option pricing theory as potentially offering improvements over the decision analysis approach unfortunately it is difficult to discern the benefits of the options approach from the literature on the topic most of the published examples greatly oversimplify the kinds of projects encountered in practice and comparisons are typically made to traditional discounted cash flow analysis which unlike the option pricing and decision analytic approaches does not explicitly consider the uncertainty in project cash flows in this paper we provide a tutorial introduction to option pricing methods focusing on how they relate to and can be integrated with decision analysis methods and describe some lessons learned in using these methods to evaluate some real oil and gas investments

ldc agriculture nonparametric malmquist productivity indexes abstract this paper examines changes in agricultural productivity in 18 developing countries over the period 1961 1985 we use the nonparametric output based malmquist index to examine whether the results from such an approach confirm results from other methods that have indicated declining agricultural productivity in less developed countries ldcs the results confirm previous findings indicating that at least half of these countries have experienced productivity declines in agriculture we also found that those countries that tax agriculture most heavily had the most negative rates of productivity change

optimal commodity trading with a capacitated storage asset this paper considers the so called warehouse problem with both space and injection withdrawal capacity limits this is a foundational problem in the merchant management of assets for the storage of commodities such as energy sources and natural resources when the commodity spot price evolves according to an exogenous markov process this work shows that the optimal inventory trading policy of a risk neutral merchant is characterized by two stage and spot price dependent basestock targets under some assumptions these targets are monotone in the spot price and partition the available inventory and spot price space in each stage into three regions where it is respectively optimal to buy and inject do nothing and withdraw and sell in some cases of practical importance one can easily compute the optimal basestock targets the structure of the optimal policy is nontrivial because in each stage the merchant s qualification of high selling and low buying commodity prices in general depends on the merchant s inventory availability this is a consequence of the interplay between the capacity and space limits of the storage asset and brings to light the nontrivial nature of the interface between trading and operations a computational analysis based on natural gas data shows that mismanaging this interface can yield significant value losses moreover adapting the merchant s optimal trading policy to the spot price stochastic evolution has substantial value this value can be almost entirely generated by reacting to the unfolding of price uncertainty that is by sequentially reoptimizing a model that ignores this source of uncertainty

integrated optimization of procurement processing and trade of commodities we consider the integrated optimization problem of procurement processing and trade of commodities in a multiperiod setting motivated by the operations of a prominent commodity processing firm we model a firm that procures an input commodity and has processing capacity to convert the input into a processed commodity the processed commodity is sold using forward contracts while the input itself can be traded at the end of the horizon we solve this problem optimally and derive closed form expressions for the marginal value of input and output inventory we find that the optimal procurement and processing decisions are governed by price dependent inventory thresholds we use commodity markets data for the soybean complex to conduct numerical studies and find that approximating the joint price processes of multiple output commodities using a single composite output product and using the approximate price process to determine procurement and processing decisions is near optimal compared to a myopic spread option based heuristic the optimization based dynamic programming policy provides significant benefits under conditions of tight processing capacities and high price volatilities finally we propose an approximation procedure to compute heuristic policies and an upper bound to compare the heuristic against when commodity prices follow multifactor processes

agricultural productivity revisited this paper describes production accounts for agriculture output is defined as gross production leaving the farm as opposed to real value added inputs are not limited to capital and labor but include intermediate inputs as well we derive index numbers of gross output capital labor and intermediate inputs these data are used to construct indexes of total factor productivity we then compare the contributions of input growth and productivity growth to economic growth the important role of productivity growth in agriculture becomes immediately apparent

testing long run productivity models for the canadian and u s agricultural sectors the primary objective of this paper is to develop the linkages between the gross and net productivity indexes and the implied production structures these linkages are developed as separability restrictions on various subgroups of inputs and time in a general production model the restricted models are arranged in sequences for nested hypotheses testing empirical evidence from the u s and canadian agricultural sectors based on a translog production function support the gross output total factor productivity structure the net output hicks neutrality hypothesis is rejected for both the united states and canada

valuation of storage at a liquefied natural gas terminal the valuation of the real option to store liquefied natural gas lng at the downstream terminal of an lng value chain is an important problem in practice because the exact valuation of this real option is computationally intractable we develop a novel and tractable heuristic model for its strategic valuation that integrates models of lng shipping natural gas price evolution and inventory control and sale into the wholesale natural gas market we incorporate real and estimated data to quantify the value of this real option and its dependence on the throughput of an lng chain the type of price variability the type of inventory control policy employed and the level of stochastic variability in both the shipping model and the natural gas price model used in addition we develop an imperfect information dual upper bound to assess the effectiveness of our heuristic and find that our method is near optimal our approach also has potential relevance to value the real option to store other commodities in facilities located downstream from a commodity production or transportation stage such as petroleum and agricultural products chemicals and metals or the real option to store the input used in the production of a commodity such as electricity

the role of thermodynamics in the study of economic and ecological systems abstract economic theory has always maintained that economic value is generated solely within the economy where it is fully distributed among the factors of production before being consumed according to this theory the economy is an isolated system that does not need flows to pass across its boundaries in support of its steady state general equilibrium from a thermodynamic point of view this idea is unacceptable according to thermodynamic theory any open system which allows flows of matter and energy to cross its boundaries is capable of maintaining itself in steady state only because it transport value from its environment to restore the value that has been consumed within the system and dissipated drawing on the analogy with thermodynamics this paper replaces the traditional systemic analog of the economy which is the closed circular flow process with the steady flow process according to this analog any efficient economy is an open system both physically and economically requiring a flow of economic value to maintain its steady state in other words an economically isolated system has to be inefficient and is bound to misallocate and overuse environmental resources whether the economy behaves as an economically isolated inefficient or open efficient system is an empirical question however if real economies are economically open and efficient and environmental resources are abused due to the economy s unrestrained material growth parts of traditional economic theory espicially those related to benefit evaluation will have to be modified policy recommendations will be affected in any case because internalization the panacea of resource misallocations cannot be more than a temporary solution instead of opening the economy internalization encloses the harmed resource and saves it by abusing excessively other environmental resources

economy and environment a theoretical essay on the interdependence of economic and environmental systems preface notation guide 1 introduction part i the physical economy environment system 2 closed physical systems a model 3 structure and time in the physical system 4 technological change and the environmental constraints to physical growth part ii the economic system 5 the price system 6 prices property and the environment 7 economic conflict and environmental change part iii environmental strategies in an evolutionary economy environment system 8 time uncertainty and external effects 9 the market solution 10 the stationary state 11 conclusions references index

is agricultural productivity in developing countries really shrinking new evidence using a modified nonparametric approach abstract nonparametric productivity analyses performed to date show that most developing countries are experiencing relatively rapid technical regress in agriculture we discuss the plausibility of these results and argue that they stem from the existence of biased technical change and the definition of technology used we reestimate the malmquist index for a group of developing countries using a different definition of technology and find that most developing countries in our sample are experiencing positive productivity growth with technical change being the main source of this growth

impact of electricity pricing policies on renewable energy investments and carbon emissions we investigate the impact of pricing policies i e flat pricing versus peak pricing on the investment levels of a utility firm in two competing energy sources renewable and conventional with a focus on the renewable investment level we consider generation patterns and intermittency of solar and wind energy in relation to the electricity demand throughout a day industry experts generally promote peak pricing policy as it smoothens the demand and reduces inefficiencies in the supply system we find that the same pricing policy may lead to distinct outcomes for different renewable energy sources due to their generation patterns specifically flat pricing leads to a higher investment level for solar energy and it can lead to still more investments in wind energy if a considerable amount of wind energy is generated throughout the day we validate these results by using electricity generation and demand data of the state of texas we also show that flat pricing can lead to substantially lower carbon e

towards an ecological economics of sustainability abstract persistent disagreement both as to the interpretation to be given to sustainability and as to the relation between ecological and economic sustainability has hindered the development of an ecological economics of sustainable resource use this paper identifies the main concepts of sustainability deriving from the two disciplines in order to explore the difference implied by an ecological approach to the problem it is argued that present economic and ecological approaches are largely disjoint and that they address basically different phenomena by combining the efficiency requirements of what is usually thought of as economic sustainability with the stability requirements of an ecological approach it is shown that an intertemporally efficient allocation of resources that satisfies the conditions for constant levels of consumption is not necessary to assure ecological sustainability ecological sustainability requires that the allocation of economic resources should not result in the instability of the economy environment system as a whole

estimating the value of electricity storage in pjm arbitrage and some welfare effects significant increases in prices and price volatility of natural gas and electricity have raised interest in the potential economic opportunities for electricity storage in this paper we analyze the arbitrage value of a price taking storage device in pjm during the six year period from 2002 to 2007 to understand the impact of fuel prices transmission constraints efficiency storage capacity and fuel mix the impact of load shifting for larger amounts of storage where reductions in arbitrage are offset by shifts in consumer and producer surplus as well as increases in social welfare from a variety of sources is also considered

estimation of multicrop production functions this paper considers whether separability or nonjointness is the better approach for attaining tractability for multicrop production function estimation characteristics of agricultural production associated with allocated inputs physical constraints and output determination imply sufficient nonjointness for estimation whereas separability is less plausible the paper also addresses estimation of production functions with allocated inputs where allocations are not observed and demonstrates a proposed approach by way of example

regime shifts and management regime shifts are substantial reorganizations in system structure functions and feedbacks which can lead to changes in the provision of ecosystem services with significant impacts on human well being recent research has documented cases of regime shifts in local and regional systems and there is mounting concern about regime shifts of global significance in this paper we discuss management of social ecological systems in light of the potential for regime shift management that increases system resilience and lowers the probability of regime shifts is beneficial when regime shifts are likely to reduce human well being it may not always be possible to avoid harmful regime shifts so building capacity to adapt should a regime shift occur is beneficial too adaptive management can help reduce uncertainty about the likelihood of regime shifts how this likelihood can be affected by management action and the impact of regime shifts on well being linking scientific understanding with decision making is important but distributional consequences can impede decision making and action

rural reforms and agricultural growth in china this paper employs province level panel data to assess the contributions of decollectivization price adjustments and other reforms to china s agricultural growth in the reform period decollectivization is found to improve total factor productivity and to account for about half of the output growth during 1978 84 the adjustment in state procurement prices also contributed positively to output growth its impact came mainly from the responses in input use the effect of other market related reforms on productivity and output growth was very small reasons for slowdown in agricultural growth after 1984 are also analyzed copyright 1992 by american economic association

efficiency of a fixed but allocatable input a non parametric approach the traditional non parametric or dea models measure efficiency for given inputs and outputs without allowing for reallocation of inputs these models do not look inside the technology but rather treat it as a black box in this paper we open up the box by modeling the possibility of reallocation of a fixed input

modeling adaptation in multi state resource systems a current concern in the economics of natural resources is the role of adaptation in moderating the economic impact of exogenous changes in the resilience of natural resource systems we develop a bioeconomic model of the exploitation of a renewable resource that can exist in multiple states we then use this to consider the value of adaptive over non adaptive policies when there is a change in state and there are fixed costs of starting or stopping extraction we take adaptive policies to be those that base extraction on the current state of the system and the conditioning effect that has on the expected future state of the system we take non adaptive policies to be those that base extraction on the long run average state of the system we find that whether adaptive or non adaptive policies dominate depends on the fixed costs of starting or stopping extraction if the fixed costs of closure are very low non adaptive policies dominate however if the fixed costs of closure are high adaptive policies are preferred we use a numerical example based on the peruvian anchoveta fishery to illustrate the results

private sector incentives and the diffusion of agricultural technology evidence from developing countries abstractthe role of intellectual property rights iprs has been extensively debated in the literature on technology transfers and agricultural productivity growth in developing countries however few studies offer cross country evidence on how iprs affect yield growth by incentivising private sector investment in cultivar improvement we address this knowledge gap by testing technology diffusion patterns for six major crops using a unique dataset for the period 1961 2010 and an arellano bond linear dynamic panel data estimation approach findings indicate that biological and legal forms of iprs promote yield gap convergence between developed and developing countries although effects vary by crop

is certainty in carbon policy better than uncertainty abstract uncertainty in the strictness of carbon policy can have significant impacts on power generating firms capacity investment decisions and market outcomes we investigate the effects of this policy uncertainty on firms expected profits consumers surplus and firms cost for reaching a co 2 emission target our results derived from a game theoretical model and applied to realistic data indicate that uncertainty in the carbon policy induces more capacity investments in fossil and renewable technologies we find that it is optimal for firms with higher risk aversion to invest more in renewable technologies than their less risk averse rivals for policy makers our results suggest counter intuitively that retaining the flexibility to update emission targets whilst causing uncertainty in the carbon policy is beneficial this is because it provides higher expected consumer surplus and lower expected electricity price power generating firms are also better off under the policy uncertainty by having lower expected costs for reaching the emission goal and higher expected profits when firms risk aversions are low these results support the approach employed in european power markets to periodically update the co 2 emission cap depending on the prevailing circumstances rather than having certainty in the decrements of the caps over a longer time horizon our insights can help policy makers and firms to make better decisions by understanding how carbon policy uncertainty impacts the optimal capacity investments and how these investments might depend on the firms heterogeneity in risk aversion

recovering output specific inputs from aggregate input data a generalized cross entropy approach for multiproduct firms data on aggregate input usage are typically available but data on activity specific inputs are not the present study proposes a generalized cross entropy approach to estimate activity specific input allocations that are consistent with the aggregate information the proposed method does not require behavioral assumptions e g profit maximization but does accommodate behavioral restrictions as well as nonsample information about the plausible factor shares across enterprises monte carlo experiments using simulated data for multifactor multiproduct firms are used to evaluate the performance of the proposed method

wind power integration and power system flexibility an empirical analysis of extreme events in germany under the new negative price regime abstract in this article the flexibility of the german power market with respect to the integration of an increasing share of electricity from renewable energy sources was analysed flexibility limiting system components which cause negative prices are explained and illustrated for the german market the decision of the european energy exchange in leipzig to allow negative price bids is then explained the empirical data illustrate the flexibility of conventional generating capacities in germany from october 2008 to december 2009 of the 86 h of negative spot prices 19 h were significantly negative with prices of at least 100 mwh these extreme hours were analysed in greater detail by the examination of different system components thereby load wind power infeed and conventional generation by fuel type were observed as well as the market for negative tertiary reserve as indicators for market tightness although the market situations were found to be severe under the current conditions it could have been much worse in order to enable the market to clear at all times policy recommendations are provided and long run implications of an increasing res e share on the conventional generation capacity are discussed the article concludes with an outlook on additional power system flexibility options

agricultural productivity in developing countries abstract this paper examines changes in agricultural productivity in 18 developing countries over the period 1961 1985 we use a nonparametric output based malmquist index and a parametric variable coefficients cobb douglas production function to examine whether our estimates confirm results from other studies that have indicated declining agricultural productivity in ldcs the results confirm previous findings indicating that at least half of these countries have experienced productivity declines in agriculture

when energy storage reduces social welfare this paper examines the potential welfare effects of storage under different market structures this includes combinations of perfectly competitive and strategic generation and storage sectors and standalone and generator owned storage we demonstrate that if the generation sector is perfectly competitive and does not own storage then storage cannot be welfare diminishing otherwise generator owned storage or standalone storage in a market with strategic generating firms can reduce welfare compared to the no storage case this contradicts conventional wisdom that adding firms to an imperfectly competitive market typically reduces welfare losses

how to deal with negative power price spikes flexible voluntary curtailment agreements for large scale integration of wind for the large scale integration of electricity from renewable energy sources res e the german system seems to reach its limits in 2009 the electricity wholesale market experienced serious negative prices at times of high wind and low demand the feed in system in germany consists of a fixed feed in price a take off obligation and a res priority rule and in practice only very restrictive use of res e curtailment exactly the latter is the problem we argue that the overall performance of the system would improve seriously by lifting the restrictions on the use of voluntary curtailment agreements while retaining the priority rule as such since generators of res e can only improve under this system reform investment conditions improve leading to higher installed res e capacity this in turn implies that reduced wind output due to curtailment can actually be offset by higher wind output in all periods in which there is no problem

bridging the gap between partial and total factor productivity measures using directional distance functions technical dependencies as well as data constraints limit our ability to allocate inputs across sectors and hence our ability to measure sectoral productivity we adapt a directional measure of efficiency to the measurement of sector specific productivity that does not require allocating all inputs across sectors applied to the agricultural sector of a group of countries the results show important differences in livestock and crops productivity growth commonly used partial factor productivity measures for livestock and crops tend to overestimate productivity growth in most developing countries while underestimating it in european countries

productivity growth technical progress and efficiency change in industrialized countries this paper analyzes productivity growth in 17 oecd countries over the period 1979 1988 a nonparametric programming method activity analysis is used to compute malmquist productivity indexes these are decomposed into two component measures namely technical change and efficiency change we find that u s productivity growth is slightly higher than average all of which is due to technical change japan s productivity growth is the highest in the sample with almost half due to efficiency change jel c43 d24 in this paper we apply recently developed

livestock in china commodity specific total factor productivity decomposition using new panel data studies of total factor productivity tfp in livestock production are rare but when available provide useful information especially in the context of developing countries such as china where livestock is becoming more important in the domestic agricultural economy we estimate tfp for four major livestock products in china employing the stochastic frontier approach and decompose productivity growth into its technical efficiency te and technical progress components efforts are made to adjust and augment the available livestock statistics the results show that growth in tfp and its components varied between the 1980s and the 1990s as well as over production structures while there is evidence of considerable technical innovation in china s livestock sector te improvement has been relatively slow

optimal fishery management with regime shifts an assessment of harvesting strategies this paper compares outcomes from informed and uninformed harvesting strategies for a fish stock with switching dynamics where the probability of switching is influenced by climate using data on sea surface temperature anomalies the impacts of climate on the conservation and the welfare that can be extracted from the stock are investigated results indicate that an informed management policy leads to stock biomass and resource rents that are up to 2 7 and 2 times higher respectively than under an uninformed policy also the fishery is open 54 longer under the informed policy the magnitude of these effects depends on the choice of the discount rate indicating that when the future is highly discounted gains from the informed policy dissipate

economics of electric energy storage for energy arbitrage and regulation in new york unlike markets for storable commodities electricity markets depend on the real time balance of supply and demand although much of the present day grid operates effectively without storage cost effective ways of storing electrical energy can help make the grid more efficient and reliable we investigate the economics of two emerging electric energy storage ees technologies sodium sulfur batteries and flywheel energy storage systems in new york state s electricity market the analysis indicates that there is a strong economic case for ees installations in the new york city region for applications such as energy arbitrage and that significant opportunities exist throughout new york state for regulation services benefits from deferral of system upgrades may be important in the decision to deploy ees market barriers currently make it difficult for energy limited ees such as flywheels to receive revenue for voltage regulation charging efficiency is more important to the economics of ees in a competitive electricity market than has generally been recognized