feebates rebates and gas guzzler taxes a study of incentives for increased fuel economy abstract us fuel economy standards have not been changed significantly in 20 years feebates are a market based alternative in which vehicles with fuel consumption rates above a pivot point are charged fees while vehicles below receive rebates by choice of pivot points feebate systems can be made revenue neutral feebates have been analyzed before this study re examines feebates using recent data assesses how the undervaluing of fuel economy by consumers might affect their efficacy tests sensitivity to the cost of fuel economy technology and price elasticities of vehicle demand and adds assessments of gas guzzler taxes or rebates alone a feebate rate of 500 per 0 01 gallon per mile gpm produces a 16 percent increase in fuel economy while a 1000 per 0 01 gpm results in a 29 percent increase even if consumers count only the first 3 years of fuel savings unit sales decline by about 0 5 percent but sales revenues increase because the added value of fuel economy technologies outweighs the decrease in sales in all cases the vast majority of fuel economy increase is due to adoption of fuel economy technologies rather than shifts in sales

consumer support for environmental policies an application to purchases of green cars this paper focuses on how consumer motivation can be tapped in order to encourage the adoption of cleaner technologies consumers are heterogeneous they may be guided by intrinsic motivation or extrinsic motivation while information provision policies such as the energy label for cars may be effective in encouraging certain consumers to adopt green cars financial incentive schemes such as subsidies or fines may be more persuasive for extrinsically motivated consumers we develop a dynamic theory of adoption of environmental innovations in which information provision policies are followed by financial incentives first carrot then stick incentives analysis of a survey dataset of swiss households observes considerable heterogeneity in terms of support of information provision or financial incentive policies in line with our conjectures our results will be of particular interest to policymakers interested in guiding consumers towards cleaner technologies

the crucial relationship among energy commodity prices evidence from the spanish electricity market the main purpose of this article is twofold to analyze a the long term relation among the commodities prices and between spot electricity market price and commodity prices and b the short term dynamics among commodity prices and between electricity prices and commodity prices data between 2002 and 2005 from the spanish electricity market was used econometric methods were used in the analysis of the commodity spot price namely the vector autoregression model the vector error correction model and the granger causality test the co integration approach was used to analyze the long term relationship between the common stochastic trends of four fossil fuel prices one of the findings in the long term relation is that the prices of fuel and the prices of brent are intertwined though the prices of brent ten to move to reestablish the price equilibrium another finding is that the price of electricity is explained by the evolution of the natural gas series

uncertainty avoidance and the preference for innovation championing roles this paper examines the preferences of 4405 individuals in forty three organizations from sixty eight different countries for four innovation championing roles the organizational maverick the network facilitator the transformational leader and the organizational buffer the study shows that the cultural value of uncertainty acceptance is significantly associated with preferences for these four championing roles it suggests that uncertainty accepting societies may be more innovative than uncertainty avoiding societies because of the greater legitimacy of those roles

assessing the rebound effect using a natural experiment setting evidence from the private transportation sector in israel subsidizing energy efficient technologies is considered by energy and environmental organizations to be one of the most effective policies for decreasing energy consumption in the transportation sector such policies are becoming ever more popular and have been implemented in a considerable number of countries in recent years because these policies promote energy efficient cars with lower usage costs they may rebound and increase the distances traveled by households that have switched to energy efficient cars from an econometric perspective a subsidization policy can be used as a valid instrument to identify the households choice of energy efficiency levels of the cars they own this identification in turn can be utilized to account for endogeneity in the estimation of a rebound effect the present study uses a natural experiment setting of such a policy implemented in israel in 2009 the empirical results indicate a fairly large average rebound effect of 40 the results also indicate that while the policy indeed encouraged the purchase of energy efficient cars households that bought a new or used car during the surveyed period did not generate a rebound effect of a different magnitude compared with other households that did not we discuss the implications of our findings

the asymptotic distribution of extreme stock market returns this article presents a study of extreme stock market price movements according to extreme value theory the form of the distribution of extreme returns is precisely known and independent of the process generating returns using data for an index of the most traded stocks on the new york stock exchange for the period 1885 1990 the author shows empirically that the extreme returns obey a frechet distribution copyright 1996 by university of chicago press

evaluating natural resource investments notwithstanding impressive advances in the theory of finance over the past 2 decades practical procedures for capital budgeting have evolved only slowly the standard technique which has remained unchanged in essentials since it was originally proposed see dean 1951 bierman and smidt 1960 derives from a simple adaptation of the fisher 1907 model of valuation under certainty under this technique expected cash flows from an investment project are discounted at a rate deemed appropriate to their risk and the resulting present value is compared with the cost of the project this standard textbook technique reflects modern theoretical developments only insofar as estimates of the discount rate may be obtained from crude application of single period asset pricing theory but see brennan 1973 bogue and roll 1974 turnbull 1977 constantinides 1978 the inadequacy of this approach to capital budgeting is widely acknowledged although not widely discussed its obvious deficiency is its the evaluation of mining and other natural resource projects is made particularly difficult by the high degree of uncertainty attaching to output prices it is shown that the techniques of continuous time arbitrage and stochastic control theory may be used not only to value such projects but also to determine the optimal policies for developing managing and abandoning them the approach may be adapted to a wide variety of contexts outside the natural resource sector where uncertainty about future project revenues is a paramount concern

a comparison of the effects of exogenous oil supply shocks on output and inflation in the g7 countries a comparison of the effects of exogenous shocks to global crude oil production on seven major industrialized economies suggests a fair degree of similarity in the real growth responses an exogenous oil supply disruption typically causes a temporary reduction in real gdp growth that is concentrated in the second year after the shock inflation responses are more varied the median cpi inflation response peaks after three to four quarters exogenous oil supply disruptions need not generate sustained inflation or stagflation typical responses include a fall in the real wage higher short term interest rates and a depreciating currency with respect to the dollar despite many qualitative similarities there is strong statistical evidence that the responses to exogenous oil supply disruptions differ across g7 countries for suitable subsets of countries homogeneity cannot be ruled out a counterfactual historical exercise suggests that the evolution of cpi inflation in the g7 countries would have been similar overall to the actual path even in the absence of exogenous shocks to oil production consistent with a monetary explanation of the inflation of the 1970s there is no evidence that the 1973 1974 and 2002 2003 oil supply shocks had a substantial impact on real growth in any g7 country whereas the 1978 1979 1980 and 1990 1991 shocks contributed to lower growth in at least some g7 countries jel e31 e32 q43

investment under uncertainty in information technology acquisition and development projects in this paper we develop two models for the valuation of information technology it investment projects using the real options approach the it investment projects discussed in this paper are categorized into development and acquisition projects depending upon the time it takes to start benefiting from the it asset once the decision to invest has been taken the models account for uncertainty both in the costs and benefits associated with the investment opportunity our stochastic cost function for it development projects incorporates the technical and input cost uncertainties of pindyck s model 1993 but also considers the fact that the investment costs of some it projects might change even if no investment takes place in contrast to other models in the real options literature in which benefits are summarized in the underlying asset value our model for it acquisition projects represents these benefits as a stream of stochastic cash flows

dependence and extreme dependence of crude oil and natural gas prices with applications to risk management abstract in this article we show how the copula garch approach can be appropriately used to investigate the conditional dependence structure between the crude oil and natural gas markets as well as to derive implications for portfolio risk management in extreme economic conditions using daily price data from january 1997 to october 2011 our in sample results show evidence of asymmetric dependence between the two markets the crude oil and gas markets tend to comove closely together during bullish periods but not at all during bearish periods moreover taking the extreme comovement into account leads to an improvement in the accuracy of the out of sample value at risk forecasts

asymmetric and nonlinear pass through of crude oil prices to gasoline and natural gas prices in this article we use the recently developed nonlinear autoregressive distributedlags nardl model to examine the pass through of crude oil prices into gasoline and natural gas prices our approach allowsus to simultaneously test the short and long run nonlinearities through positive and negative partial sum decompositions of the predetermined explanatory variables it also offers the possibility to quantify the respective responses of gasoline and natural gas prices to positive and negative oil price shocks from the asymmetric dynamic multipliers the obtained results indicate that oil prices affect gasoline prices and natural gas prices in an asymmetric and nonlinear manner but the price transmission mechanism is not the same important policy implications can be learned from the empirical findings

international experience on incentive program in support of fuel economy standards and labelling for motor vehicle a comprehensive review abstract the road transports especially the motor vehicles play a significant role in increment of energy consumption in the transportation sector however the harmful greenhouse gas ghg emissions from such vehicles which are the main causes of global warming have been increased as well one of the effective solutions to reduce the growth rate of energy consumption is the implementation of fuel economy standard and label other countries experiences indicate that the program is very beneficial for society environment and government the hierarchy of the program consists of the test procedure fuel economy standards fuel economy label and incentive program as a peak of the program reviews of the fuel economy standard can be found in many references however a few papers deal with the incentive program specifically therefore this paper aims to give a review on the implementation of the incentive program globally in support of fuel economy standard and label for the motor vehicles finally as the incentive program is necessary to support fuel economy standard and label it should be applied to the motor vehicles as soon as possible

red light for green paper the eu policy on energy efficiency the eu green paper on energy efficiency calls for action to decrease energy use and thus achieve increased competitiveness fulfil the environmental targets and increase security of supply in this comment we examine the role the eu commission suggest that energy efficiency and policies supporting energy efficiency takes the policies and the suggestions are qualitatively elaborated upon in the light of the goal of a common european electricity market we suggest that the rationales for the energy efficiency measures are weak and that the suggested goals of increased competitiveness environmental targets and security of supply are best reached with the direct measures especially designed for each goal some of the energy efficiency measures may counter act other direct policies further the green paper measures may prove detrimental to the european electricity market insofar as the policies suggested could lead to a policy fatigue among the electricity consumers

social acceptance of renewable energy innovation an introduction to the concept this paper introduces the special issue on social acceptance of renewable energy innovation it is a collection of best papers presented at an international research conference held in tramelan switzerland in february 2006 while there are ambitious government targets to increase the share of renewable energy in many countries it is increasingly recognized that social acceptance may be a constraining factor in achieving this target this is particularly apparent in the case of wind energy which has become a subject of contested debates in several countries largely due to its visual impact on landscapes this paper introduces three dimensions of social acceptance namely socio political community and market acceptance factors influencing socio political and community acceptance are increasingly recognized as being important for understanding the apparent contradictions between general public support for renewable energy innovation and the difficult realization of specific projects the third dimension market acceptance has received less attention so far and provides opportunities for further research particularly from management scholars

greening the vehicle fleet norway s co2 differentiated registration tax abstract in 2007 norway established its vehicle registration tax linked to vehicle co2 intensities in 2009 the tax was modified to a feebate structure but maintained its link to co2 intensities using a panel dataset to exploit the quasi experimental tax reforms we estimate that a 1000 nok 125 usd tax increment reduces new vehicle sales by 1 06 1 58 this result yields an elasticity of average co2 intensity to co2 price implied by the tax of 0 06 with a pass through of the tax to car prices of 88 the resulting elasticity of average co2 intensity to average car price is 0 53 thus the tax significantly shifts consumers toward lower emission vehicles our counterfactual simulations suggest that high emission vehicle segments lose market shares and become less co2 intensive while low emission vehicle segments gain market shares

international gas pricing in europe and asia a crisis of fundamentals abstract in continental europe and lng importing asia international gas prices reflect the market fundamentals of the 1970s 1990s when gas was replacing oil products and crude oil in energy balances by the end of the 2000s fundamentals in both these regions had changed significantly but gas price formation mechanisms had not this created major problems for buyers locked into long term contracts indexed to crude oil and oil product prices which had risen to levels far above gas market fundamentals by 2013 the transition to hub based pricing was well advanced in europe and dominant in the large markets in the north west of the continent in asia the crisis of fundamentals was only just starting to be addressed with a transition to market pricing an urgent imperative but still a distant prospect

asymmetric impacts of international energy shocks on macroeconomic activities while limited by its scarcity of natural resources the impacts of energy price changes on taiwan s economic activities have been an important issue for social public and government authorities this study applies the multivariate threshold model to investigate the effects of various international energy price shocks on taiwan s macroeconomic activity by separating energy price changes into the so called decrease and increase regimes we can realize different impacts of energy price changes and their shocks on economic output the results confirm that there is an asymmetric threshold effect for the energy output nexus the optimal threshold levels are exactly where the oil price change is at 2 48 the natural gas price change is at 0 66 and the coal price change is at 0 25 the impulse response analysis suggests that oil price and natural gas shocks have a delayed negative impact on macroeconomic activities 2012 published by elsevier ltd

value at risk estimations of energy commodities via long memory asymmetry and fat tailed garch models abstract in this paper we evaluate the value at risk var and the expected shortfalls for some major crude oil and gas commodities for both short and long trading positions classical var estimations as well as riskmetrics and other extensions to cases considering for long range memory asymmetry and fat tail in energy markets volatility were conducted we computed the var for three arch garch type models including figarch fiaparch and hygarch these models were estimated in the presence of three alternative innovation s distributions normal student and skewed student our results show that considering for long range memory fat tails and asymmetry performs better in predicting a one day ahead var for both short and long trading positions moreover the fiaparch model outperforms the other models in the var s prediction these results present several potential implications for energy markets risk quantifications and hedging strategies

corporate leaders in britain and america a cross national analysis this study tested for the extent of similarity between 1708 american senior vice presidents and those of 418 british counterparts the sample was drawn from the fortune 500 and the times 500 being representative of the top management teams of the largest national companies dominating domestic economies

a view from the macro side rebound backfire and khazzoom brookes abstract this paper attempts to delineate a few key insights extracted from theoretical macroeconomic considerations of the rebound issue the goal has been to reduce these thoughts to a clear set of assertions that if true would be useful points of reference in the ongoing discussion despite their non empirical nature

historical energy price shocks and their changing effects on the economy abstract the purpose of this paper is to identify the changes in the impact of energy shocks on economic activity with an interest in assessing if an economy s vulnerability and resilience to shocks improved with economic development using data on the united kingdom over the last three hundred years the paper identifies supply aggregate demand and residual shocks to energy prices and estimates their changing influence on energy prices and gdp the results suggest that the impacts of supply shocks rose with its increasing dependence on coal and declined with its partial transition to oil however the transition from exporting coal to importing oil increased the negative impacts of demand shocks more generally the results indicate that improvements in vulnerability and resilience to shocks did not progress systematically as the economy developed instead the changes in impacts depended greatly on the circumstances related to the demand for and supply of energy sources if these experiences are transferable to future markets a transition to a diversified mix of renewable energy is likely to reduce vulnerability and increase resilience to energy price shocks

daily seasonality in crude oil returns and volatilities abstract in this article we test for the existence of daily seasonality in returns and volatilities of crude oil using a dummy augmented garch specification for the period from may 1987 to october 2013 our key findings are as follows i volatilities on mondays are significantly higher than on all other weekdays providing the important insight that seasonal effects should be considered when forecasting crude oil volatility ii returns on the other hand tend to be lower on mondays than on other weekdays suggesting profitable investment strategies based on this seasonal pattern in fact the analysis of a simple long short trading rule based on the monday effect provides some evidence that it can outperform a passive buy and hold approach however it cannot do so to an extent that is statistically significant iii our seasonality results are fairly robust to the choice of other frequently used garch model variants like garch m tgarch and cgarch

option valuation of claims on real assets the case of offshore petroleum leases this paper extends financial option theory by developing a methodology for the valuation of claims on a real asset an offshore petroleum lease several theoretical and practical problems not present in applying option pricing theory to financial assets are addressed most importantly we show the necessity of combining option pricing techniques with a model of equilibrium in the market for the underlying asset petroleum reserves the advantages of this approach over conventional discounted cash flow techniques are emphasized the methodological development provides important insights for both company behavior and government policy promising empirical results are reported

how much do incentives affect car purchase agent based microsimulation of consumer choice of new cars part i model structure simulation of bounded rationality and model validation this article presents an agent based microsimulation capable of forecasting the effects of policy levers that influence individual choices of new passenger cars the fundamental decision making units are households distinguished by sociodemographic characteristics and car ownership a two stage model of individual decision processes is employed in the first stage individual choice sets are constructed using simple non compensatory rules that are based on previously owned cars second decision makers evaluate alternatives in their individual choice set using a multi attributive weighting rule the attribute weights are based on a multinomial logit model for cross country policy analysis in european countries additionally prospect theory and the notion of mental accounting are used to model the perception of monetary values the microsimulation forecasts actual market observations with high accuracy both on the level of aggregate market characteristics as well as on a highly resolved level of distributions of market shares the presented approach is useful for the assessment of policies that influence individual purchase decisions of new passenger cars it allows accounting for a highly resolved car fleet and differentiated consumer segments as a result the complexity of incentive schemes can be represented and detailed structural changes can be investigated

how responsive is saudi new vehicle fleet fuel economy to fuel and vehicle price policy levers abstract this paper investigates the drivers of recent improvements in saudi arabia s fleet fuel economy for new vehicles including passenger cars and light duty trucks vehicle choice models are estimated using both aggregate new vehicle sales data and disaggregate new vehicle buyer survey data the estimated models are used to simulate counterfactual policy scenarios simulation results suggest that the saudi gasoline price elasticity of demand for new vehicle fuel economy decreased slightly over recent years but it is still more elastic than that of the united states moreover the increase in domestic gasoline prices between 2014 and 2016 accounted for 42 of the increase in estimated new vehicle fleet fuel economy over that period finally the estimated elasticities and thus policy sensitivities vary by income and household size a revenue neutral household income and size based feebate policy could be more progressive than a gasoline price increase for improving the new vehicle fleet fuel economy

a generalized extreme value approach to financial risk measurement this paper develops an unconditional and conditional extreme value approach to calculating value at risk var and shows that the maximum likely loss of financial institutions can be more accurately estimated using the statistical theory of extremes the new approach is based on the distribution of extreme returns instead of the distribution of all returns and provides good predictions of catastrophic market risks both the in sample and out of sample performance results indicate that the box cox generalized extreme value distribution introduced in the paper performs surprisingly well in capturing both the rate of occurrence and the extent of extreme events in financial markets the new approach yields more precise var estimates than the normal and skewed t distributions

how sensitive are consumer expenditures to retail energy prices abstract there is growing evidence that the primary effect of energy price shocks on the u s economy involves a reduction in consumer spending we quantify the direct effect on real consumption of unanticipated changes in discretionary income shifts in precautionary savings and changes in the operating cost of energy using durables the possibility of asymmetries in the response of real consumption to energy price shocks is also considered we demonstrate that linear models are consistent with the symmetric behavior of real consumption in 1979 when energy prices increased sharply and in 1986 when they fell sharply it is shown that historically energy price shocks have been an important factor in explaining u s real consumption growth but by no means the dominant factor

exploring policy impacts for servicising in product based markets a generic agent based model the shift to markets based on servicising i e market level transitions from product based to service based production and consumption patterns may contribute to achieve absolute decoupling i e the combined development of economic growth and environmental impact reduction however the potential of this contribution is largely unknown in this paper a generic agent based model of servicising is presented with which this potential can be explored further taking into account decision making procedures of business and consumer agents including market research preferences and willingness to pay the details of the servicising model are presented and the model s abilities are demonstrated through three case studies from different sectors car and bike sharing crop protection and domestic water saving systems absolute decoupling was found to occur in some of the policy scenarios but results vary widely between cases it is concluded that the model can be used to explore the impact of public policy on the uptake of servicising and on absolute decoupling in various sectors and is therefore a useful support tool for policy makers who aim to promote servicising as well as for researchers studying potential servicising impacts

how much do incentives affect car purchase agent based microsimulation of consumer choice of new cars part ii forecasting effects of feebates based on energy efficiency abstract in this paper we simulate the car market in order to forecast the effects of feebate systems based on an energy labeling scheme using categories a to g very fuel efficient a cars receive a cash incentive highly inefficient g cars pay additional fees consumers have different price elasticities and behavioral options to react to feebates they can switch to a smaller sized car but as energy efficiency varies widely within size segments they can also stick to the preferred size class and choose a more efficient smaller engine in addition previously owned cars influence the next car to be chosen we use an agent based microsimulation approach particularly suited to predict environmental and market effects of feebates heteorogenous agents choose from a choice set drawn from a detailed fleet of new cars incentives of 2000 for a labeled cars induce an additional rated co 2 emission decrease of new car registrations between 3 4 and 4 3 with co 2 abatement costs between 6 and 13 per ton and otherwise little undesired market disturbance the risk of rebound effects is estimated to be low after adopting the frequencies of consumer segments to a given country the model presented is applicable to all european car markets

the economic effects of energy price shocks large fluctuations in energy prices have been a distinguishing characteristic of the u s economy since the 1970s turmoil in the middle east rising energy prices in the u s and evidence of global warming recently have reignited interest in the link between energy prices and economic performance this paper addresses a number of the key issues in this debate what are energy price shocks and where do they come from how responsive is energy demand to changes in energy prices how do consumers expenditure patterns evolve in response to energy price shocks how do energy price shocks affect u s real output inflation and stock prices why do energy price increases seem to cause recessions but energy price decreases do not seem to cause expansions why has there been a surge in the price of oil in recent years why has this new energy price shock not caused a recession so far have the effects of energy price shocks waned since the 1980s and if so why as the paper demonstrates it is critical to account for the endogeneity of energy prices and to differentiate between the effects of demand and supply shocks in energy markets when answering these questions

the salience of culture s consequences the effects of cultural values on top executive commitment to the status quo while top executives are argued to play a central role in strategic adaptation evidence suggests that they are not equally open to organizational change this study extends earlier investigation of the determinants of top executive commitment to the status quo csq to the international arena examining the influence of cultural values on executive open mindedness toward change using data from a survey of top managers in 20 countries analyses reveal that values of individualism uncertainty avoidance power distance and long term orientation are significantly related to executives adherence to existing strategy and leadership profiles further while confirming earlier findings that industry tenure is positively related to strategy csq results show that tenure does not significantly affect leadership csq once cultural values are controlled in summary the findings reveal that culture has an important impact on executive mindsets as demonstrated by the fact that executives of differing cultural background are not equally open to change in organizational strategy and leadership profiles second the findings suggest that executives views of appropriate leadership profiles reflect the imprint of cultural socialization moreso than professional experience finally and more broadly the study offers empirical support for the view that values figure prominently in shaping executives strategic and leadership orientations 1997 by john wiley sons ltd

understanding international commodity price fluctuations abstract an overview is provided of recent work on commodity prices focusing on three themes i financialization of commodity markets commodities being considered by financial investors as a distinct asset class ii trends and forecasts of commodity prices and iii fracking a shorthand for the emergence of new sources of energy supply lessons are drawn on the role of fundamentals and expectations in driving the rapidly changing nature of commodity markets

industrial natural gas consumption in the united states an empirical model for evaluating future trends abstract this study develops a statistical model of industrial us natural gas consumption based upon historical data for the 1958 2003 period the model specifically addresses interfuel substitution possibilities and changes in the industrial economic base using a relatively simple approach the framework can be simulated repeatedly with little effort over a range of different conditions it may also provide a valuable input into larger modeling exercises where an organization wants to determine long run natural gas prices based upon supply and demand conditions projections based upon this demand framework indicate that industrial natural gas consumption may grow more slowly over the next 20 yr than being projected by the u s energy information administration eia this conclusion is based upon the assumption that natural gas prices will follow oil prices as they have done over recent decades if natural gas prices should lag well below oil prices as envisioned by the latest eia outlook industrial natural gas consumption should rapidly expand well beyond the levels being projected by eia

investments of uncertain cost abstract this paper examines irreversible investment decisions when projects take time to complete and are subject to two types of cost uncertainty the first is technical uncertainty i e uncertainty over the physical difficulty of completing a project which is only resolved as the investment proceeds the second is input cost uncertainty i e uncertainty over the prices of construction inputs or over government regulations affecting construction costs which is external to the firm these two types of uncertainty have very different effects on the investment decision a simple investment rule is derived that maximizes firm value and is used to analyze the decision to start or continue building a nuclear power plant during the 1980s

separated influence of crude oil prices on regional natural gas import prices this paper analyses the impact of global economic activity and international crude oil prices on natural gas import prices in three major natural gas markets using the panel cointegration model it also investigates the shock impacts of the volatility and the increase and decrease of oil prices on regional natural gas import prices the results show that both global economic activity and international crude oil prices have significant long term positive effects on regional natural gas import prices the volatility of international crude oil prices has a negative impact on regional natural gas import prices the shock impact is weak in north america lags in europe and is most significant in asia which is mainly determined by different regional policies for price formation in addition the response of natural gas import prices to increases and decreases in international crude oil prices shows an asymmetrical mechanism of which the decrease impact is relatively stronger

pricing the european option to switch between two energy sources an application to crude oil and natural gas we consider a firm which can choose between crude oil and natural gas to run its business the firm selects the energy source which minimizes its energy or production costs at a given time horizon assuming the energy strategy to be established over a fixed time window the energy choice decision will be made at a given future date t in this light the firm s energy cost can be considered as a long position in a risk free bond by an amount of the terminal oil price and a short position in a european put option to switch from oil to gas by an amount of the terminal oil price too as a result the option to switch from crude oil to natural gas allows for establishing a hedging strategy with respect to energy costs modeling stochastically the underlying asset of the european put we propose a valuation formula of the option to switch and calibrate the pricing formula to empirical data on a daily basis hence our innovative framework handles widely the hedge against the price increase of any given energy source versus the price of another competing energy source i e minimizing energy costs moreover we provide a price for the cost reducing effect of the capability to switch from one energy source to another one i e hedging energy price risk

welfare implications of car feebates a simulation analysis vehicle taxation based on emissions is increasingly being adopted worldwide to shift consumer purchases to low carbon cars yet evidence on its effectiveness and economic impact is limited we focus on feebate schemes which impose a fee on high carbon vehicles and give a rebate to low carbon cars we estimate demand for passenger cars in germany and simulate the impact of alternative feebate schemes on emissions consumer welfare public revenues and firm profits we find that revenue neutral feebate schemes are welfare decreasing welfare can only increase with schemes that increase tax revenues at the expense of consumer and producer surplus

high profit strategies in mature capital goods industries a contingency approach high profit and low profit strategic gestalts in two different types of mature capital goods industries are examined multiple avenues to high profits are found within both types but they differ

refunded emission taxes a resolution to the cap versus tax dilemma for greenhouse gas regulation regulatory instruments for greenhouse gas control present a policy dilemma market based instruments such as cap and trade function to reduce regulatory costs but because they provide no guarantee that costs will be reduced to acceptable levels it is infeasible to set caps at sustainable levels emission taxes provide cost certainty but their comparatively high cost makes it infeasible to set tax rates at levels commensurate with sustainability goals however there is a straightforward solution to this dilemma just as cap and trade uses free allowance allocation to minimize regulatory costs an emission tax s cost can be mitigated by refunding tax revenue in such a way that emission reduction becomes profitable a refunded tax like cap and trade with free allocation would be revenue neutral within the regulated industry marginal competitive incentives for commercializing emission reducing technologies would not be diminished by the refund and the refund could actually make it politically and economically feasible to increase the incentives by an order of magnitude whereas cap and trade merely caps emissions at an unsustainable level while subjecting the economy to extreme price volatility refunded emission taxes could create a stable investment environment with sustained incentives for emission reduction over a long term investment horizon