monitoring changes in economy wide energy efficiency from energy gdp ratio to composite efficiency index since the 1973 world oil crisis monitoring trends in energy efficiency at the economy wide level has been an important component of energy strategy in many countries to support this effort various energy efficiency related indicators have been developed we examine some classical indicators which are often found in national and international energy studies in the 1970s and 1980s we then describe the recent developments in using the index decomposition analysis to give an economy wide composite energy efficiency index based on a bottom up approach this composite index is superior to the classical indicators as an economy wide energy efficiency measure and has lately been adopted by a growing number of countries for national energy efficiency trend monitoring

consumption betas and backwardation in commodity markets this paper examines the relationship between commodity consumption betas and realized commodity futures contract risk premiums a linear relationship between risk premiums and consumption betas is developed based on a consumption oriented capm the parameters of this linear model are estimated using fourteen commodities

price determination in the eu ets market theory and econometric analysis with market fundamentals abstract we investigate the price determination of the european union emission allowance eua of the european union emissions trading scheme eu ets we postulate an uncertain permit price and risk averse firms which have the possibility to hedge in the forward market the firms produce final goods abate their emissions and trade permits in the permit market the dependence of the equilibrium permit price on exogenous variables is studied in a permit market model we test our theoretical findings with empirical data from 2005 to 2010 in the eu ets market we use daily forward prices of eua as our dependent variable we use several econometric models with multiple stationary time series to discover that there is a strong relationship between the fundamentals such as german electricity prices and gas and coal prices with the price of eua we find that the eua forward price depends on fundamentals especially on the price of electricity as well as on the gas coal difference in a statistically significant way

reciprocal relationships and mechanism design we study an incomplete information game in which players can coordinate their actions by contracting among themselves we model this relationship as a reciprocal contracting procedure where each player has the ability to make commitments contingent on the other players commitments we differ from the rest of the literature on reciprocal contracting by assuming that punishments cannot be enforced in the event that cooperation breaks down we fully characterize the outcomes that can be supported as perfect bayesian equilibrium outcomes in such an environment we use our characterization to show that the set of supportable outcomes with reciprocal contracting is larger than the set of outcomes available in a centralized mechanism design environment in which the mechanism designer is constrained by his inability to enforce punishments against non participants the difference stems from the players ability in our contracting game to convey partial information about their types at the time they offer contracts we discuss the implications of our analysis for modelling collusion between multiple agents interacting with the same principal

dynamic behavior of co2 spot prices co2 emission allowances are traded nowadays over the counter otc and on exchanges across the european union eu it thus becomes increasingly important for traders of these emission certificates to have a valid co2 spot price model to value potential derivatives in addition co2 emitting companies require an adequate co2 spot price model in order to better assess their production costs and support emissions related investment decisions however sufficient price history is still lacking for the european union emission trading scheme eu ets we therefore present a tractable stochastic equilibrium model reflecting stylized features of the eu ets and analyze the resulting co2 spot price dynamics our main findings are that co2 prices do not have to follow any seasonal patterns discounted prices should possess the martingale property and an adequate co2 price process should exhibit a time and price dependent volatility structure a brief empirical examination regarding market efficiency complements our analysis

economic growth and greenhouse gases in europe a non radial multi sector nonparametric production frontier analysis abstract energy use has become a topical issue when assessing the economic growth of countries indeed energy use gives rise to greenhouse gas emissions which are undesirable side products of economic growth in this paper we present a non radial multi sector nonparametric production frontier approach specially tailored for addressing this issue our approach is consistent with previous works and in line with recent policy and regulation implementations we also make use of second stage country and sector level regression analyses to investigate how the efficiency results are affected by exogenous factors we apply our method to the case of 10 sectors in 19 european countries our results highlight the need for policy and regulation implementations for each sector individually indeed our efficiency and regression results show that there exists a sector heterogeneity and that the room for increasing economic growth reducing greenhouse gas emissions is clearly different for each sector in every country finally our results highlight two sectors 1 agriculture and 2 electricity gas and water and that the europe 2020 objectives are well set since they target the most inefficient countries sectors

marginal rate of transformation and rate of substitution measured by dea environmental assessment comparison among european and north american nations this study discusses the new use of dea data envelopment analysis environmental assessment to measure mrt marginal rate of transformation and rs rate of substitution among production factors e g inputs desirable and undesirable outputs to measure the degree on mrt and rs this study first examines a concept of disposability from the perspective of economic strategies to combat various environmental issues the strategies are extendable to a policy change for pollution prevention the underlying concept is separated into natural and managerial disposability under managerial disposability it is possible for us to measure an occurrence of desirable congestion or eco technology innovation considering the disposability concept this study discusses how to measure the type and magnitude of mrt and rs a problem of the mrt rs measurement is that these measures usually become unstable e g very large or small in these magnitudes because dea does not assume any functional form for economic activities to overcome such a difficulty this study equips dea environmental assessment with multiplier restriction by utilizing a unique feature on a proposed data treatment the multiplier restriction in dea has been never explored in previous works on environmental assessment in an application this study finds three important economic concerns on europe and north america first western europe outperforms eastern europe and north america in their unified efficiency measures under managerial disposability this study statistically confirms a difference between western and eastern europe but not between western europe and north america this result exhibits that eastern europe is not yet well developed at the level of the other two regions second eastern europe has exhibited mrt estimates that are different from western europe and north america the nations in eastern europe have an economic potential for industrial developments because the level of their industrial pollutions is less than that of the other two regions the potential is also found in their mrt estimates finally an interesting difference can be found in the rs estimate between eastern europe and western europe from 2008 to 2012 they have statistically exhibited a difference between the two regimes but not with north america this is because most nations in both western europe and north america have already attained a high level of economic successes so that they have a limited industrial potential under current production technology and eco technology the situation of the two regions will be changed along with new technology development in contrast eastern europe is different from the other two regions in terms of attaining such a level of social sustainability because of limited capital accumulation and limited opportunity for technology innovation

externalities and asymmetric information a reconsideration of the pigovian theory of regulating externalities via taxation is undertaken for environments with private information the presence of private information may have no effect on the social optimum but when it has an impact it is to cause a group of different agents to share the same production or consumption levels the model developed provides an appealing characterization of when such situations transpire they occur when the individuals who desire most to engage in some activity are the ones who society least wants to participate since such instances could potentially be regulated by the imposition of quantity controls this may explain authorities apparent predilection for quantity limits rather than tax cum subsidy schemes to manage many externalities

how not to sell nuclear weapons we consider situations where a sale affects the ensuing interaction between potential buyers these situations are modeled by assuming that an agent who does not acquire the object for sale incurs an identity dependent externality we construct a revenue maximizing auction for the seller we observe that 1 outside options and participation constraints are endogenous 2 the seller extracts surplus also from agents who do not obtain the auctioned object 3 the seller is better off by not selling at all while obtaining some payments if externalities are much larger than valuations

measuring energy efficiency in the context of an emerging economy the case of indian manufacturing in recent years the indian economy has achieved a rapid growth rate however one of the challenges facing the economy is the large energy supply that would be needed to sustain this growth path hence attaining energy efficiency is crucial for the economy this paper examines the indian manufacturing sector and utilizes a variant of the directional distance function to obtain comprehensive measures of performance of the major manufacturing states given the joint goals of achieving energy conservation and output growth the results of the empirical application reveal that given the prevailing technology the average manufacturing firm across the states could reduce energy input and increase output simultaneously by an annual average of 3 84 by improving technical efficiency to accommodate a larger simultaneous increase in output and reduction in energy use india should adopt superior technologies so as to shift the efficient frontier outward

the social basis of interdependent preferences abstract most economists are sympathetic to the idea that concerns for relative position are an important aspect of many economic problems there has traditionally been a reluctance to include such concerns primarily because models that included them often allow such a broad range of behavior that there are few if any restrictions on equilibrium behavior and hence such models would have little or no predictive power in this paper we discuss how reduced form models may naturally give rise to utility functions that depend in part on relative standing there are several advantages of modelling concern for relative standing in reduced form utility functions even when there is no similar concern in the deep preferences it provides structure and constraints on the way that relative standing affects utility and further it can yield testable implications about the way that changes in the underlying environment affect the concern for relative standing we discuss the advantages and disadvantages of modelling social concerns in this way and provide examples that illustrate how concerns for relative standing can affect savings investment and labor choice decisions

pricing forward contracts in power markets by the certainty equivalence principle explaining the sign of the market risk premium in this paper we provide a framework that explains how the market risk premium defined as the difference between forward prices and spot forecasts depends on the risk preferences of market players and the interaction between buyers and sellers in commodities markets this premium is an important indicator of the behavior of buyers and sellers and their views on the market spanning between short term and long term horizons we show that under certain assumptions it is possible to derive explicit solutions that link levels of risk aversion and market power with market prices of risk and the market risk premium we apply our model to the german electricity market and show that the market risk premium exhibits a term structure which can be explained by the combination of two factors firstly the levels of risk aversion of buyers and sellers and secondly how the market power of producers relative to that of buyers affects forward prices with different delivery periods

carbon pricing and electricity markets the case of the australian clean energy bill abstract we examine the impact of the clean energy bill on the price behavior of electricity futures contracts in the australian national electricity market first we compute ex ante forward risk premiums in the pre tax period until june 2012 then derive market implied expectations about additional costs of the carbon pricing mechanism cpm on generators as well as pass through rates during the carbon tax july 2012 june 2014 and post tax after july 2014 periods our results suggest that the observed carbon premiums became increasingly higher once the carbon tax had been proposed and subsequently legislated in 2011 during periods where market participants could be relatively certain that the tax would be effective we find expected carbon pass through rates between 67 and 150 which seem to be inversely related to emission intensities in the regional markets our results are also a clear indication of strong policy uncertainty with regards to the cpm and suggest that in the future a stable and long term policy framework would be required for a carbon pricing mechanism to have its full effect

energy use efficiency in the indian manufacturing sector an interstate analysis abstract this paper approaches the measurement of energy efficiency from a production theoretic framework and uses data envelopment analysis to measure energy efficiency in the indian manufacturing sector using data from the annual survey of industries for the years 1998 99 through 2003 04 the study compares the energy efficiency in manufacturing across states based on several models the results show considerable variation in energy efficiency across states comparing the results across our models we find that the relative pricing of energy does not provide the appropriate incentives for energy conservation a second stage regression analysis reveals that states with a larger share of manufacturing output in energy intensive industries have lower energy efficiency also higher quality labor force associates with higher energy efficiency finally the power sector reforms have not yet had any significant impact on achieving energy efficiency

markets for ownership the prevailing economic theory of the firm based on a property rights perspective has demonstrated that ownership by dispensable outside parties is an inefficient outcome relative to ownership by productive agents in order to better understand observed patterns of ownership this paper considers the outcome of ma rkets for ownership that operate prior to production taking place the main result is that outside parties will often become the equilibrium asset owners this is precisely because but for ownership such parties would not earn rents in contrast productive agents earn rents even when they do not own assets given that their contribution is complementary with other productive agents their willingness to pay for ownership is less than that of an outside party this result is robust to the introduction of moderate levels of inefficiency arising from outside ownership and to a consideration of opportunities for re sale before production begins the main conclusion drawn is that the nature of the operation of markets for ownership stands alongside incentive effects as important predictors of firm boundaries journal of economic literature classification numbers d23 l22

when do auctions ensure the welfare maximizing allocation of scarce inputs we determine when an unfettered auction will ensure the welfare maximizing allocation of a scarce input that enhances product quality and may reduce production costs a supplier values the input for this use value and for its foreclosure value because once the input is acquired it is unavailable to rivals an unfettered auction often ensures the welfare maximizing allocation of an input increment however it can fail to do so when the input would increase relatively rapidly the competitive position of a rival with a moderate competitive disadvantage bidder handicapping that ensures auctions generate welfare maximizing input allocations differ from standard handicapping policies

an econometric analysis of emission allowance prices knowledge of the statistical distribution of the prices of emission allowances and their forecastability are crucial in constructing among other things purchasing and risk management strategies in the emissions constrained markets this paper analyzes the two emission permits markets co2 in europe and so2 in the us and investigates a model for dealing with the unique stylized facts of this type of data its effectiveness in terms of model fit and out of sample value at risk forecasting as compared to models commonly used in risk forecasting contexts is demonstrated

efficient energy saving targets for apec economies abstract energy saving target ratios estr for 17 apec economies during 1991 2000 are computed in a total factor framework all nominal variables are transformed into real variables by the purchasing power parity ppp at the 1995 price level the data envelopment analysis dea approach is used to find the energy saving target est for apec economies without reducing their maximum potential gross domestic productions gdps in each year energy labor and capital are the three inputs while gdp is the single output our major findings are as follows 1 china has the largest est up to almost half of its current usage 2 hong kong the philippines and the united states have the highest energy efficiency 3 the energy efficiency generally increases for apec economies except for canada and new zealand 4 chile mexico and taiwan have significantly improved their energy efficiency in the last 5 years 5 an inverted u shape relation exists between per capita est and per capita gdp 6 estr has a positive relation with the value added percentage of gdp of the industry sector and a negative relation with that of the service sector

a model for energy pricing with stochastic emission costs we use a supply demand approach to value energy products exposed to emission cost uncertainty we find closed form solutions for a number of popularly traded energy derivatives such as forwards european call options written on spot prices and european call options written on forward contracts our modeling approach is to first construct noisy supply and demand processes and then equate them to find an equilibrium price this approach is very general while still allowing for sensitivity analysis within a valuation setting our assumption is that in the presence of emission costs traditional supply growth will slow down causing output prices of energy products to become more costly over time however emission costs do not immediately cause output price appreciation but instead expose individual projects particularly those with high emission outputs to much more extreme risks through the cost side of their profit stream our results have implications for hedging and pricing for producers operating in areas facing a stochastic emission cost environment

choosing the competition and patent licensing this article examines licensing as a means of choosing the competitors which a patentee monopolist will face in the period after the patent expires the queue of entrants consists of two firms which differ in their relative strengths as competitors for example by size or level of marginal cost by structuring the industry to be composed of weak competitors the incumbent is able to prolong its dominant position in the industry after the patent expires examples are presented in which the evidence suggests that choosing the competition was an important motivation of the licensor s behavior

raising rivals cost in multi unit auctions abstract the objective many telecom regulators want to achieve when they decide to auction spectrum is that acquiring firms pay a market price based on the opportunity cost principle the simultaneous ascending auction may fail in this respect as it provides bidders with an opportunity to engage in strategic demand reduction this paper asks whether the combinatorial clock auction cca fares better in this respect we show that the answer to this question depends on the objectives bidders have if bidders have only the slightest preference to raise rivals cost they will use the opportunities the cca provides them to engage in strategic demand expansion this is even the case when the clock phase ends with excess demand

modeling eu allowances and oil market interdependence implications for portfolio management abstract this paper examines the dependence structure between european union allowances euas and crude oil markets during the second commitment period of the european union emissions trading scheme and the implications for portfolio management using different copula models our findings suggest positive average dependence and extreme symmetric independence that is consistent with interdependence and no contagion effects between the eua and crude oil markets the implication of this result for eua oil portfolios points to the existence of diversification benefits hedging effectiveness and value at risk reductions the eua market is therefore an attractive market for investors in terms of diversifying market risk and reducing downside risk in crude oil markets

total factor energy efficiency of coal consumption an empirical analysis of china s energy intensive industries abstract improvement of coal consumption efficiency is very important both for china in solving its problems of energy security and environmental pollution and for the world in addressing the issue of greenhouse gas emissions using a total factor framework this paper employs a data envelopment analysis dea approach to evaluate the coal consumption efficiency of six energy intensive sub industries in china in 2015 coal consumption efficiency is factorized into economic efficiency and environmental efficiency with sulfur dioxide nitrogen oxide and industrial smoke dust and soot emissions treated as undesirable outputs of energy consumptions the results show the following 1 of the six energy intensive sub industries studied two exhibit both dea effective coal economic efficiency and coal environmental efficiency coal economic efficiency is found to be greater than coal environmental efficiency indicating that the benefits of economic efficiency have masked the negative effects of the environmental impact china should therefore pay more attention to the clean utilization of coal 2 low environmental efficiency mainly resulted from the joint effects of pure technical efficiency and scale efficiency therefore enterprises in these industries must engage in management efforts to improve their ability to manage large enterprises 3 the energy intensive industries characterized by coal environmental efficiency that failed to achieve pure technological effectiveness all exhibited input redundancy or output inadequacy of varying degrees while showing a potential for energy conservation and emissions reductions

undesirable outputs in efficiency valuations abstract efficiency measurement is usually based on the assumption that inputs have to be minimized and outputs have to be maximized in a growing number of applications however undesirable outputs are incorporated into the production model which have to be minimized in this paper various approaches for treating such outputs in the framework of data envelopment analysis dea are discussed and the resulting efficient frontiers are compared new radial measures are introduced which assume that any change of the output level will involve both undesirable and desirable outputs

modeling undesirable factors in efficiency evaluation abstract data envelopment analysis dea measures the relative efficiency of decision making units dmus with multiple performance factors which are grouped into outputs and inputs once the efficient frontier is determined inefficient dmus can improve their performance to reach the efficient frontier by either increasing their current output levels or decreasing their current input levels however both desirable good and undesirable bad factors may be present for example if inefficiency exists in production processes where final products are manufactured with a production of wastes and pollutants the outputs of wastes and pollutants are undesirable and should be reduced to improve the performance using the classification invariance property we show that the standard dea model can be used to improve the performance via increasing the desirable outputs and decreasing the undesirable outputs the method can also be applied to situations when some inputs need to be increased to improve the performance the linearity and convexity of dea are preserved through our proposal

the impacts of eu co2 emissions trading on electricity markets and electricity consumers in finland abstract in this paper the likely impacts of the eu emission trading system on the nordic electricity market and on the position of various market actors are assessed in its first phase the eu co 2 emission trading system includes power plants with thermal capacity greater than 20 mw metals industry pulp and paper industry mineral industry and oil refineries this paper describes the assessment done for the finnish minister of trade and industry analysing the likely impacts on power plant operators on energy intensive industries on other industries and on other consumer groups the impacts of emissions trading were studied with the vtt electricity market model and with the times energy system model the annual average electricity price was found to rise 0 74 eur mw h 1 for every 1 tonne co 2 1 in the nordic area large windfall profits were estimated to incur to electricity producers in the nordic electricity market in finland metals industry and private consumers were estimated to be most affected by the electricity market price increases expanded nuclear power generation could limit the increases in the prices of electricity to one third compared to those in the base case

energy efficiency of selected oecd countries a slacks based model with undesirable outputs this paper presents an efficiency assessment of selected oecd countries using a slacks based model with undesirable or bad outputs sbm undesirable in this research sbm undesirable is used first in a two stage approach to assess the relative efficiency of oecd countries using the most frequent indicators adopted by the literature on energy efficiency besides in the second stage glmm mcmc methods are combined with sbm undesirable results as part of an attempt to produce a model for energy performance with effective predictive ability the results reveal different impacts of contextual variables such as economic blocks and capital labor ratio on energy efficiency levels

multilateral productivity comparisons when some outputs are undesirable a nonparametric approach multilateral productivity comparisons of firms producing multiple outputs some of which are undesirable are obtained by making two modifications to the standard farrell approach to efficiency measurement the restriction that production technology satisfy strong disposability of outputs is relaxed to allow for the fact that undesirable outputs may be freely disposable and the efficiency measures are modified to allow for an asymmetric treatment of desirable and undesirable outputs performance measures that satisfy these requirements are calculated as solutions to programming problems the methodology is applied to a sample of mills producing paper and pollutants

modeling co2 emission allowance prices and derivatives evidence from the european trading scheme this paper studies the three main markets for emission allowances within the european union emissions trading scheme eu ets powernext nord pool and european climate exchange ecx the analysis suggests that the prohibition of banking of emission allowances between distinct phases of the eu ets has significant implications in terms of futures pricing motivated by these findings we develop an empirically and theoretically valid framework for the pricing and hedging of intra phase and inter phase futures and options on futures respectively

electricity markets volatility estimates regularities and risk management applications the recent deregulation of the market for electric power in many parts of the us and canada has expanded the set of potential tools for managing the types of risks faced by both generators and consumers of electric power in particular manufacturing and other firms whose operations are powered by electricity now face on a continuing basis the engineering management decisions concerning whether they should buy or produce electricity and if they are to buy or sell electricity what types of contracts are optimum these types of risk management decisions typically involve futures forwards options and other financial derivatives the price and volatility of electric power are known to play an essential role in determining which of these instruments should be used however electricity as a commodity possesses certain special features not shared by other commodities and hence its risk properties are not yet well understood in this paper we consider and test certain hypotheses about the properties of electricity price using recent market data we find that electricity prices possess certain volatility and other systematic properties that can be characterized by the type and method of delivery of electricity these properties can be used by firms in formulating their optimal demand and supply schedules of electric power

are electricity risk premia affected by emission allowance prices evidence from the eex nord pool and powernext the links between emission and energy markets are of great interest to practitioners academics and policy makers in this paper it is conjectured that a positive relationship exists between emission allowance spot returns and electricity risk premia within the european union emissions trading scheme eu ets we discuss how this can be justified on the basis of the substantial uncertainties in the carbon markets we also argue that this link could be due to trading strategies followed by electricity producers who attempt to exploit their initial allocation of free allowances analysis of data from three major markets the eex nord pool and powernext offers empirical support to our conjecture these findings have significant policy implications since they imply that efforts should be made in order to reduce the uncertainty in the carbon markets by clearly defining the eu ets regulative framework and design over the next years moreover our results suggest that the allocation of free allowances and their unrestricted trading enable electricity producers to accomplish windfall profits in the derivatives market at the expense of other market participants

forecasting carbon futures volatility using garch models with energy volatilities abstract this article examines the volatility forecasting abilities of three approaches garch type model that uses carbon futures prices an implied volatility from carbon options prices and the k nearest neighbor model based on the results we document that garch type models perform better than an implied volatility and the k nearest neighbor model this result suggests that carbon options have little information about carbon futures due to their low trading volume we also investigate whether the volatilities of energy markets i e brent oil coal natural gas and electricity forecast following day s carbon futures volatility according to the results we suggest that brent oil coal and electricity may be used to forecast the volatility of carbon futures

case study on initial allocation of shanghai carbon emission trading based on shapley value abstract carbon emission trading is an effective measure to reduce greenhouse gas emissions worldwide china has publicized plans to initiate the demonstration of carbon emission trading in seven regions as of 2013 initial allocation is fundamental but it proposes difficulty in the mechanism design of the carbon emission trading system benchmark grandfathering and the shapley value have been employed to simulate a specific case which consists of the initial allocation of carbon emission allowances of three power plants in shanghai china the results of the shapley value are regarded as a theoretical equitable reference the results of benchmark are similar to those of the shapley value however it is apparent that the allocation regarding grandfathering is inequitable considering other factors we proposed the following at the introduction of experimental stage free allocation pertaining to grandfathering can be adopted meanwhile benchmark should be prepared and adopted at the appropriate time furthermore a portion of the initial allowances can be reserved for auction and this portion for auction will escalate to the extent of 100 upon entering the formal stage in addition the tiered price mechanism and the subsidy policy are also suggested

total factor energy efficiency of regions in china abstract this paper analyzes energy efficiencies of 29 administrative regions in china for the period 1995 2002 with a newly introduced index most existing studies of regional productivity and efficiency neglect energy inputs we use the data envelopment analysis dea to find the target energy input of each region in china at each particular year the index of total factor energy efficiency tfee then divides the target energy input by the actual energy input in our dea model labor capital stock energy consumption and total sown area of farm crops used as a proxy of biomass energy are the four inputs and real gdp is the single output the conventional energy productivity ratio regarded as a partial factor energy efficiency index is computed for comparison in contrast to tfee our index is found fitting better to the real case according to the tfee index rankings the central area of china has the worst energy efficiency and its total adjustmentof energy consumption amount is over half of china s total regional tfee in china generally improved during the research period except for the western area a u shape relation between the area s tfee and per capita income in the areas of china is found confirming the scenario that energy efficiency eventually improves with economic growth

influences from the european parliament on eu emissions prices abstract the decisions of the european parliament ep are shown to influence both eu emission allowance eua prices and volatility reductions in price and increases in volatility are observed when ep decisions are i not party political in origin ii made during times of low market sentiment or iii made during times of low market attention daily eua prices from 2007 to 2014 are used in the study with decisions analysed using an event study approach for price impact and a garch specification for volatility impact our findings suggest the need for policymakers to improve communication of long term strategies for the eua market this aims to reduce the evident ongoing uncertainty experienced by traders around each decision made by the ep the finding that sentiment and market attention at the time of an ep decision influences the market s reaction indicates a need to consider market dynamics in terms of decision timing so that market turbulence is not an unintended by product of an ep decision some form of medium term forward guidance may be called for

resale markets and the assignment of property rights the consumption of an indivisible good causes identity dependent externalities to non consumers we analyse resale markets where the current owner designs the trading procedure but cannot commit to future actions we ask the following questions 1 doer the identity of the initial owner matter for the determination of the final consumer 2 is the outcome always efficient the major conclusion of our paper is that the irrelevance of the initial structure of property rights arises in resale processes even if there are transaction costs that hinder efficiency this result complements the coasian view where the irrelevance of the assignment of property rights is a consequence of efficiency

estimating the commodity market price of risk for energy prices the purpose of this paper is to estimate the market price of risk mpr for energy commodities the ratio of expected return to standard deviation the mpr sign determines whether energy forward prices are upward or downward biased predictors of expected spot prices we estimate mprs using spot and futures prices while accounting for the samuelson effect we find long term mprs generally positive and short term negative consistent with positive energy betas and hedging respectively in spot electricity markets mprs in day ahead prices agree with short dated futures our results relate risk premia to informed hedging decisions and futures prices to forecast expected prices

total factor energy efficiency in developing countries this paper uses a total factor framework to investigate energy efficiency in 23 developing countries during the period of 1980 2005 we explore the total factor energy efficiency and change trends by applying data envelopment analysis dea window which is capable of measuring efficiency in cross sectional and time varying data the empirical results indicate that botswana mexico and panama perform the best in terms of energy efficiency whereas kenya sri lanka syria and the philippines perform the worst during the entire research period seven countries show little change in energy efficiency over time eleven countries experienced continuous decreases in energy efficiency among five countries witnessing continuous increase in total factor energy efficiency china experienced the most rapid rise practice in china indicates that effective energy policies play a crucial role in improving energy efficiency tobit regression analysis indicates that a u shaped relationship exists between total factor energy efficiency and income per capita

estimating the linkage between energy efficiency and productivity abstract many analyses have referred to industrial productivity benefits associated with energy efficiency that are at least as great or larger than the energy benefits if plants with higher energy intensity also tend to have lower productivity then energy policy needs to consider this this study examines this issue for two segments of the glass industry using plant level data from the census bureau productivity is defined by the difference in best practice production efficiency as measured by data envelopment analysis dea this study uses regression analysis to estimate how differences in plant level electricity and fossil fuel intensity i e energy use per unit of production are attributable to differences in plant level productivity and other economic variables like energy prices and cumulative production in every case productivity differences between plants are statistically significant in explaining differences in plant energy intensity the coefficient that links productivity to energy efficiency yields a less than proportional impact for only one industry and fuel type for others the relationship is implies that a 1 increase in productivity increase energy efficiency by more than 1 this effect is statistically significant for flat glass but not container glass the estimates of the price and learning by doing coefficients seem reasonable but without imposing the assumption that all plants in the industry are equally productive this lends further credence to a significant relationship between productivity and energy efficiency

regional energy efficiency evaluation in china a super efficiency slack based measure model with undesirable outputs abstract with the rapid development of global economy the demand for energy has increased significantly therefore energy efficiency improvement is essential for global energy and economic transformation in the chinese context study on the energy efficiency of various provinces can contribute to better understand china s energy utilization status and provide policy implications for improving china s energy utilization efficiency in this study based on the super efficiency slack based measure model with undesirable outputs the energy efficiency of china s 30 provinces in 2013 and 2014 was investigated then the energy efficiency of the eastern central and western china was compared and further discussed finally according to the results the relevant policy implications were put forward the results showed that china s overall energy efficiency had decreased while taking the undesirable outputs into consideration in addition eastern china had the highest energy efficiency and the energy efficiency of western china was relatively low the energy efficiency gap among china s provinces was still large therefore it was necessary to improve china s overall energy efficiency by developing targeted policies considering regional conditions

market price of risk implied by asian style electricity options and futures in this paper we propose a jump diffusion type model which recovers the main characteristics of electricity spot price dynamics in the nordic market including seasonality mean reversion and spiky behavior we show how the calibration of the market price of risk to actively traded futures contracts allows for efficient valuation of nord pool s asian style options written on the spot electricity price furthermore we study the evolution of the market price of risk and the risk premium over a three year time period and compare the obtained results with those reported in the literature

a comprehensive review of data envelopment analysis dea approach in energy efficiency the main aim of this review article is to review of dea models in regarding to energy efficiency this paper reviewed and summarized the different models of dea that have been applied around the world to development of energy efficiency problems consequently a review of 144 published scholarly papers appearing in 45 high ranking journals between 2006 and 2015 have been obtained to achieve a comprehensive review of dea application in energy efficiency accordingly the selected articles have been categorized based on year of publication author s nationalities scope of study time duration application area study purpose results and outcomes results of this review paper indicated that dea showed great promise to be a good evaluative tool for future analysis on energy efficiency issues where the production function between the inputs and outputs was virtually absent or extremely difficult to acquire

trader types and volatility of emission allowance prices evidence from eu ets phase i abstract this paper studies the relation between the trading activity of market participants and the volatility of the european emission allowance price during phase i of the european union emission trading system eu ets we focus on the contrasting roles of different trader types we find evidence of a positive and significant trading activity volatility relation which appears to be stronger when accounting for trader type the positive relation can be mainly attributed to energy providers in contrast industrial companies seem to have traded more frequently when volatility levels were lower finally the non liable players represented by financial intermediaries appear to have acted as a flexible counterparty trading more with the energy sector when volatility was higher and more with the industrial firms when volatility was lower we discuss possible explanations for these contrasted positions understanding the trading activity volatility link is relevant for evaluating the efficiency of the eu ets although the relation is generally positive many players remained often inactive and traded mostly when volatility levels were lower policies targeting the engagement of less active players could lead to a smoother incorporation of information into prices and to an increase in market efficiency

opportunism in multilateral vertical contracting nondiscrimination exclusivity and uniformity comment an input supplier selling to competing downstream firms would benefit from publicly committing at the outset to all contracts efficient commitment however would require complete contracts the authors study instead bilateral contracting without commitment regarding others terms each firm then fears that the supplier might opportunistically renegotiate another s contract to increase bilateral profit at the firm s expense the authors show that nondiscrimination clauses generally cannot curb such third party opportunism even with symmetric firms to reassure firms crude forms of commitment may be adopted this could explain the pervasiveness of exclusivity arrangements and the striking uniformity and intertemporal rigidity of franchise contracts copyright 1994 by american economic association

no one likes to be second choice a decision maker is interested in appointing one individual from a group of candidates to a public position with an exogenous wage he must decide in what order to approach them candidates who are more valuable to the decision maker are less likely to be available the candidates preferences have a social component each candidate finds the position more attractive if he is highly ranked by the decision maker relative to the other candidates however the decision maker s preferences are his private information as a result candidates infer the decision maker s evaluation of them based on the number of candidates who have previously turned him down the main result is that when the number of candidates is suficiently large all of the candidates reject the decision maker s offers including those whom he most values moreover the decision maker s payoff is not monotonic in the number of candidates

fees versus royalties and the private value of a patent we compare how much profit an owner of a patented cost reducing invention can realize by licensing it to an oligopolistic industry producing a homogeneous product by means of a fixed fee or a per unit royalty our analysis is conducted in terms of a noncooperative game involving n 1 players the inventor and the n firms in this game the inventor acts as a stackelberg leader and it has a unique subgame perfect equilibrium in pure strategies it is shown that licensing by means of a fixed fee is superior to licensing by means of a royalty for both the inventor and consumers only a drastic innovation is licensed to a single producer

risk premiums in the german day ahead electricity market this paper conducts an empirical analysis of risk premiums in the german day ahead electricity wholesale market we compare hourly price data of the european energy exchange eex auction and of the continuous over the counter otc market which takes place prior to the eex auction data provided by the energy exchange austria exaa has been used as a snapshot of the otc market two hours prior to the eex auction ex post analysis found market participants are willing to pay both significant positive and negative premiums for hourly contracts the largest positive premiums were paid for high demand evening peak hours on weekdays during winter months by contrast night hours on weekends featuring lowest demand levels display negative premiums additionally ex ante analysis found a strong positive correlation between the expected tightness of the system and positive premiums for this purpose a tightness factor has been introduced that includes expectations of fundamental factors such as power plant availability wind power production and demand hence findings by longstaff and wang 2004 can be supported that power traders in liberalised markets behave like risk averse rational economic agents

negative externalities may cause delay in negotiation we study the strategic equilibria of a negotiation game where potential buyers are affected by identity dependent negative externalities the unique equilibrium of long finitely repeated generic games can either display delay where a transaction can take place only in several stages before the deadline or in spite of the random element in the game a well defined buyer exists that obtains the object with probability close to one

concentration in the european electricity industry the internal market as solution abstract this article offers an analysis of the present competitive and regulatory framework of the european electricity sector and the results achieved with the liberalisation process considering the reactions of incumbents to the liberalisation the focus in this work is mainly on the problem of market concentration in the sector the new trends toward the creation of national champions as well as recent mergers between gas suppliers and electricity producers raise serious concerns about abuses of market power and risk of future collusion in particular the strategic linkage of existing markets and the expansion into new ones are analyzed in the light of the multimarket contact theory considering investment in interconnection among member states the internal market issue is investigated as a solution to the risks coming from liberalisation

theoretical and experimental analysis of auctions with negative externalities abstract we investigate a private value auction in which a single entrant on winning imposes a negative externality on two regular bidders in an english auction when all bidders are active regular bidders free ride exiting before price reaches their values in a first price sealed bid auction incentives for free riding and aggressive bidding coexist limiting free riding compared to the english auction we find substantial though incomplete free riding in the clock auction in first price auctions regular bidders bid more aggressively than the entrant and both bid higher than in auctions with no externality predictions regarding revenue efficiency and successful entry between the two auctions are satisfied

emergence of financial markets for electricity a european perspective abstract deregulation directed at european energy markets is proceeding although the speed often may seem slow real changes are coming in the development of physical and especially financial markets for electricity electricity deregulation started in individual countries notably the united kingdom and norway and the norwegian effort spread to the rest of the nordic region before the union s 1996 electricity directive started to have a real impact electricity deregulation is a complicated process involving breaking up of generation monopolies unbundling of generation and transmission consumer choice of suppliers through local distributors and eventually perhaps the establishment of a power pool where physical as well as financial contracts are traded the deregulation process now has gone far enough to reap some experiences the original uk deregulation model which focused mainly on breaking up the generation monopoly proved somewhat inefficient because it didn t offer real consumer choices and opened for inefficient gaming strategies among producers this experience has pushed the united kingdom in the direction of the nordic model norwegian deregulation is peculiar in the sense that new entry to generation is highly restricted on the other hand norway now with the entire nordic region has developed a quite advanced and quite well functioning electricity trading pool with widespread financial trading and good liquidity part of the success of the nordic model comes having a high quality spot price which can be used as a benchmark for the pricing of financial contracts another possible source of success is the high proportion of hydropower for which production volumes can be adjusted quickly and outages and price spikes thus avoided the swiss experience further underscores the importance of a spot price benchmark because the extensive swiss physical trade has allowed a growing volume of contract trade even in the absence of deregulation from these experiences we propose four factors we believe to be instrumental in creating healthy financial power markets the choice of pool model including spot adjustment and forward markets will make or break liquidity a price index is essential for ensuring transparency standardized simple derivative contracts make trading easier and more attractive finally the underlying physical system is important a hydro based system is easy to adjust while a thermal system will have problems with security of supply although the process is slow deregulation is likely to change the european electricity market in profound ways we see the effects mostly as beneficial deregulation will improve efficiency in generation will improve transparency for better consumer choices and allow the emergence of efficient financial trade in electricity if deregulation is all that s done the environmental effects may be adverse because lower prices encourage greater consumption and hence emissions coupled with a sensible environmental policy we believe deregulated markets can minimize the costs of environmental protection

energy efficiency in india assessing the policy regimes and their impacts in the recent years india has emerged as one of the fast growing economies of the world necessitating equally rapid increase in modern energy consumption with an imminent global climate change threat india will have difficulties in continuing with this rising energy use levels towards achieving high economic growth it will have to follow an energy efficient pathway in attaining this goal in this context an attempt is made to present india s achievements on the energy efficiency front by tracing the evolution of policies and their impacts the results indicate that india has made substantial progress in improving energy efficiency which is evident from the reductions achieved in energy intensities of gdp to the tune of 88 during 1980 2007 similar reductions have been observed both with respect to overall indian economy and the major sectors of the economy in terms of energy intensity of gdp india occupies a relatively high position of nine among the top 30 energy consuming countries of the world c 2009 elsevier ltd all rights reserved