how do market reforms affect china s responsiveness to environmental policy a large percentage of total investment in china is allocated by the central government at below market interest rates in pursuit of non economic objectives this has resulted in low rates of return and a high number of non performing loans threatening the future health of the chinese economy as a result reform of capital markets is a high priority of the chinese government at the same time the country is implementing various environmental policies to deal with serious pollution issues in this paper we ask how reforms of the capital market will affect the functioning of a carbon tax this allows us to assess how china s willingness to join global efforts to reduce carbon emissions is influenced by china s current efforts to reduce investment subsidies we compare the costs of a carbon tax in a reformed economy with the costs of a carbon tax in the current subsidized economy we find that in the subsidized economy the tax interaction effect dampens the effect of a carbon tax resulting in smaller reductions in emissions than what would result in a reformed economy importantly we also find that the effect on economic welfare from a carbon tax is lower in the subsidized economy in fact for lower levels of reductions the carbon tax is actually welfare improving these results have important implications for an economy undergoing economic transition the carbon tax rate required to achieve a certain level of emission reductions will be higher in an economy with capital subsidies however the welfare implications of the tax indicate that the current system with capital subsidies is highly distorting implying that there is a high efficiency cost for the non economic objectives the government is pursuing by maintaining this system of subsidies

how to improve the performance of carbon tax in china abstract the chinese government committed to controlling carbon dioxide co 2 emissions and promoting development of non fossil fuels thus it becomes a top priority for the government to develop effective climate policies against such background this paper develops a new multi country computable general equilibrium cge model with detailed energy disaggregation this study evaluates the impact of single policy instrument carbon tax and combined policy mixes in order to investigate driving factors affecting the policy performance the main findings are as follows firstly the driving factors can be classified into two types the first type of factors affects cost effectiveness significantly while the second type generates considerable effect on emission performance secondly cross border externalities function as important barriers to the co 2 emission reduction since they imply extra competitiveness loss and result in considerable carbon leakage finally this paper considers two integrated policy mixes wherein carbon tax revenue is recycled to reduce capital tax or support clean energy subsidy these policy mixes can improve both cost effectiveness and emission performance and thus perform better than carbon tax alone in this way carbon tax revenue can be used to improve the performance looking ahead complicated policy mixes are preferred to improve the performance of china s carbon tax

a time varying copula approach to oil and stock market dependence the case of transition economies abstract we employ the time varying copula approach to investigate the conditional dependence between the brent crude oil price and stock markets in the central and eastern european cee transition economies our results show evidence of a positive dependence between the oil and the stock markets of the six cee countries which is indicative of a contagion between those markets regardless of the changes in the oil price or the cee stock index moreover the dependence patterns in both the center and left tails of the return distributions change over time particularly during the heart of the financial crisis and are best described by the survival gumbel copulas the empirical evidence also suggests that the lower tail dependence is much stronger than that of the upper tail highlighting the importance of contagion during severe contractionary business cycles among the sample markets poland is shown to be particularly sensitive in this regard while hungary and slovenia are the least sensitive

levelized cost of electricity lcoe of renewable energies and required subsidies in china newhuadu business school research fund china sustainable energy program g 1305 18257 national social science foundation of china 12zd059 ministry of education 10 jbg 013

promoting biofuels use in spain a cost benefit analysis abstract public support for renewable energy is usually justified in terms of its contribution to reducing energy dependency an improvement in environmental quality and a stimulation of economic activity and employment in the case of biofuels greenhouse gas emissions reduction has received significant attention nevertheless nowadays there is a lively debate surrounding the convenience of biofuels this is a consequence of the potentially negative impacts revealed from their production on a large scale the aim of the present work is to analyse the potential contribution of biofuels to the main impact categories identified all those impacts categories have been measured in economic terms with the aim of conducting a very simple cost benefit analysis to assess the suitability of biofuel promotion policies in spain since the scope of the analysis is the national level the study seeks to cover three main impact categories i the environmental impact including not only the greenhouse gases but also other kind of regional and local pollutants ii the economic impact or potential stimulus for the national economic activity derived from a new productive sector and iii the potential consequences on the economy derived from using biofuels to reduce the spanish energy dependency results confirm that consuming biofuels has a positive impact on environmental quality mainly due to the reduction of greenhouse gases so2 and particulate matter emissions in contrast analyzing the whole effect on the economy the use of biofuels is displacing income from other economic sectors resulting in a net negative impact in terms of energy dependency biofuels do not significantly contribute to reduce the risk of supply disruptions nor the impact on the economy derived from increases in fuel prices concluding the study shows that the introduction of mandatory targets of biofuel consumption along the timeframe of 2008 2020 in spain could result in a welfare loss for the spanish society

the value added tax its causes and consequences almost unknown in 1960 the value added tax vat is now found in more than 130 countries raises around 20 percent of the world s tax revenue and has been the centerpiece of tax reform in many developing countries this paper explores the causes and consequences of the remarkable rise of the vat a key question is whether it has indeed proved as its proponents claim an especially effective form of taxation to address this it is first shown that a tax innovation such as the introduction of a vat reduces the marginal cost of public funds if and only if it also leads an optimizing government to increase the tax ratio this observation leads to the estimation on a panel of 143 countries for 25 years of a system of equations describing both the probability of vat adoption and the revenue impact of the vat the results point to a rich set of determinants of vat adoption this being more likely for example if a country has a program with the imf and the less open it is to international trade in the revenue equation the presence of a vat does indeed have a significant impact but also a complex one with a negative intercept effect counteracted by positive effects that are greater the higher are per capita income and more tentatively openness while the sign of the revenue impact of the vat is thus in general ambiguous most countries that have adopted a vat seem to have gained a more effective tax instrument in doing so though this is less apparent in subsaharan africa and most without it seem likely to gain from its adoption

measuring contagion between energy market and stock market during financial crisis a copula approach abstract in this paper we apply time varying copulas to investigate whether a contagion effect existed between energy and stock markets during the recent financial crisis using the wti oil spot price the s p500 index the shanghai stock market composite index and the shenzhen stock market component index returns evidence was found for a significantly increasing dependence between crude oil and stock markets after the failure of lehman brothers thus supporting the existence of contagion in the sense of forbes and rigobon s 2002 definition moreover increased tail dependence and symmetry characterize all the paired markets this indicates that significant increases in tail dependence are an actual dimension of the contagion phenomenon and that crude oil and stock prices are linked to the same degree regardless of whether markets are booming or crashing during the sample period finally the contagion effect is found to be much weaker for china than the us the empirical results have potentially important implications for risk management

the cross country implications of alternative climate policies abstract because of worldwide growing concerns about global climate change great interest has been expressed in the potential of alternative climate policies to reduce global carbon emissions in this paper we compare cross country implications of alternative climate policies including unilateral and multilateral climate policies our main findings are as follows firstly there are large differences in cross country effects of alternative unilateral climate policies when the same given carbon emission reductions are achieved in each abating country respectively meanwhile cross border externalities undermine efficiency of unilateral climate policies secondly there are significant differences in cross country implications of alternative multilateral climate policies when the same global emission reductions are allocated in several different ways among abating countries thirdly it is difficult to reach a stable global climate treaty since any abating country has the incentive to argue for small carbon emission reductions finally multilateral climate policies can reduce the negative impacts of cross border externalities but cannot cure all cross border externalities looking ahead it will be a great policy challenge for the world to reduce carbon emissions in a cost effective way

how do u s stock returns respond differently to oil price shocks pre crisis within the financial crisis and post crisis abstract we use a long time series of daily data for 682 firms over a period from january 1990 to december 2012 each firm includes 5 772 daily observations our sample involves a total of 3 936 504 observations to investigate how u s stock returns respond differently to oil price shocks prior to during and after a financial crisis we provide evidence that u s stock returns in turn respond positively to the changes in oil prices during and after such a crisis we use firm level data to find that positive and negative oil price shocks have asymmetric effects on stock returns during the crisis and after the crisis then we examine whether the effect of an oil price shock on stock returns varies across oil intensive industries within the crisis and post crisis our results indicate that stock returns in response to oil price shocks across industries are heterogeneous and the stock returns of some energy intensive manufacturing industries respond more positively to oil price shocks compared with less energy intensive manufacturing industries we use total assets total revenue and the number of employees as proxy variables to measure each firm s size and then examine whether oil price shocks affect stock returns differently across firm sizes we find that big firms are the most strongly and negatively influenced by an oil price shock prior to the crisis on the other hand our results indicate that an oil price shock in the post financial crisis period is positively amplified in the case of medium sized firms

what drives the commodity price beta of oil industry stocks we test theoretical drivers of the oil price beta of oil industry stocks the strongest statistical and economic support comes for market conditions type variables as the prime drivers namely oil price bond rate volatility of oil returns and cost of carry though statistically significant exogenous firm characteristics and oil firms financing decisions have less compelling economic significance there is weaker support for the prediction that financial risk management reduces the exposure of oil stocks to crude oil price variation finally extended modelling shows that mean reversion in oil prices also helps explain cross sectional variation in the oil beta

evaluating the public perceptions of nuclear power in china evidence from a contingent valuation survey national natural science foundation of china 71303199 71373218 ministry of education foundation of china 13yjc790123 11jbgp006 13jzd010 fundamental research funds for the central universities 201122g008 2014221001 national social science foundation of china 13zd167

modeling systemic risk and dependence structure between oil and stock markets using a variational mode decomposition based copula method abstract this study combines the variational mode decomposition vmd method and static and time varying symmetric and asymmetric copula functions to examine the dependence structure between crude oil prices and major regional developed stock markets s p500 stoxx600 djpi and tsx indexes during bear normal and bull markets under different investment horizons furthermore it analyzes the upside and downside short and long run risk spillovers between oil and stock markets by quantifying three market risk measures namely the value at risk var conditional var covar and the delta covar covar the results show that there is a tail dependence between oil and all stock markets for the raw return series by considering time horizons we show that there is an average dependence between the considered markets for the short run horizons however the tail dependence is also found for the long run horizons between the oil and stock markets with the exception of the s p500 index which exhibits average dependence with the oil market moreover we find strong evidence of up and down risk asymmetric spillovers from oil to stock markets and vice versa in the short and long run horizons finally the market risk spillovers are asymmetric over the time and investment horizons

toward optimal meat consumption external cost from meat consumption raises an issue of possible government mechanisms toward mitigation economic theory provides a framework for determining the optimal set of mechanisms considering the associated benefits and costs such a theoretical development rests on consumers responsiveness to alternative mechanisms considering two mechanisms a pigouvian tax and green label education yields tandem theoretical optimal government mechanisms populating this theoretical model with empirically derived elasticities and other parameters provides an application results indicate education alone will likely not yield a high social optimal level of mitigation instead if external costs warrant government mechanisms a pigouvian tax will be required to move consumption toward a socially optimal state

oil price shocks and transportation firm asset prices abstract the transportation sector is a major user of oil based energy even as oil prices continue to fluctuate greatly the impact of oil price changes on transportation firms has heretofore not been adequately examined this paper fills this gap documenting important new findings based on analysis of over two decades of daily data on large changes in oil prices oil price shocks first while transportation firm returns are influenced negatively by oil price increases risks are increased more by oil price declines second firm characteristics are important with the market to book ratio being the most important firm characteristic and roa firm size and the prior run up in prices are also important in influencing oil price related returns betas variances and trading volumes third in the s p transportation sub sector industry concentration is negatively related to returns oil price risk and trading volume and asymmetrically related to returns and market betas these new findings enhance our understanding of the asset price impact of oil price shocks and should be of much interest to scholars corporate executives money managers regulators and policy makers

blend wall economics relaxing us ethanol regulations can lead to increased use of fossil fuels abstract the us environmental protection agency is currently considering a waiver allowing an increase in the fuel ethanol blend limit the blend wall from 10 e10 up to 15 e15 justifications for this waiver are reduced vehicle fuel prices and less consumption of petroleum gasoline leading to energy security a theoretical examination of this waiver reveals an anomaly where a relaxation of this blend wall elicits a demand response under a wide range of elasticities this demand response can actually increase the consumption of petroleum gasoline and thus lead to greater energy insecurity the economics supporting this result and associated policy implications are developed and discussed

global energy subsidies an analytical taxonomy governments around the world have pledged to eliminate or sharply reduce subsidies to energy firms in order to increase economic efficiency and reduce environmental externalities yet definitions of subsidies vary widely and as a result estimates of their global magnitude vary by orders of magnitude i review why energy subsidies are so difficult to define and measure i show why some non standard measures are very poor proxies for subsidy costs and in fact may vary inversely with them in particular recent attempts to treat unpriced externalities as subsidies yield especially misleading results in general energy subsidies as conventionally understood do exist but only comprise a small portion of some very large recently reported estimates the bulk of which are indirect measures that may have little connection with actual costs to governments or allocational inefficiencies

regional and copula estimation effects on eu and us energy equity portfolios the aim of this paper is to investigate the regional interdependence structure of energy equities in the us and in the eu based on weekly stock prices of 28 big energy firms in the two regions fro

an analysis on the short term sectoral competitiveness impact of carbon tax in china abstract market based instruments particularly carbon tax have recently drawn the attention of chinese government by their cost effective contribution to the achievement of china s climate targets most of the recent policy proposals have focused on its long term impact however particularly for policy makers both long term and short term effects of carbon tax would be necessary when determining tax rates we provided a detailed analysis of short term impacts of carbon tax on sectoral competitiveness in this paper we divided china s economy into 36 sectors based on its 2007 input output table in order to examine the ratio of carbon tax added costs to sector gdp we were thus able to determine the impact level of a carbon tax on each sector we then divided the sectoral trade impact into domestic competitiveness with regards to foreign imported products and international competitiveness external to the chinese domestic market we found that a high tax level 100 yuan t co2 may necessitate compensatory measures to certain highly affected industries and that a low tax rate 10 yuan t co2 would generate few competitiveness problems for all industries and may therefore be considered as an appropriate starting point

refined oil import subsidies removal in ghana a triple win abstract in this study claims and counterclaims that fossil fuel subsidies removal yields benefits in terms of budget deficits energy efficiency and mitigation are assessed in order to do this a global computable general equilibrium cge model has been estimated to evaluate the impact of subsidies removal on imported refined oil in ghana on prices carbon dioxide co 2 emissions households demand firm s production and real gdp the simulation experiment points to evidence that subsidy removal raises prices increases the rate of co 2 emissions reduces households demand reduces aggregate output and affects various sectors differently the increased rate of co 2 emissions due to the removal of subsidies is indicative of the existence of the so called green paradox these results underscore the fact that a removal of subsidies on fossil fuels may win in some regards but fail in others a general implication from the applied model therefore is one which supports the assertion that removal of subsidies on fossil fuels removal on energy should be implemented along with policies aimed at stimulating economic activities and reducing the level of co 2 emissions especially where there is evidence of the green paradox

what do we know about carbon taxes an inquiry into their impacts on competitiveness and distribution of income abstract the kyoto protocol to the united nations framework convention on climate change unfccc has set legally binding emissions targets for a basket of six greenhouse gases and timetables for industrialised countries it has also incorporated three international flexibility mechanisms however the articles defining the flexibility mechanisms carry wording that their use must be supplemental to domestic actions this has led to the open debates on interpretations of these supplementarity provisions such debates ended at the resumed sixth conference of the parties cop to the unfccc held in bonn july 2001 and at the subsequent cop 7 in marrakesh november 2001 the final wording in the bonn agreement reaffirmed in the marrakesh accords at least indicates that domestic policies will have an important role to play in meeting annex b countries emissions commitments carbon taxes have long been advocated because of their cost effectiveness in achieving a given emissions reduction in this paper the main economic impacts of carbon taxes are assessed based on a review of empirical studies on existing carbon energy taxes it is concluded that competitive losses and distributive impacts are generally not significant and definitely less than often perceived however given the ultimate objective of the framework convention future carbon taxes could have higher rates than those already imposed and thus the resulting economic impacts could be more acute in this context it has been shown that how to use the generated fiscal revenues will be of fundamental importance in determining the final economic impacts of carbon taxes finally we briefly discuss carbon taxes in combination with other domestic and international instruments

exploring the impacts of a carbon tax on the chinese economy using a cge model with a detailed disaggregation of energy sectors abstract this paper applies a computable general equilibrium model to investigate the impacts of a carbon tax on china s economy and carbon emissions based on china s 2010 input output table to obtain robust simulation results we further disaggregate the energy sectors into eight departments according to energy use characteristics the empirical results indicate that a moderate carbon tax would significantly reduce carbon emissions and fossil fuel energy consumption and slightly reduce the pace of economic growth however a large carbon tax has a significantly negative impact on china s economy and social welfare moreover a large carbon tax would entail marked price changes in china of the fossil fuels in use reducing coal consumption would have the greatest impact on reducing carbon emissions and the ad valorem duty rate for coal would be the highest after levying a carbon tax because it has the highest carbon emission coefficient therefore china should strive to promote clean coal technology which may be crucial to reducing carbon emissions moreover levying a carbon tax would improve the use of clean energy which would be an effective means of reducing carbon emissions therefore the chinese government should formulate the regulations for and pass a carbon tax as early as possible to achieve its carbon emission abatement target and further contribute to mitigating climate change

estimates of energy subsidies in china and impact of energy subsidy reform abstract for a transitional economy such as china some energy subsidies are reasonable and sometimes even necessary for achieving social goals however with rising energy prices and environmental concerns we see conflicts emerging between energy subsidies energy demand supply fundamentals and climate change considerations energy subsidies have important implications for sustainable development through their effects on energy use efficiency and the choice of fuel source this paper applies the price gap approach to estimate china s energy subsidies results indicate that china s energy subsidies amounted to cny 356 73 billion in 2007 equivalent to 1 43 of gdp subsidies for oil products consumption are the largest followed by subsidies for the electricity and coal sectors furthermore a cge model is used to analyze the economic impacts of energy subsidy reforms our findings show that removing energy subsidies will result in a significant fall in energy demand and emissions but will have negative impacts on macroeconomic variables we conclude that offsetting policies could be adopted such that certain shares of these subsidies are reallocated to support other sustainable development measures which could lead to reducing energy intensity and favoring the environment

energy substitution efficiency and the effects of carbon taxation evidence from china s building construction industry as buildings are constructed to be more energy efficient and environmental friendly the building construction industry which is a basic and leading industry of the national economy development has become one of the key sectors for energy conservation and emission reduction in china this paper aims at quantifying both inter factor and inter energy substitution for china s building construction industry and investigate the main driving forces behind energy efficiency changes as well as the co2 abatement effect of a uniform carbon tax in this sector the model is established employing provincial pooled data over 2003 2012 in china by regions hence results between different regions are compared the main findings indicate that i energy and non energy are substitutes whereas individual energy inputs are complementary in china s building construction industry the substitution effect varies across regions due to different factor endowments and marketization levels ii energy price increase and construction scale expansion leads to energy efficiency improvement while substitution and technology present negative influences on energy efficiency iii approximately 3 of the co2 emissions in china s building construction industry can be reduced by carbon taxation based on the integrated own and cross price elasticities of each energy

input substitution effect in china s chemical industry evidences and policy implications abstract the chemical industry is one of the six high energy consuming and emission intensive sectors in china and the chinese government has focused its attention on energy saving and emissions reduction in the sector with the aim of contributing to the objective of energy saving and emission reduction in the sector this article studies the external substitution relationship of capital energy and labor energy using the translog production function and ridge regression the results are as follow the output elasticities of energy labor and capital are positive the substitution elasticities of capital labor capital energy and labor energy are positive and stable and their values are close to 1 which indicates that the three factors are substitutes for one another furthermore based on the above function we measure the level of energy saving and emissions reduction under different scenarios in 2012 policy implications of the results are provided

nonparametric panel data model for crude oil and stock market prices in net oil importing countries abstract this paper introduces an innovative nonparametric panel data approach to model the long run relationship between the monthly oil price index and stock market price indices of ten large net oil importing countries namely the united states japan china south korea india germany france singapore italy and spain in the proposed model we allow the coefficient on the oil price index to be a time varying function which evolves over time in a way that is assumed to be unknown we also allow the common trend function to evolve over time as well as extending the model further to incorporate country specific trend functions we employ a data driven local linear method to estimate these time varying trend and coefficient functions the results show that despite being largely positive there are several downward trends reflecting the aftermath of the iraq war and the recent unprecedented drop in the oil price overall we find that the nonparametric panel data model better captures the way in which the underlying stock oil price relationship has evolved over time in comparison to the point estimates of the parametric counterpart moreover we find that stock market fundamentals play a significant role in determining the oil stock price relationship our findings have important implication for policymakers and financial speculators

effects of carbon taxes in an economy with prior tax distortions an intertemporal general equilibrium analysis abstract this paper analyzes the costs of carbon taxes in a model that recognizes interactions between this tax and pre existing taxes first we examine the extent to which costs of a u s carbon tax are reduced when its revenues finance cuts in income taxes such use of revenues significantly reduces but does not eliminate the overall policy costs the positive overall costs reflect the carbon tax s focus on intermediate inputs and its relatively narrow base in comparison with income taxes we also examine the sensitivity of the carbon tax s costs to the level of pre existing taxes for any given use of revenues welfare costs rise significantly with pre existing tax rates indicating that models disregarding pre existing taxes may substantially understate the costs of new environmental tax initiatives

the role of public policy in optimizing renewable energy development in the greater southern appalachian mountains abstract this research presents a third component of a comprehensive decision support system for energy planning that allows for combining existing electricity generating capabilities with increased use of renewable energy sources it focuses on energy planning at the regional level and concentrates specifically on the greater southern appalachian mountains of the eastern united states a region that was chosen for analysis not only due to its heavy dependence on coal for electricity but also because of its potential for increased use of wind and solar power previous research used a geographic information system gis model for identifying renewable energy potential to provide input data for a multi objective linear programming molp model to determine the optimal constrained mix of renewable energy sources and existing fossil fuel facilities by balancing annual generation costs against the corresponding greenhouse gas emissions this new component of the system analyzes three potential public policies renewable portfolio standard carbon tax and renewable energy production tax credit that have been used to foster increased renewable energy usage these policies require minor modifications to the molp model for implementation the results of these policy cases were then analyzed to determine the impact that these policies have on generation cost and pollution emissions within the region

post fukushima public acceptance on resuming the nuclear power program in china abstract this study investigates social perceptions electricity preference management instruments towards nuclear power in china and evaluates the extent of opposing nuclear power by estimating public willingness to pay wtp to prevent a nuclear power plant from being constructed in their local cities and the neighboring cities it is pretty important to understand the public sentiment towards recommencement of nuclear programs since public acceptance of nuclear energy is one of the determinants for government establishment of a new nuclear project especially the chinese government has resumed the approval of new nuclear power plants and planned to expand this industry in the post fukushima world the findings show that most of the respondents care about the development of nuclear power in china the publics are a bit skeptical about the security of nuclear power since they are worried about nuclear accidents in addition the government is requested to improve policy transparency which is seen as an essential way of alleviating the public nuclear anxieties in china

sell or not sell biodiesel local competition and government measures the introduction of biofuels is one of the objectives of the european union for this reason measures to promote the production and consumption of this product have been implemented such as tax exemptions fixing a minimum amount of mixture or the introduction of public transport that consume biofuels in this paper we test different factors that can affect the introduction of biodiesel in the spanish gasoline market these factors are mainly the level of local competition technical difficulties and local government action empirical evidence shows that a higher level of competition more buses that consume biodiesel and a lower adjustment costs increase significantly the probability of sell biodiesel at service stations these results show how the promotion of competition and public procurement of vehicles can improve the commercialization of biofuels

oil and the macroeconomy since world war ii all but one of the u s recessions since world war ii have been preceded typically with a lag of around three fourths of a year by a dramatic increase in the price of crude petroleum this does not mean that oil shocks caused these recessions evidence is presented however that even over the period 1948 72 this correlation is statistically significant and nonspurious supporting the proposition that oil shocks were a contributing factor in at least some of the u s recessions prior to 1972 by extension energy price increases may account for much of post opec macroeconomic performance

clean air and renewable fuels the market for fuel ethanol in the us from 1984 to 1993 abstract ethanol made from corn has become an increasingly important fuel additive in the us over the past decade the market for ethanol has grown from 550 million gallons in 1984 to approximately 1 5 billion gallons in 1995 recent clean air legislation has mandated the use of cleaner burning fuels in the us in specific regions and seasons the fundamental role of fuel ethanol is changing from a gasoline substitute and octane enhancer to being one of a number of possible clean air additives in addition to these changing market conditions the institutional structure surrounding the ethanol market has changed while there is a uniform national subsidy for ethanol use each state has its own supplemental subsidy level which varied from zero to over 0 40 per gallon recently many state subsidy levels have been declining but significant incentives still remain including the federal 0 54 per gallon incentive this paper explores the economic characteristics of the us ethanol market the market supply and demand for ethanol are estimated econometrically the results highlight the importance of the state and federal incentives and mandates along with transportation costs in making corn based ethanol an attractive alternative to gasoline further investigation using a probit model to predict whether a state has an ethanol market or not reinforces the results of the supply demand market model the implications of the market characteristics for current and future us ethanol policy and clean fuels use are discussed

how large are the impacts of carbon motivated border tax adjustments on china and how to mitigate them shandong social science planning fund program 12djjj12 independent innovation foundation of shandong university iifsdu 2012gn038 ministry of education research of social sciences youth funded projects 13yjc790065 national natural science foundation of china 71203186 71173170 china postdoctoral science foundation 2013m530309 2012t50802

the rebound effect for heavy industry empirical evidence from china abstract energy efficiency improvement will reduce the effective price of energy services and hence at least partially mitigate original expected energy conservation therefore the magnitude of rebound effect is important for the design and timing of an effective energy conservation policy under the framework of translog cost share equations we estimates the direct rebound effect for heavy industry in china for the first time by conducting an empirical research on the relationship between the direct rebound effect and the ease with which energy services can substitute for other inputs additionally asymmetric price responses are specified in the model for the rebound effect estimation empirical results in our paper indicate that the rebound effect for heavy industry in china is about 74 3 this reveals that energy efficiency improvement can save energy to a certain degree since the rebound effect is less than 100 back fire but most of the expected reduction in heavy industry energy consumption is mitigated these findings prove that energy pricing reforms and energy taxes should be further implemented to achieve effective energy conservation in china s 12th five years plan

inventories under joint production an empirical analysis of petroleum refining this study examines the determinants of inventory investment under joint production we simultaneously estimate a set of optimal sales relations variable input demands and a set of euler equations for capital and inventories of raw materials work in process and final products in the petroleum refining industry the euler conditions provide a model for the convenience yield discussed in the returns to storage literature the cost savings from holding inventories and expected changes in marginal production costs are important components of the convenience yield we also find significant cost and stock interactions that may affect short run price and inventory dynamics in petroleum product markets

how do the stock prices of new energy and fossil fuel companies correlate evidence from china abstract this study documents the return and volatility spillover effect between the stock prices of chinese new energy and fossil fuel companies using the asymmetric bekk model based on daily samples taken from august 30 2006 to september 11 2012 the dynamics of new energy fossil fuel stock spillover are found to be significant and asymmetric compared with positive news negative news about new energy and fossil fuel stock returns leads to larger return changes in their counter assets news about both new energy and fossil fuel stock returns spills over into variances of their counter assets and the volatility spillovers depend complexly on the respective signs of the return shocks of each asset the empirical results demonstrate that new energy and fossil fuel stocks are generally viewed as competing assets that positive news about new energy stocks could affect the attractiveness of fossil fuel stocks and that new energy stock investment is more speculative and riskier than fossil fuel stock investment these results have potential implications for asset allocation financial risk management and energy policymaking

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

does britain or the united states have the right gasoline tax this paper develops an analytical framework to assess the second best optimal level of gasoline taxation taking into account unpriced pollution congestion and accident externalities as well as interactions with the broader fiscal system we provide calculations of the optimal taxes for the us and the uk under a variety of parameter scenarios under our central parameter values the second best optimal gasoline tax is 1 01 gal for the us and 1 34 gal for the uk current tax rates are much lower than this in the us and higher in the uk the calculations are moderately sensitive to alternative parameter assumptions the congestion externality is the largest component in both nations revenue raising needs also play a significant role as do accident externalities and local air pollution potential welfare gains from reducing the current uk tax rate are estimated at nearly one fourth the production cost of all gasoline used in the uk even larger gains could be achieved by switching to a tax on vehicle miles with equal revenue yield for the us the welfare gains from optimizing the gasoline tax are smaller but those from switching to an optimal tax on vehicle miles are very large

an optimal u s biodiesel fuel subsidy abstract enhanced environmental quality fuel security and economic development along with reduced prices of blended diesel are often used as justifications for a u s federal excise tax exemption on biodiesel fuels however the possible effect of increased overall consumption of fuel in response to lower total prices mitigating the environmental and fuel security benefits are generally not considered taking this price response into account the optimal u s biodiesel subsidy is derived estimated values of the optimal subsidy are close to the recently expired subsidy revealing the subsidy s environmental and security benefits however further positive environmental and security benefits from the biodiesel tax exemption subsidy may be obtained if the subsidy is combined with a federal excise tax on petroleum diesel

environmental policy and double dividend in a transitional economy abstract although the environmental benefit from implementing a climate tax is usually realized the economic dividend still remains a controversial issue warranting further research this is because the impact of an environmental policy on an economy wide system will depend on factors that differ from one region to the next in this paper we develop a static cge model for liberia that is capable of analyzing both a uniform and a partial carbon tax policy under the uniform policy instituted to ensure mitigation in the range of 20 50 an economic dividend is found for energy employment and welfare in particular energy consumption increases by between 5 and 15 5 respectively interestingly under a second best policy which exempts economically strategic sectors from the tax no economic dividend is found for all three variables this time energy use declines by between 2 and 9 these suggest that a uniform environmental tax policy is a more viable option for liberia in particular as it does not only generate economic dividend for employment and welfare it also incentivizes liberia s adoption and use of renewable energy technologies in general based on the results obtained further conditions for the feasibility of a double dividend are proposed

global financial crisis and dependence risk analysis of sector portfolios a vine copula approach we use regular vine r vine canonical vine c vine and drawable vine d vine copulas to examine the dependence risk characteristics of three 20 stock portfolios from the retail manufacturing and gold mining equity sectors of the australian market in periods before during and after the 2008 2009 global financial crisis gfc our results indicate that the retail portfolio is less risky than the manufacturing counterpart in the crisis period while the gold mining portfolio is less risky than both the retail and manufacturing sector portfolios both the retail and gold stocks display a higher propensity to yield positively skewed returns in the crisis periods contrary to the manufacturing stocks the r vine is found to best capture the multivariate dependence structure of the stocks in the retail and gold mining portfolios while the d vine does it for the manufacturing stock portfolio these findings could be used to develop dependence risk and investment risk adjusted strategies for investment rebalancing and hedging which more adequately account for the downside risk in various market conditions

oil shocks and their impact on energy related stocks in china abstract this paper contributes to the current literature by adopting time varying conditional correlation and asset pricing models to discover how the dynamics of international oil prices affect energy related stock returns in china after conditioning for structural instability the results show a much stronger relation following the 2008 financial crisis we argue that this reflects the fact that investors in the chinese stock market especially for energy related stocks are more sensitive to the shocks in international crude oil market

the copula garch model of conditional dependencies an international stock market application abstract modeling the dependency between stock market returns is a difficult task when returns follow a complicated dynamics when returns are non normal it is often simply impossible to specify the multivariate distribution relating two or more return series in this context we propose a new methodology based on copula functions which consists in estimating first the univariate distributions and then the joining distribution in such a context the dependency parameter can easily be rendered conditional and time varying we apply this methodology to the daily returns of four major stock markets our results suggest that conditional dependency depends on past realizations for european market pairs only for these markets dependency is found to be more widely affected when returns move in the same direction than when they move in opposite directions modeling the dynamics of the dependency parameter also suggests that dependency is higher and more persistent between european stock markets

oil price uncertainty and the u s stock market analysis based on a garch in mean var model abstract this paper uses a bivariate garch in mean var model to examine the effect of oil price uncertainty on the u s real stock returns at the aggregate and sectoral levels estimation results suggest that there is no statistically significant effect of oil price volatility on the u s stock returns the absence of an uncertainty effect might be explained by the fact that companies are likely to hedge against fluctuations in oil prices it could also stem from the ability of most companies to transfer the higher cost of oil to customers moreover the impulse responses indicate that accounting for oil price uncertainty oil price increases and decreases have symmetric effects on the u s aggregate stock returns in that energy price increases and decreases are estimated to have equal and opposite effects on the u s financial market however this symmetric effect doesn t hold across all the sectors studied in this paper

social optimal household food waste taxes and government incentives in 2010 21 of the total food available for consumption in the united states was wasted at the household level in response to this waste a number of counties and u s localities have instituted policies disposal taxes directed toward reducing this waste however currently there is no federal food waste disposal tax the aim of this paper is to establish a theoretical foundation for household food waste and based on this theory to determine the social optimal food waste disposal tax along with a government incentive the theory unravels the interrelation between social food insecurity and external environmental costs which is not generally considered by households when they waste food a social optimal disposal tax and government incentive involve pigovian mechanisms and governmental expenditures for a zero level of food waste the social optimal disposable tax and government incentive approach infinity

efficiency enhancing taxation in two sided markets this paper examines the efficient provision of goods in two sided markets and characterizes optimal specific and ad valorem taxes we show that i a monopoly may have too high output compared to the social optimum ii output may be reduced by imposing negative value added taxes subsidy or positive specific taxes

integrating sustainability into city level co2 accounting social consumption pattern and income distribution abstract from a sustainability perspective city level co2 emissions require reconsiderations correspondingly the economy environment society nexus should be incorporated into city scale co2 accounting therefore in this study the semi closed io model is integrated with a hem to calculate co2 emissions arising from the social consumption pattern and income distribution and to explore economic drivers behind co2 variations this method is applied to a case study of beijing result demonstrate that beijing in 2012 witnessed something different from that in 2005 1 co2 emissions centred in the internal linkages of a broader class of consumption terms with high economic output mainly driven by interprovincial exports 2 imports increasingly helped decarbonize the mixed net forward and backward co2 linkages of consumption items and 3 income driven co2 emissions excluding demand side parts persisted which were more obvious on the supply side where households have more economy wide effects besides urban households played an essential role in household wide co2 reductions this paper ended with corresponding conclusions policy implications and directions for future work

an ethanol blend wall shift is prone to increase petroleum gasoline demand abstract in 2010 the u s environmental protection agency announced a waiver allowing an increase in the fuel ethanol blend limit the blend wall from 10 e10 to 15 e15 justifications for the waiver are reduced vehicle fuel prices and less consumption of petroleum gasoline leading to greater energy security empirical investigations of this waiver using monte carlo simulations reveal an anomaly where a relaxation of this blend wall elicits a demand response under a wide range of elasticities this demand response can actually increase the consumption of petroleum gasoline and thus lead to greater energy insecurity the economics supporting this result and associated policy implications are developed and discussed

wavelet based test of co movement and causality between oil and renewable energy stock prices abstract we studied co movement and causality between oil and renewable energy stock prices using continuous and discrete wavelets firstly to obtain information on dynamic correlations over time and for different time scales from wavelet coherence and secondly to obtain information on linear and non linear granger causality in the time frequency domain for general and sectoral renewable energy indices for the period 2006 2015 our findings indicate that dependence between oil and renewable energy returns in the short run was weak but gradually strengthened towards the long run mainly for the period 2008 2012 our causality tests provide evidence against linear causality at higher frequencies and in favour of unidirectional and bidirectional linear causality at lower frequencies in contrast we found consistent evidence of non linear causality running from renewable energy indices to oil prices at different time horizons and mixed evidence of causality running from oil to renewable energy prices these results have potential implications for investors in terms of hedging and for policymakers in terms of policy support decisions regarding the development of renewable energy

biofuel subsidies versus the gas tax the carrot or the stick abstract this paper provides an analytical framework to examine the relative efficiencies of a revenue neutral biofuel subsidy and a gas tax in the presence of pre existing distortions and growing substitutability between fuels both policies are set to achieve a targeted reduction in gasoline use at the state level the model is then calibrated for a small open economy such as illinois which is one of the largest producers of biofuels such as ethanol in the u s the main result of the paper shows that raising the biofuel subsidy use reduces overall welfare by more than a higher gas tax both aimed to achieve a targeted reduction in pure gasoline the relative efficiency of the higher gas tax is primarily due to it exacerbating the pre existing distortion in the biofuel market by less than the subsidy moreover for current parameter estimates welfare improving policy combinations for achieving a targeted amount of energy security are higher gas taxes combined with lower biofuel subsidies and a lower tax on income however the preference for a gasoline labor tax swap shrinks as the elasticity of substitution between the two fuels rises

the multivariate flexible accelerator model its empirical restrictions and an application to u s manufacturing this paper derives an exhaustive set of restrictions implied by the multistock flexible accelerator specification of the adjustment cost model for the firm the flexible accelerator specification of the demand for capital and labor is estimated using u s manufacturing annual data for the 1947 1976 period the consistency of the data with the model is examined by testing the validity of the derived restrictions finally the conditions which permit aggregation over firms are determined and tested empirically the flexible accelerator specification has been popular in the empirical literature on interrelated investment and employment decisions see nadiri and rosen 38 coen and hickman 10 and schramm 40 more recent examples include sargent 39 berndt fuss and wavermann 4 berndt and morrison 6 and meese 34 under suitable assumptions the specification may be rationalized by the adjustment cost model of the firm eisner and strotz 13 lucas 30 mortensen 35 extends the work of lucas and derives some empirically testable restrictions of the accelerator specification that are implied by the adjustment cost framework the broad objective of this paper is to provide a more rigorous and comprehensive test of the adjustment cost model than is presently found in the literature this objective is achieved in three stages first we offer an alternative derivation of the mortensen restrictions and more importantly we prove theorem 1 that his restrictions are exhaustive i e we establish an integrability result for the flexible accelerator adjustment cost model second the flexible accelerator specification of the demand for capital and labor is estimated using total u s manufacturing annual data for the 1947 76 period it is assumed that firms minimize expected production costs subject to a technology which implies that capital and labor stocks are costly to adjust while a third factor materials is freely adjustable the consistency of the data with the adjustmentcost framework is examined by testing for the validity of the derived restrictions further we test the validity of some separability restrictions on the adjustmentcost technology that to varying degrees are imposed a priori in all of the cited empirical studies finally we provide a complete characterization of the individual firm technologies which justify the common assumption of the existence of a representative firm this problem of aggregation over firms which has been

returns to scale in the long run the dynamic theory of cost the concept of scale economies is muddled by the problem specific nature of determining the length of run the distinction between the short and long run becomes a prime consideration in determining the appropriate time scale of economic decision making strategies these strategies center on the choice of factors of production that are assumed to be fixed when factor allocation decisions are to be made

financial markets in east asia and europe during the global financial crisis hen the asian nancial crisis erupted in july 1997 an increase inregional nancial market co movements followed even though theincreases in correlations were the largest in east asia similar increasesoccurred in europe chakrabarti and roll 2002 numerous studies haveshown that nancial crises tend to spread across country borders and nancialmarkets often move more closely together during such episodes however each nancial crisis is unique in its own way and the recent nancial crisis originat ing in the us subprime market is no exception while there are a number ofdifferent explanations for the asian nancial crisis most economists seem toagree that excessive lending practices in the us property market and a rapidexpansion of complex nancial products were some of the main reasons behindthe recent crisis the spread of the subprime crisis is also different from previ ous crises originating in the subprime sector it soon spread through the us nancial system and then onward to the european nancial sectors where nancial institutions were exposed to the sudden and severe increase indefaults most asian countries on the other hand have primarily been affectedthrough real economy channels rather than via a spread among countries nan cial sectors not only developing countries but also advanced countries wereaffected by sudden shortfalls in their export sectors however even though thespread of the crisis has occurred through different channels it has affected rm

dynamic impacts of high oil prices on the bioethanol and feedstock markets this study investigates the impacts of high international oil prices on the bioethanol and corn markets in the us between 2007 and 2008 the prices of major grain crops had increased sharply reflecting the rise in international oil prices these dual price shocks had caused substantial harm to the global economy employing a structural vector auto regression model svar we analyze how increases in international oil prices could impact the prices of and demand for corn which is used as a major bioethanol feedstock in the us the results indicate that an increase in the oil price would increase bioethanol demand for corn and corn prices in the short run and that corn prices would stabilize in the long run as corn exports and feedstock demand for corn decline consequently policies supporting biofuels should encourage the use of bioethanol co products for feed and the development of marginal land to mitigate increases in the feedstock price

will carbon motivated border tax adjustments function as a threat abstract due to large incremental carbon emissions china might become an important target country of cbta carbon motivated border tax adjustments to levy cbta could reduce china s emissions meanwhile china s emissions reduction could also be achieved by china s climate policies termed as cbta emissions equivalent policies this paper contributes to the discussion on cbta by comparing the potential regional effects of cbta and cbta emissions equivalent policies the main findings are as follows 1 cbta and cbta emissions equivalent policies would result in relocations of outputs across regions and countries affect the structure of economy and contribute to world s emissions reduction 2 there would be significant differences in the regional effects between cbta and cbta emissions equivalent policies 3 compared to carbon tax cbta would be a costly and inefficient policy instrument to reduce emissions but could function as an effective coercion strategy 4 these policies would result in competitiveness issue and rebound effects wherein different countries would be affected differently china is a large economy and energy consumer with high openness to international trade looking ahead the chinese government should consider the potential interactions between china and other economies when designing tax reforms

china s strategy for carbon intensity mitigation pledge for 2020 evidence from a threshold cointegration model combined with monte carlo simulation methods abstract this paper specifies a nonlinear threshold cointegration to analyze the nonlinear relationship between carbon intensity and economic growth in china the tests and estimated results clearly confirm that fast paced economic growth that is the growth rate of gross domestic product gdp is greater than 9 053 impede the reduction of carbon intensity because it weakens the negative effects of tertiary industry development and energy efficiency on carbon intensity while it also increases the positive effect of unclean energy mix on carbon intensity in order to find a moderate range of economic growth rate that is both beneficial for industrial structuring and energy mix transformation and at the same time facilitate reduction in carbon intensity monte carlo simulations are employed the results show when the growth rate of gdp is between 7 and 8 4 it can promote structural bonus of industrial structure and energy consumption structure on carbon intensity and carbon intensity in 2020 would decline by about 40 60 compared to 2005 level these conclusions mean it is necessary for china to carefully set its economic growth target through transformation and optimization of its economic structure and energy mix in order to continuously reduce carbon intensity

can the u s ethanol industry compete in the alternative fuels market the u s ethanol fuel industry has experienced preferential treatment from federal and state governments ever since the energy tax act of 1978 exempted 10 ethanol gasoline blend gasohol from the federal excise tax combined with a 54c gal ethanol import tariff this exemption was designed to provide incentives for the establishment and development of a u s ethanol industry despite these tax exemptions until recently the u s ethanol fuel industry was unable to expand from a limited regional market ethanol was dominated in the market by mtbe methyl tertiary butyl ether only after mtbe was found to contaminate groundwater and consequently banned in many states did the demand for ethanol expand nationally limit pricing on the part of mtbe refiners is one hypothesis that may explain this lack of ethanol entry into the fuel additives market as a test of this hypothesis a structural vector autoregression svar model of the ethanol fuel market is developed the results support the hypothesis of limit pricing behavior on the part of mtbe refiners and suggest the u s corn based ethanol industry is vulnerable to limit price competition which could recur the dependence of the corn based ethanol price on supply determinants limits u s ethanol refiners ability to price compete with sugar cane based ethanol refiners without federal support u s ethanol refiners may find it difficult to compete with cheaper sugar cane refined ethanol chiefly from brazil

estimating dynamic dual models under nonstatic expectations in this paper we derive a system of equations depicting agents dynamic decision rules under nonstatic price expectations based on the adjustment cost model of the firm the integrability conditions which can serve to guide the specification of flexible functional forms are established a two stage econometric model permitting empirical examination of both the expectations formation process and the dynamic structure of the industry is estimated using two different data series for u s production agriculture the estimation results suggest evidence of the presence of nonstatic price expectations in dynamic dual models for u s production agriculture

why are there large differences in performances when the same carbon emission reductions are achieved in different countries great interest has been in unilateral climate policies given present difficulty of establishing stable global coordinated agreements in this paper we investigate underlining factors explaining large differences in performances when the same carbon emission reductions are achieved in different abating countries to this end we develop a new multi country general equilibrium model incorporating six countries or world regions two goods six production inputs capital mobility energy mobility and international trade meanwhile we adopt two performance indicators with carbon leakage representing environmental efficiency and carbon emission abatement costs revealing cost effectiveness our findings are as follows firstly there are large differences in performances among these unilateral climate policies as evidenced by large differences in leakage rates and carbon emission abatement costs secondly the new global climate treaties to replace the kyoto protocol should be able to induce more carbon emission reductions in countries with low carbon emission reduction costs since such setting contributes to global cost savings finally developed countries have high carbon emission abatement costs compared with large developing countries china and india in this paper implying that there should be trade off mechanisms between efficiency and equity regarding how to allocate carbon emission reductions among countries

price and inventory dynamics in petroleum product markets abstract unlike many studies of commodity inventory behavior this paper estimates a model with endogenous spot and forward prices inventories production and net imports our application involves markets for refined petroleum products in the united states our model is built around the supply and demand for storage we estimate the model using generalized method of moments and perform dynamic simultaneous simulations to estimate the impacts of supply and demand shocks supply curves for the industry are inelastic and upward sloping high inventory levels depress prices inventories fall in response to higher sales consistent with production smoothing under higher input prices refiners reduce their stocks of crude oil but increase their product inventories consistent with cost smoothing in some cases imports of products are more variable than production or inventories

impacts of climate policy on the competitiveness of canadian industry how big and how to mitigate competitiveness concerns have been at the forefront of climate policy debates in canada particularly as a result of its high energy intensity and significant exposure to international markets this paper uses a dynamic computable general equilibrium model to assess the likely impacts on sectoral competitiveness that would accompany efforts to meet greenhouse gas mitigation targets that have been set by the canadian government additionally it evaluates several design mechanisms that could be used to reduce the negative competiveness impacts associated with adoption of domestic climate policies the analysis suggests that several sectors would likely face significant competiveness challenges under a reference scenario in which permits are given to emitters in lump sum however it finds that competiveness impacts can be minimized by using output based recycling of permits or by using border tax adjustments

toward an optimal u s ethanol fuel subsidy abstract enhanced environmental quality fuel security and economic development along with reduced prices of ethanol gasoline blends are often used as justifications for the u s federal excise tax exemption on ethanol fuels however the possible effect of increased overall consumption of fuel in response to lower total price mitigating the environmental and fuel security benefits are generally not considered taking this price response into account the optimal u s ethanol subsidy is derived estimated values of the optimal subsidy reveal that the subsidy s environmental and security benefits are questionable however positive environmental and security benefits from the ethanol tax exemption subsidy may be obtained if the subsidy is combined with an increase in the excise tax on gasoline

financial subsidies to the australian fossil fuel industry abstract a common claim during international greenhouse gas reduction negotiations has been that domestic emissions cuts will harm national economies this argument fails to consider the distorting effect of existing financial subsidies and associated incentives to fossil fuel production and consumption provided by governments in most developed countries these subsidies support a fossil fuel energy sector that is the major contributor to global greenhouse gas emissions and conflict with attempts to expand the role of sustainable energy technologies reform of these types of subsidies has the potential to provide substantial gains in economic efficiency as well as reductions in carbon dioxide emissions a no regrets outcome for the economy and the environment this paper examines financial subsidies to fossil fuel production and consumption in australia and estimates the magnitude of the subsidies subsidies and associated incentives to fossil fuel production and consumption in australia are similar to those in the united states and the other countries that have pushed for increased flexibility during international negotiations

the impacts of carbon tax and complementary policies on chinese economy under the pressure of global warming it is imperative for chinese government to impose effective policy instruments to promote domestic energy saving and carbon emissions reduction as one of the most important incentive based policy instruments carbon tax has sparked a lively controversy in china this paper explores the impact of carbon tax on chinese economy as well as the cushion effects of the complementary policies by constructing a dynamic recursive general equilibrium model the model can describe the new equilibrium for each sequential independent period e g one year after carbon tax and the complementary policies are imposed and thus describe the long term impacts of the policies the simulation results show that carbon tax is an effective policy tool because it can reduce carbon emissions with a little negative impact on economic growth reducing indirect tax in the meantime of imposing carbon tax will help to reduce the negative impact of the tax on production and competitiveness in addition giving households subsidy in the meantime will help to stimulate household consumptions therefore complementary policies used together with carbon tax will help to cushion the negative impacts of carbon tax on the economy the dynamic cge analysis shows the impact of carbon tax policy on the gdp is relatively small but the reduction of carbon emission is relatively large

china s regional balanced development based on the investment in power grid infrastructure abstract due to the stark reality of regional development disparities china has to confront the sustainable development challenges brought about by social inequality to compensate for these regional differences in natural resource endowments effective investment in power grid infrastructure pgi and improvement of power grids might prove helpful in reducing poverty and narrowing the development gap this paper constructs a peripheral degree index pdi of power grid to measure the effective distance between electricity delivering areas and receiving regions moreover we discuss how to efficiently locate the investment in pgi and optimize the allocation of limited financial resources the results show investment in pgi has higher marginal benefit for less developed provinces in energy delivering regions and more importantly improvement of the grid infrastructure in central areas which connect energy receiving and delivering regions particularly to improve the grid facilities in the central areas could reduce electricity transmission cost and help to alleviate the railway strain for coal transportation therefore our findings suggest that it is more advisable to locate the investment of power grid infrastructure in the central provinces that are located at strategic conjunctions of the nationwide power grid including shanxi henan hubei and hebei

interdependence of oil prices and stock market indices a copula approach article i nfo article history in this paper we study the relationship between the oil price and stock market index of various countries between 1982 and 2007 we exclude oil and gas stock companies from the stock indices to remove the obvious direct linkage oil price series are converted into local currency to account for possible exchange rate effects the method of copula is used to model the general dependence between stock returns and oil price returns our findings suggest a weak dependence between oil prices and stock indices for most cases which are consistent with the results from previous studies exceptions are for the stock index returns of large oil consuming and producing countries united states and canada which are shown to have a relatively strong dependence with the oil price series the introduction of euro in 1999 altered considerably dependence between oil prices and stock returns

on estimating dynamic factor demands many recent empirical studies on inter related factor demands involve factor demand functions whose arguments depend on the researcher s arbitrary normalization rule this paper shows how sensitive the estimated elasticities are to the various normalizations that are possible alternatives that are not dependent on a normalization are suggested

four myths surrounding u s biofuels the rapid growth of biofuels has elicited claims and predictions concerning the current and future role of these fuels in the u s vehicle fuel portfolio these assertions are at times based on a false set of assumptions concerning the biofuel s market related to the petroleum and agricultural commodities markets and the nonmarket consequences of our automobile driving as an aid in clarifying these market relations the following four biofuel myths are presented 1 biofuels will be adopted because we will soon run out of oil 2 biofuels will solve the major external costs associated with our automobile driving 3 biofuels cause food price inflation the food before fuel issue and 4 biofuels will become a major vehicle fuel

is there dependence and systemic risk between oil and renewable energy stock prices abstract we study systemic risk and dependence between oil and renewable energy markets using copulas to characterize the dependence structure and to compute the conditional value at risk as a measure of systemic risk we found significant time varying average and symmetric tail dependence between oil returns and several global and sectoral renewable energy indices our evidence on systemic risk indicates that oil price dynamics significantly contributes around 30 to downside and upside risk of renewable energy companies these results have important implications for risk management and renewable energy policies

price and expenditure elasticities of residential energy demand during urbanization an empirical analysis based on the household level survey data in china abstract urbanization one of the most obvious characteristics of economic growth in china has an apparent lock in effect on residential energy consumption pattern it is expected that residential sector would become a major force that drives china s energy consumption after urbanization process we estimate price and expenditure elasticities of residential energy demand using data from china s residential energy consumption survey crecs that covers households at different income levels and from different regional and social groups empirical results from the almost ideal demand system model are in accordance with the basic expectations the demands for electricity natural gas and transport fuels are inelastic in the residential sector due to the unreasonable pricing mechanism we further investigate the sensitivities of different income groups to prices of the three types of energy policy simulations indicate that rationalizing energy pricing mechanism is an important guarantee for energy sustainable development during urbanization finally we put forward suggestions on energy pricing reform in the residential sector based on characteristics of china s undergoing urbanization process and the current energy consumption situations

uncertainty and the convenience yield in crude oil price backwardations abstract this study examines why firms hold stocks of crude oil particularly during price backwardations when spot prices exceed prices for forward delivery using a stochastic control model this paper shows that the equilibrium value of inventories contains the conventional hotelling principle the convenience yield from the classical theory of storage and an option value related to price uncertainty our empirical results suggest that a convenience yield and risk premium are important elements of crude oil price backwardations

comparing climate policies to reduce carbon emissions in china new huadu business school research fund national social science foundation of china 12zd059 shandong social science planning fund program 12djjj12 independent innovation foundation of shandong university iifsdu 2012gn038 ministry of education research of social sciences china postdoctoral science foundation 2013m530309

taxation unemployment and growth dynamic welfare effects of green policies abstract this paper analyzes the effects of environmental tax reforms on a small open economy the labor market is characterized by union wage setting the carbon tax acts as an implicit tariff which gives rise to terms of trade gains the terms of trade effect together with the union wage setting leads to a positive relationship between the capital labor ratio and net foreign wealth in the short run the disinvestments in real and financial capital give temporary room for higher consumption and instantaneous utility the long run effect on instantaneous utility is more uncertain a strong double dividend may exist

welfare maximization pricing and allocation with a product performance or environmental quality standard illustration for the gasoline and additives market programming models approximate market prices and quantities when regulations constrain firm choices because market outcomes result when welfare is appropriately defined and includes performance and environmental constraints this study discusses market operation in quality constrained sectors like gasoline and additives processors expand output until marginal processing cost equals the processing margin between product revenues and raw material costs retailers who buy gasoline and additives from processors and sell blended retail gasoline price sales at a marginal cost that includes the blended input value plus adjustments for values of constrained attributes and market supplies and demands of measurable attributes like octane are balanced this method can enhance predictions about the effects of new policies that regulate product quality analysis can now include price and output adjustment in factor and product markets and the competitiveness of new processes and products

oil prices and mena stock markets new evidence from nonlinear and asymmetric causalities during and after the crisis period this article investigates the potential of nonlinear causal relationships between world oil prices and stock markets in middle east and north africa mena countries during a black swan period that is characterized by rarity and devastating impacts our study is carried out using the daily data for 11 mena countries over the period from 2 july 2007 to 27 august 2012 by using the nonlinear and asymmetric causality test of kyrtsou and labys 2006 we mainly find that i the oil prices and mena stock markets interact in a nonlinear manner ii the signs of changes in the causing variables are important for detecting the true causality links between the variables and iii the nonlinear causality is more pronounced in the case of the brent than west texas intermediate oil prices

are oil and gas stocks from the australian market riskier than coal and uranium stocks dependence risk analysis and portfolio optimization abstract this article models the dependence risk and resource allocation characteristics of two 20 stock coal uranium and oil gas sector portfolios from the australian market in the context of the global financial crisis of 2008 2009 the modeling framework implemented consists of pair vine copulas and linear and nonlinear portfolio optimization methods with respect to five risk measures the paper s objectives are to find out if the oil and gas stocks are riskier than the coal and uranium stocks to identify the optimization method and risk measure that produce the best risk return trade off to recognize the stocks in which the optimal weight allocations converge on average and to acknowledge the vine copula model that best accounts for the overall dependence of the energy portfolios the research findings indicate that the oil stocks have higher dependence risk than the coal uranium and gas stocks in financial crisis periods the higher risk of the oil stocks is confirmed by the larger concentration of symmetric and asymmetric dependence they have in the negative tail the canonical vine c vine copula model is observed to better capture the overall dependence of the energy portfolios the combination of a pair c vine copula and nonlinear portfolio optimization produces the highest return relative to risk the optimal weight allocations converge on average in some stocks