exploring policy options for a transition to sustainable heating system diffusion using an agent based simulation change in home heating to more efficient and renewable systems is important for a sound climate policy the present paper aims to identify potential interventions for the uptake of wood pellet heating in norway using an agent based model abm the theoretically based empirically founded agent based simulation demonstrates that financial support i e a stable wood pellet price and technical development i e functional reliability improvement have to be established all at the same time for a successful wood pellet market to start furthermore a soft intervention through persuading households to use environmentally beneficial heating system is not a promising driver for wood pellet diffusion limitations and suggestions for future work are also discussed

catastrophe economics the national flood insurance program hurricane betsy which hit louisiana september 9 1965 was one of the most intense deadly and costly storms ever to make landfall in the united states it killed 76 people in louisiana and caused 1 5 billion in damage equal to nearly 10 billion in 2010 dollars in 1965 no flood insurance was available so victims had to rely on friends and family charities or federal relief after that catastrophe the u s government established a new program in 1968 the national flood insurance program nfip to make flood insurance widely available now after more than 40 years of operation the nfip is today one of the longest standing government run disaster insurance programs in the world in this paper i present an overview of the 40 years of operation of the national flood insurance program starting with how and why it was created and how it has evolved to now cover 1 23 trillion in assets i analyze the financial balance of the nfip between 1969 and 2008 excluding the 2005 hurricane season which included hurricane katrina as an outlier policyholders have paid nearly 11 billion more in premiums than they have received in claim reimbursements over that period however the program has spent an average of 40 percent of all collected premiums on administrative expenses more than three quarters of which were paid to private insurance intermediaries who sell and manage flood insurance policies on behalf of the federal government but do not bear any risk i present challenges the nfip faces today and propose ways those challenges might be overcome through innovative modifications

what drives households to buy flood insurance new evidence from georgia abstract benefiting from access to detailed data on the federally run national flood insurance program for the entire state of georgia usa we analyze residential flood insurance purchasing behavior in that state over more than three decades 1978 2010 the demand for flood insurance on an extensive margin based on take up rates is found to be relatively price inelastic aligned with the behavioral economics literature recent flood events temporarily increase purchases but this effect fades after 3 years we also find that the proportion of developed area in floodplains has a significant positive impact on insurance take up rates contrary to what is often assumed we do not find evidence that insurance purchase and mitigation efforts are substitutes educated individuals individuals over the age of 45 and african americans are all else equal more likely to purchase flood insurance

organisation and governance of urban energy systems district heating and cooling in the uk a number of uk urban authorities are developing combined heat and power chp with district heating and cooling dhc networks as a means to achieve local sustainable and affordable energy and to contribute to economic regeneration findings from case study research in three uk cities are used to explore the local energy governance and organisation lego models adopted in the context of privatised centralised energy markets local developers are reliant on sources of social capital to make systems work given limited support from public policy and limited access to finance local actors drawing on non local community energy and commercial and technical networks of expertise work to introduce the technology into strategic planning establish its legitimacy and the legitimacy of a form of multi organisation suited to numerous stakeholders secure finance negotiate risks and responsibilities and engage with energy markets designed for large scale centralised provision for dhc to make a fully effective contribution to uk sustainable urban energy a more supportive government policy framework offsetting the difficulties of a centralised energy market will be needed to maximise the benefit of locally knowledgeable action the policy framework must be responsive to the specificity of locally appropriate configurations of actors and material infrastructure

environmental management of a tourist destination a factor of tourism competitiveness although research to date has addressed various elements of destination competitiveness there has been little attempt to systematically and comprehensively study the environmental competitiveness from the managerial perspective since the calgary tourism competitiveness model brought a systematic approach to tourism competitiveness research this paper selectively uses its management element as a tool to link the competitiveness and environmental management following the model the destination management is divided into two parts 1 managerial and 2 marketing e orts this paper studies them from environmental perspective first destination environmental competitiveness can be increased by appropriate managerial e orts related to environmental impact ei and environmental quality eq management second the destination competitiveness can be enhanced through certain environmental marketing activities further environmental management is categorised into groups management by codes of conduct by self developed environmental practice by certi ed or awarded best practice and by accreditation schemes their usefulness for environmental destination management and competitiveness is evaluated 1999 elsevier science ltd all rights reserved

supply side investments an international analysis of the return and risk relationship in the travel leisure sector abstract this study investigates supply side investments in the tourism sector analysing the return and risk relationship of investments in tourism across several countries the performance of tourism sector companies listed on the stock exchange for the top one dozen countries according to the world economic forum wef tourism rankings is investigated by region across these countries and within each country by comparison to other sectors several metrics are used to compare the risk adjusted returns over a 15 year period ending march 2007 and sub periods to check the persistence of performance over time the results present a strikingly different ranking than those of the wef the implications for the flow of investment funds are of importance in a global capital market money will flow to those investments with the highest expected returns for a given risk level and this has consequential impacts for economic growth and employment in the tourism sector

application of the modified tobin s q to an uncertain energy saving project with the real options concept abstract this paper is to develop a modified tobin s q evaluation method which successfully combines the evaluation criteria of the traditional tobin s q and the real options this study provides flexible thinking for decision making criteria that is it clearly provides decision makers with a reference in choosing enter or exit strategies such as quantitative indicators references the proposed model introduces two variables stochastic process in continuous time and explores the impact of the occurrence of unexpected events on the project value so that it can more authentically response to the project value the studied issue deals with the firms that have not established energy saving equipment yet it attempts to figure out the optimal timing to adopt an energy saving investment project when it is beneficial and the optimal timing to terminate it when the continuous operation of that business is unprofitable the future discounted benefit cost ratio q follows the geometric brownian motion with the poisson jump process and the replacement of investment equipment except for the evaluation of energy saving equipment investment project the proposed model can be applied to other related project evaluation issues such as energy saving co 2 emission reduction or general investment projects

destination competitiveness applying different models the case of slovenia abstract a tourism country s competitiveness is important especially when countries strive for bigger market shares tourism managers have to identify and explore competitive advantages and analyse the destination s competitive position the degree to which a country can benefit from its tourism sector depends largely on this sector s competitive position in the international tourist market this paper refers to the de keyser vanhove model of a competitive destination which was applied to slovenia in 1998 it also studies the integrated model of destination competitiveness developed in a collaborative effort of researchers dealing with the cases of korea and australia and examines its determinants and individual competitive indicators as perceived by slovenian tourist stakeholders on the supply side the result shows that slovenia is more competitive in its natural cultural and created resources but less competitive in the management of tourism and according to the integrated model demand conditions with both uncompetitive elements reducing the slovenian tourism industry s ability to add value the end discussion points out weaknesses in the development of tourism competitiveness models and calls for greater unity with the competitiveness factor theory and for more caution when creating the main competitiveness factors and models

monetary valuation of insurance against flood risk under climate change climate change is projected to increase the risk of natural disasters such as floods and storms in certain regions this is likely to raise the demand for natural disaster insurance we present a stated preference survey using choice modeling with mixed logit estimation methods in order to examine the effects of climate change and the availability of government compensation on the demand for flood insurance by dutch homeowners currently no private insurance against flood damage is offered in the netherlands the results indicate that there are opportunities for the development of a flood insurance market 2012 by the economics department of the university of pennsylvania and the osaka university institute of social and economic research association

the effects of adaptation measures on hurricane induced property losses which fema investments have the highest returns abstract this paper evaluates the relative effectiveness of fema expenditures on hurricane induced property losses we find that spending on fema ex ante mitigation and planning projects leads to greater reductions in property losses than spending on ex post adaptation programs specifically a one percent increase in annual spending on ex ante risk reduction and warning projects reduces damages by 0 21 percent while a one percent increase in ex post recovery and clean up spending reduces damages by 0 12 although both types of program spending are effective we find the marginal return from spending on programs that target long term mitigation and risk management to be almost twice that of spending on ex post recovery programs with the predicted increases in the frequency and severity of north atlantic hurricanes in the future our findings suggest there are important potential gains that could be realized from the further diversification of fema spending across project categories

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

real option valuation in renewable energy literature research focus trends and design abstract in light of intensive development of the renewable energy re sector a growing number of academic papers address the complexity of re investment planning and valuation to take account of the high risk profile and irreversibility of re investments researchers have resorted to sophisticated real options ro approaches that enable flexibility to be incorporated into project design in the face of an uncertain environment the variety of different frameworks and models adopted as well as a lack of aggregated analysis of the field suggest a need for a critical review of ro methodology and design in re assessment this study describes the research focus trends and design found in contemporary academic literature devoted to re valuation with a ro approach particular attention is given to ro in project and policy design the results give a comprehensive picture of existing research on the topic thus providing researchers with a solid foundation for further study and indications of directions for future development furthermore the findings provide policymakers and project planners with valuable insights into key aspects of re project and policy design

us food aid and civil conflict we study the effect of us food aid on conflict in recipient countries our analysis exploits time variation in food aid shipments due to changes in us wheat production and cross sectional variation in a country s tendency to receive any us food aid according to our estimates an increase in us food aid increases the incidence and duration of civil conflicts but has no robust effect on interstate conflicts or the onset of civil conflicts we also provide suggestive evidence that the effects are most pronounced in countries with a recent history of civil conflict jel d74 f35 o17 o19 q11 q18 we are unable to determine whether our aid helps or hinders one or more parties to the conflict it is clear that the losses particularly looted assets constitutes a serious barrier to the efficient and effective provision of assistance and can contribute to the war economy this raises a serious challenge for the humanitarian community can humanitarians be accused of fueling or prolonging the conflict in these two countries medecins sans frontieres amsterdam 1

quality frontier of electricity distribution supply security best practices and underground cabling in finland electricity distribution is a prime example of local monopoly in most countries the costs of electricity distribution operators are regulated by the government however the cost regulation may create adverse incentives to compromise the quality of service to avoid this cost regulation is often amended with quality incentives this study applies theory and methods of productivity analysis to model the frontier of service quality a semi nonparametric estimation method is developed which does not assume any particular functional form for the quality frontier but can accommodate stochastic noise and heteroscedasticity the empirical part of our paper examines how underground cabling and location affect the interruption costs as expected higher proportion of underground cabling decreases the level of interruption costs the effects of cabling and location on the variance of performance are also considered especially the location is found to be a significant source of heteroscedasticity in the interruption costs finally the proposed quality frontier benchmark is compared to the current practice of finnish regulation system the proposed quality frontier is found to provide more meaningful and stable basis for setting quality targets than the average practice benchmarks currently in use

conceptualizing energy security abstract energy security 1 is one of the main targets of energy policy however the term has not been clearly defined which makes it hard to measure and difficult to balance against other policy objectives we review the multitude of definitions of energy security they can be characterized according to the sources of risk the scope of the impacts and the severity filters in the form of the speed size sustention spread singularity and sureness of impacts using a stylized case study for three european countries we illustrate how the selection of conceptual boundaries along these dimensions determines the outcome this can be avoided by more clearly separating between security of supply and other policy objectives this leads us to the definition of energy security as the continuity of energy supplies relative to demand

does size matter simulating electricity market coupling between colombia and ecuador since the beginning of the liberalization era the integration of electricity markets has been promoted in many regions arguing that this will bring benefits in terms of security of supply and efficiency however little progress has been made in the last decades in most regions with some successful exceptions such as the nordpool and more research is needed to determine under which circumstances those benefits are achievable we develop a system dynamics model to analyze the potential benefits and risks of market coupling and to improve the understanding of its implications on policy design this model allows us to simulate the long term behavior of two interconnected countries under different interconnection scenarios and different policies regarding capacity payments the analysis is focused on colombia and ecuador which have been trading electricity for more than 10 years and offer an interesting case study given their complementarity in terms of hydropower supply however the results of the simulations show that this complementarity is not necessarily exploited while the relative size of the countries determines the magnitude of the potential benefits of integration the interconnector capacity plays a key role in achieving those benefits additionally both factors significantly affect the outcome of policies such as the implementation of capacity payments we conclude that capacity policies and integration policies need to be coordinated

when is foreign aid policy credible aid dependence and conditionality the author studies foreign aid policy within a principal agent framework he shows that one reason for foreign aid s poor overall record may be a moral hazard problem that shapes the aid recipient s incentive to undertake structural reform the model s basic prediction is a two way relationship disbursements of foreign aid are guided in part by the needs of the poor anticipating this recipients have little incentive to improve the welfare of the poor preliminary econometric work shows that the data support this hypothesis in principle conditionality could partly solve this problem but only if the donor can make a binding commitment to increase disbursements in good relative to bad states without such a commitment technology aid disbursements remain guided by the needs of the poor and recipient countries maintain a low effort to reduce poverty contrary to the conventional wisdom found in the aid literature the author shows that the welfare of all parties might be improved by using tied project aid or by delegating part of the aid budget to an international agency with less aversion to poverty

pension benefit insurance and pension plan portfolio choice pension bene t guarantee policies have been introduced in several countries to protect private pension plan members from the loss of income that would occur if a plan was underfunded when the sponsoring rm terminates a plan most of these public insurance schemes face nancial di culty and consequently policy reforms are being discussed or implemented economic theory suggests that such schemes will face moral hazard and adverse selection problems in this note we test a speci c theoretical predic

economic experiments hypothetical surveys and market data studies of insurance demand against low probability high impact risks a systematic review of designs theoretical insights and determinants of demand this paper provides a systematic review of the literature on 80 experimental hypothetical survey and market data studies of insurance demand against low probability high impact risks the objective of the review is to extract lessons from these studies and to outline an agenda for future research we contrast the results of experimental and survey studies to findings from market data we focus on experimental design methods insurance characteristics as well as results about theories heuristics behavioural biases and explanatory variables lessons for policymakers are drawn which can facilitate disaster preparedness

catastrophic natural disasters and economic growth this paper examines the short and long run average causal impact of catastrophic natural disasters on economic growth by combining information from comparative case studies the counterfactual of the cases studied is assessed by constructing synthetic control groups taking advantage of the fact that the timing of large sudden natural disasters is an exogenous event it is found that only extremely large disasters have a negative effect on output both in the short and long run however this result appears in two events where radical political revolutions followed the natural disasters once these political changes are controlled for even extremely large disasters do not display any significant effect on economic growth it is also found that smaller but still very large natural disasters have no discernible effect on output

renewable energy policy evaluation using real option model the case of taiwan abstract this study presents a policy benefit evaluation model that integrates cost efficiency curve information on renewable power generation technologies into real options analysis roa methods the proposed model evaluates quantitatively the policy value provided by developing renewable energy re in the face of uncertain fossil fuel prices and re policy related factors the economic intuition underlying the policy making process is elucidated while empirical analysis illustrates the option value embedded in the current development policy in taiwan for wind power in addition to revealing the benefits that re development provides when considering real options analytical results indicate that roa is a highly effective means of quantifying how policy planning uncertainty including managerial flexibility influences re development in addition to assessing the policy value of current re development policy this study also compares policy values in terms of internalized external costs and varying feed in tariff fit simulation results demonstrate that the re development policy with internalized co2 emission costs is appropriate policy planning from sustainability point of view furthermore relationship between varying fit and policy values can be shown quantitatively and appropriate fit level could be determined accordingly

valuation of projects for power generation with renewable energy a comparative study based on real regulatory options abstract this comparative study evaluates an investment project on renewable energy based on wind power we have conducted the study in three european union countries denmark finland and portugal we have modelled the main uncertainties that affect this kind of project such as the cost and production of electric power investment costs and consumer price index for each of these countries we have analysed the mechanisms of public support for wind energy we have identified the real options included in the regulatory frameworks of these three countries and assessed how they affect the expanded net present value of the project to this end we have used two different methods of option valuation the monte carlo method and the binomial method we have proved that the obtained results using both methods are quite similar finally we have evaluated the public incentives for wind energy offered in each of these three countries and concluded that in economic terms finland is the country with the strongest support for this kind of energy followed by denmark and in the last place portugal

will domestic consumers take up the renewable heat incentive an analysis of the barriers to heat pump adoption using agent based modelling abstract the uk government introduced the tariff based domestic renewable heat incentive rhi in april 2014 to encourage installation of renewable heat technologies as a key component of its carbon reduction policy of these heat pumps are considered to be the most promising for widespread adoption and as such are the subject of this paper pilot studies prior to introduction of the policy identified non financial barriers to uptake such as the hassle factor involved and initial figures indeed indicate that uptake is lower than expected we analyse these non financial barriers using an agent based model and conclude that there is a tipping point beyond which adoption is likely to fall very sharply we suggest that the rhi s complex and stringent compliance requirements for home inspections and heat emitter performance may well have driven adoption past this point and that further intervention may be required if the key aims of the rhi are to be achieved

the role of the business model in capturing value from innovation evidence from xerox corporation s technology spin off companies this paper explores the role of the business model in capturing value from early stage technology a successful business model creates a heuristic logic that connects technical potential with the realization of economic value the business model unlocks latent value from a technology but its logic constrains the subsequent search for new alternative models for other technologies later on an implicit cognitive dimension overlooked in most discourse on the topic we explore the intellectual roots of the concept offer a working definition and show how the xerox corporation arose by employing an effective business model to commercialize a technology rejected by other leading companies of the day we then show the long shadow that this model cast upon xerox s later management of selected spin off companies from xerox parc xerox evaluated the technical potential of these spin offs through its own business model while those spin offs that became successful did so through evolving business models that came to differ substantially from that of xerox the search and learning for an effective business model in failed ventures by contrast were quite limited

efficiency enhancing signalling in the samaritan s dilemma suppose an altruistic person a is willing to transfer resources to a second person b if b comes upon hard times if b anticipates that a will act in this manner b will save too little from both agents point of view this is the samaritan s dilemma this paper shows that the undersaving result is mitigated if we relax the standard assumption of complete information because if a is uncertain about how big b s need for support is b will have an incentive to signal that he is in great need by saving more than he otherwise would have done

self insurance against natural disasters abstract expenditures on self insurance to mitigate the effects of natural disasters on the value of private assets are examined in a model where individuals are partially insured against financial loss by a public relief program and where private insurance is unavailable the model predicts that optimal private expenditures on self insurance will be excessive or insufficient according to the nature of the technology by which individuals protect their assets the comparative static effects of variations in the level of public compensation individual wealth and attitudes toward risk and the degree of environmental uncertainty on self insurance expenditures and on the magnitude and frequency of public compensation are also characterized and their implications for remedial government policies are examined

exploiting the medium term biomass energy potentials in austria a comparison of costs and macroeconomic impact the transition to an implicitly solar basedenergy system can make use of various specificbiomass energy systems this paper provideseconomic and environmental indicators forevaluating alternative options the paper proceeds in three empirical steps first an expert survey supplies the primarybiomass potentials available for non food usein austria and their respective costs second an inquiry into investment operating andfinancing costs of 30 different biomass energyuse systems allows a standardized comparisonamong them and their relationship to fossilreference technologies third a computablegeneral equilibrium model of the austrianeconomy is employed to quantify the impacts offostering the use of distinct biomass energytechnologies the results allow us to distinguish betweenthose technologies that tend to lead to anincrease in both gdp and employment e g combined heat and power production from sewagesludge biogas to an increase only inemployment while gdp tends to diminish e g district heating based on agricultural pellets or to a decline in both e g co firing basedon wood chips bark or industrial pellets individual technologies could account for up toone third of austrias kyoto obligation whilecombinations of technologies triggered by acombined co2 tax and biomass energysubsidy for example could almost fully lead toaustrian kyoto compliance

technical change and irreversible investment under risk abstract a stochastic dynamic model was constructed to analyze investment decisions of an individual farmer under risk in the presence of irreversibilities embedded technical change and indivisible capital an analytical solution was obtained and its local behavior studied by numerical methods optimal investment is obtained by regulating the difference between the desired and actual capital stocks between two barriers that define an inaction interval while the desired capital drifts between the barriers no action is taken if the desired capital touches the upper barrier the farmer invests pushing the average efficiency of the actual capital stock up this in turn raises the desired capital even higher and contracts the inaction interval if these effects are strong enough the farmer will invest again until the potential gains of the technological package are exhausted if the desired capital falls enough the farmer disinvests pushing down the average productivity and expanding the inaction interval disinvestment continues until it stops either because the inaction interval becomes so wide that it is no longer optimal to disinvest or because the actual capital stock is so small that it is no longer profitable to produce

switching to perennial energy crops under uncertainty and costly reversibility we study a farmer s decision to convert traditional cropland into land for growing dedicated energy crops taking into account sunk conversion costs and uncertainties in crop returns the optimal decision rules differ significantly from the expected net present value rule which ignores uncertainties and from real options models that allow only one way conversion into energy crops these models also predict drastically different patterns of land conversions into and out of energy crops over time using corn soybean rotation and switchgrass as examples we show that the model predictions are sensitive to assumptions about stochastic processes of the returns government policies might have unintended consequences subsidizing conversion costs into switchgrass may not much affect proportions of land in switchgrass in the long run

changes in implicit flood risk premiums empirical evidence from the housing market abstract hedonic valuation models have shown that sales prices can capitalize property risk factors such as flood zone properties facing lower risk sell at a premium all else being equal previous research has indicated that price differentials reflecting risk of flooding become much larger in the wake of a storm we re examine these findings for pitt county north carolina using multiple storm events within a difference in differences framework and we compare flood zone price differentials for a more recent sample of property sales prior to hurricane fran in 1996 we detect no market risk premium for the presence in a flood zone but we find significant price differentials after major flooding events amounting to a 5 7 decrease after hurricane fran and 8 8 decrease after hurricane floyd results from a separate model that examines more recent data covering a period without significant storm related flood impacts indicate a significant risk premium ranging between 6 0 and 20 2 for homes sold in the flood zone but this effect is diminishing over time essentially disappearing about 5 or 6 years after hurricane floyd the lack of a persistent effect suggests that buyers and sellers risk perceptions may change with the prevalence of hazard events and that homebuyers are unaware of flood risks and insurance requirements when bidding on properties

kinship incentives and evolution we analyze how family ties affect incentives with focus on the strategic interaction between two mutually altruistic siblings the siblings exert effort to produce output under uncertainty and they may transfer output to each other with equally altruistic siblings their equilibrium effort is non monotonic in the common degree of altruism and it depends on the harshness of the environment we define a notion of local evolutionary stability of degrees of sibling altruism and show that this degree is lower than the kinship relatedness factor numerical simulations show how family ties vary with the environment and how this a ects economic outcomes

standard incentive regulation hinders the integration of renewable energy generation the connection and distribution of growing decentralized electricity generation from renewable energy sources res e is leading tomassive investment needs besides investing in additional conventional assets e g cables grid operators can also invest in innovative smart solutions like local storage capacities or voltage regulation appliances which may be a more suitable way of integrating res e this paper investigates the influence of incentive regulation on the investment decision of grid operators to integrate res e we describe the technical and regulatory background explain the advantages of smart solutions and present an approach for comparing investment scenarios as an example we calculate the profitability of investments in a case study of the german electricity market we apply data envelopment analysis dea and stochastic frontier analysis sfa to show the influence of the investment alternatives on grid operator efficiency objectives we demonstrate that under current standard incentive regulation the grid operators gain profitability by avoiding investments and if they are forced to invest by not implementing smart solutions the results highlight the need to consider innovation in the regulation design further research should investigate specific instruments that can be used to account for innovation our brief discussion of such instruments provides a starting point

portuguese pellets market analysis of the production and utilization constrains abstract as opposite in portugal the wood pellets market is booming in europe in this work possible reasons for this market behavior are foreseen according to the key indicators of biomass availability costs and legal framework two major constrains are found in the portuguese pellets market the first one is the lack of an internal consumption being the market based on exportations the second one is the shortage of raw material mainly due to the competition with the biomass power plants therefore the combination of the biomass power plants with pellet production plants seems to be the best option for the pellets production in the actual portuguese scenario the main constrains for pellets market has been to convince small scale customers that pellets are a good alternative fuel mainly due to the investment needed and the strong competition with natural gas besides some benefits in the acquisition of new equipment for renewable energy they are insufficient to cover the huge discrepancy of the investment in pellets heating however pellets are already economic interesting for large utilizations in order cover a large amount of households additional public support is needed to cover the supplementary costs of the pellets heating systems

performance of french destinations tourism attraction perspectives in this paper we assess and compare the performance of french tourism destinations using the data envelopment analysis dea two stage procedure where in the first stage the efficiency score are calculated and then followed in the second stage by a bootstrapped truncated regression model in the context of france such analysis takes an additional importance especially as the country is expected to face a decrease in its tourism competitiveness a discussion in terms of d attraction and e attraction is also proposed and policy recommendations are derived

the co evolutionary relationship between energy service companies and the uk energy system implications for a low carbon transition abstract the energy service company esco business model is designed to reward businesses by satisfying consumers energy needs at less cost and with fewer carbon emissions via energy demand management and or sustainable supply measures in contrast the revenue of the incumbent energy utility company euco model is coupled with the sale of units of energy which are predominantly sourced from fossil fuels the latter is currently dominant in the uk this paper addresses two questions first why has the esco model traditionally been confined to niche applications second what role is the esco model likely to play in the transition to a low carbon uk energy system to answer these the paper examines the core characteristics of the esco model relative to the euco model the paper then examines how escos have co evolved with the various dimensions of the energy system i e ecosystems institutions user practices technologies and business models to provide insight into how escos might help to shape the future uk energy system we suggest that institutional and technological changes within the uk energy system could result in a more favourable selection environment for escos consequently enabling the esco model to proliferate at the expense of the euco model

policy design and technological substitution investigating the reach regulation in an agent based model this article proposes an agent based model to study the impact of the european regulation reach on industrial dynamics this new regulation was adopted in 2006 and establishes a new philosophy of how to design environmental protection and health especially through the authorization process and the extended producer responsibility the main contribution of this article is to investigate how different combinations of flexible and stringent mechanisms create the incentives and constraints to shape market selection and innovation the model outcomes stress that 1 stringency is the most determining feature of policy design timing is also decisive but it appears to be of secondary importance 2 technology substitution that brings radical technological change and significant pollution reduction is possible only if regulation is stringent enough but after many sacrifices especially in terms of market concentration and number of failures and 3 soft regulation does not lead to technology transition because of weak incentive and selection effects

opportunities and barriers for international bioenergy trade recently the international trade of various bioenergy commodities has grown rapidly yet this growth is also hampered by some barriers the aim of this paper is to obtain an overview of what market actors currently perceive as major opportunities and barriers for the development of international bioenergy trade the work focuses on three bioenergy commodities bioethanol biodiesel and wood pellets data were collected through an internet based questionnaire the majority of the 141 respondents had an industrial background geographically two thirds were from mainly western europe with other minor contributions from all other continents results show that import tariffs and the implementation of sustainability certification systems are perceived as potentially major barriers for the trade of bioethanol and biodiesel while logistics are seen mainly as an obstacle for wood pellets development of technical standards was deemed more as an opportunity than a barrier for all commodities most important drivers were high fossil fuel prices and climate change mitigation policies concluding to overcome some of the barriers specific actions will be required by market parties and policy makers import tariffs for biofuels could be reduced or abolished linked to multinational trade agreements and harmonization including provisions on technical standards and sustainability requirements

burning wood pellets for us electricity generation a regime switching analysis abstract applying a regime switching model under the theoretic framework of real options we inspect the optimal timing boundaries for coal and coal mixed wood pellets as two alternative fuels for a power plant in georgia united states results indicate that cofiring wood pellets with coal is generally not a commercially viable option however lower level with wood pellets

turning green agent based modeling of the adoption of dynamic electricity tariffs abstract using an agent based modeling approach we study the temporal dynamics of consumer opinions regarding switching to dynamic electricity tariffs and the actual decisions to switch we assume that the decision to switch is based on the unanimity of past opinions the resulting model offers a hypothetical yet plausible explanation of why there is such a big discrepancy between consumer opinions as measured by market surveys and the actual participation in pilot programs and the adoption of dynamic tariffs we argue that due to the high indifference level in today s retail electricity markets customer opinions are very unstable and change frequently the conducted simulation study shows that reducing the indifference level can result in narrowing the intention behavior gap a similar effect can be achieved by decreasing the decision time that a consumer takes to make a decision

difficulty is critical the importance of social factors in modeling diffusion of green products and practices abstract despite the very positive as measured by market surveys attitude towards eco innovations and sustainability in general the actual market penetration of green products and practices generally falls behind the expectations in this paper we argue that considering difficulty of engagement as used in the campbell paradigm is of critical importance when modeling diffusion of eco innovations such a notion of difficulty possesses three desired properties i parsimony it is represented by a single value ii interpretability it can be regarded as an estimator of the otherwise complex notion of behavioral cost and iii applicability it can be easily measured through market surveys in an extensive simulation and analytical study involving empirically measured difficulty and an agent based model spanned on different social network structures we show that innovation adoption may exhibit abrupt changes in market penetration as a result of even small changes in difficulty the latter may be of particular interest to policy makers who have to make strategic decisions when introducing socially but not necessarily individually desired products and practices like dynamic or green electricity tariffs

a coevolutionary framework for analysing a transition to a sustainable low carbon economy this paper proposes a coevolutionary framework for analysing a transition to a sustainable low carbon economy based on the coevolution of ecosystems technologies institutions business strategies and user practices within a multi level micro meso macro perspective this builds on and develops previous coevolutionary analyses of long term technological and industrial change and recent renewed interest within ecological economics on coevolutionary approaches previous work has analysed how the coevolution of technologies and institutions has led to the lock in of current high carbon energy systems and how the coevolution of physical and social technologies and business strategies has brought significant material and welfare benefits to the minority of the world s population living in industrialised countries the coevolutionary framework proposed here may be used to undertake 1 detailed empirical analyses at a micro meso level of the challenges relating to the innovation and adoption of particularly low carbon technologies 2 as a framework for analysing the multi level interaction of social and technological elements within potential transition pathways to a low carbon energy system 3 to assess the implications for economic growth and prosperity of a transition to a low carbon economy and 4 to assist in the development of more formal multi level evolutionary economic models

risk attitudes to low probability climate change risks wtp for flood insurance abstract natural disasters may increase in frequency and severity in the future as a result of climate change which is likely to have an impact on the demand for natural disaster insurance insights about individual risk beliefs and behavioural responses to changing risks are relevant for insurers as it allows them for example to estimate the demand for new insurance products that cover weather related damage this study elicits individual risk beliefs and the demand for low probability high impact flood insurance using the contingent valuation survey method among approximately 1000 homeowners in the dutch river delta this study is of practical relevance since currently flood insurance is not available in the netherlands while insurers have been considering to provide such insurance individuals generally do not behave in accordance with the expected utility model since a significant proportion of homeowners neglect the low probability flood risk the willingness to pay wtp of those individuals who demand flood insurance is on average considerably higher than the expected value of the flood risk they face moreover the wtp for flood insurance is less than proportionally related to increased flood probabilities that were presented to respondents in the questionnaire individuals follow a process of bayesian updating of flood probabilities since perceptions of flood risk are an important determinant of the wtp while objective risks derived from geographical characteristics influence the wtp to a lesser extent communication of baseline probabilities and changes in flood probabilities using risk ladders facilitate the comprehension of risk by respondents and has a considerable effect on the level of the wtp and its sensitivity to probability changes the results indicate that the current ex post public compensation scheme of flood damage lowers demand for private insurance

uncertainty of governmental relief and the crowding out of flood insurance this paper discusses the problem of crowding out of insurance by co existing governmental relief programs the so called charity hazard in the context of different institutional schemes of governmental disaster relief in austria and germany we test empirically whether an assured partial relief scheme as in austria drives a stronger crowding out of private insurance than a scheme promising full relief which is subject to ad hoc political decision making as in germany our general finding is that the institutional design of governmental relief programs significantly affects the demand for private natural hazard insurance

real options approach to renewable energy investments in mongolia developing nations are seeking alternative energy for electricity and one attractive alternative is renewable energy this research analyzes changing investment environment for renewable energy with real options approach and explores its potential in developing economies through studying the case of mongolia under coal price uncertainty to evaluate comparative attractiveness of either continuing to use coal based infrastructures or switching to renewable energy we formulate social revenue functions for the two environments assuming that renewable energy has lower external costs and coal prices follow geometric brownian motion gbm or geometric mean reverting gmr processes we find the optimal trigger coal prices for switching technologies with some scenarios in electricity price and externality characterize when renewable energy investments become attractive in contrast to conventional wisdom we identify some situations where the value of having more decision opportunities does not exceed that of a now or never decision for switching technologies and welfare losses are incurred the optimal trigger prices are higher in gbm than in gmr and our result raises the possible risks for waiting to switch energy to avoid welfare losses in mongolia the government should increase electricity prices or switch to renewable energy earlier especially when people pay more for the removal of externalities

biodiesel investment in a disruptive tax credit policy environment abstract an investigation of poisson type policy jumps on biodiesel investment considers the theory of investment under uncertainty the analysis studies the probability of implementing a policy if it is not in effect and the probability of withdrawal if it is in effect an application models the policy switching regime of the discontinuous u s federal tax credit of 1 00 per gallon on biodiesel results support that time inconsistent government policies do lead to market uncertainty the analysis reveals a pronounced negative impact on decisions to invest in a biodiesel refinery results do indicate a consistent policy switching regime may not be that disruptive to the emerging biodiesel industry it is policy uncertainty that drives the option pricing thresholds and a consistent policy switching does not increase the uncertainty

evaluating the influence of increasing block tariffs in residential gas sector using agent based computational economics abstract designing a desirable increasing block tariff for the residential gas retail market has been a challenging task for regulated utilities especially in china to deal with such problems in this paper we establish an agent based computational economics system to provide a formal evaluation of the direct and indirect influences of several issued increasing block tariffs in the residential gas market moreover a comprehensive demand response behaviour model has been improved in term of price elasticity while still coping with income levels and complex social environment we also compute and compare the outcomes of several increasing block tariffs with the initial flat tariff by running the system on a test case using real world data from a middle scale gas retail market in wuhan the results indicate that there is an appropriate increasing block gas tariff scheme that has greater ability to improve social equity while still ensuring operator revenue and promoting gas conservation in order to offset the limitations of the proposed increasing block tariffs the regulator should adopt some complementary measures such as applying appropriate policies targeting the intended consumers and allowing large families to obtain extra allowance of volume

capital investment strategies under uncertain regulation this article presents a positive model of investment choices by regulated firms that offers rational explanations for electric utilities recent behavior of delaying investment and choosing smaller shorter lead time technologies the model assumes thatfirms capital investments require long lead times during which the value of the completed project is uncertain firms anticipate regulatory profit and loss restrictions but expectations about the value of a completed project change over time firms decisions are modelled using an option pricing approach that incorporates the value of flexibility to delay or abandon projects the article shows why rational firms invest in smaller shorter lead time plants or delay investment when faced with uncertain and asymmetric profit and loss restrictions it also looks at decisions to abandon partially completed plants and shows that the static result that a higher cost allowance on abandoned projects increases the incentive for investment is not generally true in a dynamic model

learning and climate feedbacks optimal climate insurance and fat tails we study the effect of potentially severe climate change on optimal climate change policy accounting for learning and uncertainty in the climate system in particular we test how fat upper tailed uncertainty over the temperature change from a doubling of greenhouse gases the climate sensitivity affects economic growth and emissions policy in addition we examine whether and how fast uncertainties could be diminished through bayesian learning our results indicate that while overall learning is slow the mass of the fat tail diminishes quickly since observations near the mean provide evidence against fat tails we denote as partial learning the case where the planner rejects high values of the climate sensitivity with high confidence even though significant uncertainty remains fat tailed uncertainty without learning reduces current emissions by 38 relative to certainty indicating significant climate insurance or paying to limit emissions today to reduce the risk of very high temperature changes is optimal however learning reduces climate insurance by about 50 the optimal abatement policy is strongly influenced by the current state of knowledge even though greenhouse gas ghg emissions are difficult to reverse non fat tailed uncertainty is largely irrelevant for optimal emissions policy

applying real options analysis to assess cleaner energy development strategies abstract the energy industry accounts for the largest portion of co 2 emissions is facing the issue of compliance with the national clean energy policy the methodology for evaluating the energy mix policy is crucial because of the characteristics of lead time embedded with the power generation facilities investment and the uncertainty of future electricity demand in this paper a modified binomial model based on sequential compound options which may account for the lead time and uncertainty as a whole is established and a numerical example on evaluating the optional strategies and the strategic value of the cleaner energy policy is also presented it is found that the optimal decision at some nodes in the binomial tree is path dependent which is different from the standard sequential compound option model with lead time or time lag concept the proposed modified binomial sequential compound real options model can be generalized and extensively applied to solve the general decision problems that deal with the long lead time of many government policies as well as capital intensive investments

technology adoption decisions under irreversibility and uncertainty an ex ante appproach empirical results demonstrate that uncertainty about costs and requirements for environmental compliance is an important determinant of dairy producers investment behavior ex ante forecasting of how uncertainty and irreversibility are likely to affect producers responsiveness to agricultural technologies has implications for the design of environmental policies simulation modeling methods are described the empirical analysis focuses on texas producers propensity to adopt free stall dairy housing free stall investments offer advantages for both productivity augmentation and pollution abatement yet uncertainty and irreversibility are obstacles to adoption implications of this ex ante paradigm for policy design and implementation are discussed

when the carrot goes bad the effect of solar rebate uncertainty abstract although meant to encourage investment in solar photovoltaic pv systems some incentive policies may themselves become a barrier in instances where policy related uncertainty is present as potential solar adopters delay their investment until uncertainty is resolved this study utilizes a quasi experimental setting to quantify the effect of solar policy uncertainty focusing on the california solar initiative s residential rebate program i exploit the temporary exhaustion of funds within one of the utility territories as an exogenous source of increased uncertainty and estimate that it leads to a 67 drop in rebate applications in an average zip code week there is considerable heterogeneity in this effect depending on household income and pv system size among households that are least likely to invest in pv without a rebate incentive program participation drops by up to 69 this suggests potentially significant loss in program effectiveness due to lower pv adoption and underscores the importance of accounting for uncertainty in policy evaluations

incentive regulation of electricity distribution networks lessons of experience from britain this paper reviews the recent experience of the uk electricity distribution sector under incentive regulation the uk has a significant and transparent history in implementing incentive regulation in the period since 1990 we demonstrate the successes of this period in reducing costs prices and energy losses while maintaining quality of service we also draw out the lessons for other countries in implementing distribution sector reform we conclude by discussing the place of incentive regulation of networks within the wider reform context the required legislative framework the need for appropriate unbundling the importance of quality of service incentives the regulatory information requirements and the role of sector rationalisation

differentiated price loss aversion in destination choice the effect of tourists cultural interest abstract this article looks into the differentiated effects of loss aversion depending on whether individuals show cultural interest when choosing a destination based on the fact that perceived value implies not only sacrifices but also the expectations of a certain level of quality and prospects of satisfaction together with the idea the prospect theory applies to tourism prices the article states the hypothesis that interest in culture when choosing a destination lowers people s loss aversion by incorporating the reference dependent model into a multinomial logit model with random parameters which controls for heterogeneity the empirical application shows that culture interested tourists are less loss averse i e the negative effect of finding a higher than expected price diminishes with cultural interest the expectation of enjoyment of these attributes and the more conscious attitude toward maintenance restoration activities of cultural sites are hypothesized to lead prices to be evaluated differently when selecting a destination

does federal disaster assistance crowd out flood insurance abstract we empirically analyze whether federal disaster aid crowds out household purchase of disaster insurance we combine data on annual household flood insurance purchases for the united states over the period 2000 2011 with data from the two main u s post disaster federal aid programs fema s individual assistance grants and sba s low interest disaster loans estimating both fixed effects and instrumental variable models to account for the endogeneity of disaster assistance grants we find that receiving individual assistance grants decreases the average quantity of insurance purchased the following year by between 4000 and 5000 the reduction we find is roughly 3 of the mean insurance coverage in the sample but larger than the average flood related ia grant in our sample which is 2984 ia is currently limited and larger grants could have different impacts the crowding out is on the intensive margin we find no impact on take up rates likely because there is a requirement that recipients of disaster aid purchase an insurance policy we do not know how take up rates might change without such a requirement low interest post disaster government loans have no systematic effect on insurance purchases

the interaction of public and private insurance medicaid and the long term care insurance market a long tradition in public finance examines how public programs can crowd out private activ ity in areas as diverse as education savings and insurance among others these studies typi cally focus on aggregate economic implications particularly for government expenditures and national savings in this paper we demonstrate that crowd out can also have an important effect on individual welfare specifically we show that the provision of even very incomplete public insurance can crowd out more comprehensive private policies by imposing a large implicit tax on private insurance benefits thus potentially increasing overall risk exposure for individuals we examine the interaction of public and private insurance for one of the largest uninsured financial risks facing the elderly in the united states long term care expenditures at 135 bil lion in 2004 long term care expenditures represented over 8 5 percent of total health expendi tures or all ages or roughly 1 2 percent of gdp moreover real long term care expenditures are projected to triple over the next 35 years due to rising medical costs and the aging of the baby boomers only 10 percent of the elderly however have any private long term care insurance and one third of expenditures are paid for out of pocket congressional budget office cbo 1999 cbo 2004 brown and finkelstein 2007 one potential explanation for the small size of the private market is that the public insurance provided by medicaid may crowd out demand for private insurance medicaid was designed to provide long term care insurance for the poor elderly mark v pauly 1989 1990 has established the qualitative result that as an incomplete but publicly funded source of long term care insur ance medicaid has the potential to reduce substantially demand for private long term care insur ance even among the nonpoor our work builds on this insight by quantifying the magnitude of medicaid s crowd out effect and the incomplete nature of medicaid coverage we also illustrate the mechanism behind medicaid s crowd out effect and are therefore able to assess the likely impact of alternative policies on private insurance demand we develop a utility based model of a 65 year old risk averse individual who chooses an opti mal intertemporal consumption path in the presence of uncertainty about long term care expen ditures we calibrate the model using data on the distribution of long term care expenditure risk common state medicaid rules and the prices and coverage of typical private long term care insurance policies

co firing coal with wood pellets for u s electricity generation a real options analysis abstract in contrast to eu u s electric utilities are not employing the bioenergy technology of co firing wood pellets with coal this difference in employment patterns is explored within a real options analysis roa for possible u s utilization of wood pellets considering fuel price series from 2009 to 2014 for analysis these series are divided into two sub periods based on different market conditions infancy 2009 2011 and substitution 2012 2014 roa indicates co firing wood pellets with coal is feasible considering adoption during wood pellets infancy under low discount rates and long power plant lifespans a portfolio effect of employing multiple fuels underlies this result however co firing is not currently economically feasible the different adoption decisions are likely a consequence of recent cheap and abundant u s natural gas for co fired wood pellets to be feasible government incentives and or a market increase in natural gas prices appear necessary

transforming competitiveness into economic benefits does tourism stimulate economic growth in more competitive destinations abstract this research note investigates the impact of a destination s competitiveness upon tourism s contribution to economic growth using a cross section with 131 countries destination competitiveness is measured with the world economic forum s travel and tourism competitiveness index while tourism s contribution to economic growth is measured with the growth decomposition methodology results reveal that destination competitiveness has no statistically significant impact on tourism s contribution to economic growth tourism policy implications and directions for future research are also discussed

diffusion of renewable energy technologies in south korea on incorporating their competitive interrelationships renewable energy technologies rets have attracted significant public attention for several reasons the most important being that they are clean alternative energy sources that help reduce greenhouse gas emissions to increase the probability that rets will be successful it is essential to reduce the uncertainty about its adoption with accurate long term demand forecasting this study develops a diffusion model that incorporates the effect of competitive interrelationships among renewable sources to forecast the growth pattern of five rets solar photovoltaic wind power and fuel cell in the electric power sector and solar thermal and geothermal energy in the heating sector the 2 step forecasting procedure is based on the bayus 1993 manage sci 39 11 1319 1333 price function and a diffusion model suggested by hahn et al 1994 marketing sci 13 3 224 247 in an empirical analysis the model is applied to the south korean renewable energy market

compulsory savings in the welfare state according to a widely held belief compulsory savings are justified on efficiency grounds because they alleviate the following free rider problem if the welfare state grants a minimum income to older persons some of the young may find it optimal not to provide for retirement the literature argues that compulsory savings can be used in order to overcome this problem however potential free riders consider compulsory savings as if they were payroll taxes this holds even if the pension system is actuarially fair if the resulting labour market distortions are important it is optimal to accept the free rider problem rather than to introduce a compulsory pension system 2000 elsevier science s a all rights reserved

security of supply and regulation of energy networks abstract in recent years the security of energy supplies has re emerged as a central issue in the energy policy arena in the uk and elsewhere this re emergence takes place against a backdrop of increased liberalisation of the energy markets so that security of supply needs to be revisited within this context security of supply is multifaceted but is often discussed in terms of physical availability of energy sources and their commodity price risk this paper discusses the relationship between security of supply and network regulation that is how the energy networks and appropriate regulation of them can contribute to security of supply in liberalised energy sectors energy networks are predominantly natural monopolies and as a result are generally subject to regulatory oversight we discuss a range of issues and trends that pose challenges and opportunities to network regulation and which call for new and innovative measures the paper identifies a number of areas where network regulation can play a significant role in increasing the security of supply of future energy systems

co firing of imported wood pellets an option to efficiently save co2 emissions in europe abstract in this paper the energy and carbon footprints of pellet imports from australia west canada and russia for co firing in europe are investigated their ecologic and economic performances are proven by applying the belgian and uk co firing subsidy systems which require dedicated sustainability evaluations based on the modelling of different subsidy schemes and price scenarios the present paper identifies favourable conditions for the use of biomass co firing in germany and austria which currently do not have dedicated co firing incentives the present paper shows that under present conditions co firing has a narrow financial gap to coal with 3 to 4 cent kwh el and has low co 2 mitigation costs compared to other renewables moreover it is shown that co firing is one of the most cost attractive options to reach the eu 2020 targets for policy makers the support of co firing is found to be very efficient in terms of cost benefit ratio it is proven that the co firing subsidy schemes might direct supply chain decisions towards options with low energy and carbon impacts

scaling up local energy infrastructure an agent based model of the emergence of district heating networks abstract the potential contribution of local energy infrastructure such as heat networks to the transition to a low carbon economy is increasingly recognised in international national and municipal policy creating the policy environment to foster the scaling up of local energy infrastructure is however still challenging despite national policy action and local authority interest the growth of heat networks in uk cities remains slow techno economic energy system models commonly used to inform policy are not designed to address institutional and governance barriers we present an agent based model of heat network development in uk cities in which policy interventions aimed at the institutional and governance barriers faced by diverse actors can be explored three types of project instigators are included municipal commercial and community which have distinct decision heuristics and capabilities and follow a multi stage development process scenarios of policy interventions developed in a companion modelling approach indicate that the effect of interventions differs between actors depending on their capabilities successful interventions account for the specific motivations and capabilities of different actors provide a portfolio of support along the development process and recognise the important strategic role of local authorities in supporting low carbon energy infrastructure

option values to conservation and agricultural price policy application to terrace construction in kenya policy reforms to liberalize agricultural markets in developing countries are likely to influence both the level and the variability of prices while considerable attention has been given to the impact of changes in price level on soil and water conservation there has been relatively little analysis of the role of price variability in conservation decisions we present a model of investment under uncertainty to analyze the effect of both level and variability of prices on the decision to invest in conservation the model is applied to adoption of fanya juu terraces in eastern kenya

technology choice under changing peanut policies the effect of marketing quotas and price supports on technology adoption are examined for peanut production in the southeastern united states using a real options model of investment with output price and yield uncertainty the optimal choice of peanut production technology dryland versus irrigated in the southeast is shown to depend on price supports and how they change the manner in which price supports change will have an effect on the choice and rates of abandonment or adoption of production technologies

is tourism firm competitiveness driven by different internal or external specific factors new empirical evidence from spain abstract the quest to understand the multilevel antecedents of competitiveness has led to a separation of approaches on one side of the question are the environment theories that analyze the structural characteristics of the general and competitive environment on the other side are the resource based view and its extensions that highlight firm specific resources and capabilities as the main basis of firms competitiveness however in recent years the nature of competition and shifting economic conditions have given rise to new theoretical approaches that complement the assumptions underlying both environmental and firm theories specifically this study contributes by examining the regional environment effect the district effect and the strategic group effect through a study of 364 spanish tourism firms this research explores the relative importance of distinct external forces such as the general environment or country effect the regional effect the competitive environment or industry effect the district effect and internal factors such as the firm s tangible resources capabilities and strategy selection the results demonstrate that firms capabilities are more important than environment effects and tangible resources

exploring domestic micro cogeneration in the netherlands an agent based demand model for technology diffusion abstract micro cogeneration micro chp is a new technology at the household level producing electricity in cogeneration with domestic heating thereby increasing the overall efficiency of domestic energy production we have developed a prototypical agent based simulation model for energy technologies competing for demand at the consumer level the model is specifically geared towards the competition between micro chp and incumbent condensing boilers in the model both technologies compete on purchase price and costs of usage to which various types of consumers decide on the installation of either technology simulations with various gas and electricity prices show that micro chp diffusion could be seriously inhibited if demand for natural gas decreases e g due to insulation measures further simulations explore various subsidy schemes a subsidy for purchase is only found to be effective within a limited range of 1400 3250 a subsidy based on decreasing price difference between the competing technologies is much more cost effective than fixed purchase subsidies simulations of a subsidy scheme for usage show that a fast market penetration can be reached but this does not yet take full advantage of technological progress in terms of decreasing co2 emissions selection of the most effective scheme thus depends on the policy criteria assumed

review of dynamic pricing programs in the u s and europe status quo and policy recommendations with the development of demand response dr technologies and increasing electricity demand dynamic pricing has been a popular topic in many countries this paper evaluates various dynamic pricing programs in the u s and europe and provides insights into various aspects including risks and rewards enabling technologies lower income groups and customer types surrounding programs such as time of use tou critical peak pricing cpp peak time rebates ptr and real time pricing rtp we conclude this paper with three main findings 1 policy coordination in promoting dynamic pricing programs between federal and state regulatory agencies is very critical 2 customer engagement is very important and can be enhanced via more accessible educational programs and policy adjustments and 3 more investment in related r d is required to construct a commonly accepted methodology for measuring the effectiveness of dynamic pricing programs

investment under uncertainty and dynamic adjustment in the finnish pork industry bykyosti s pietola and robert j myersmay 1998paper prepared for a selected paper session at the annual meeting of the american agriculturaleconomics association salt lake city utah august 1998 this research was financed jointly byagricultural economics research institute in finland the academy of finland and the finnishcultural foundation we also knowledge the michigan agricultural experiment station for itssupport of this research authors are agricultural economist agricultural economics research institute helsinki finland and associate professor department of agricultural economics michigan state university eastlansing copyright 1998 by kyosti s pietola and robert j myers all rights reserved readers may makeverbatim copies of this document for non commercial purposes by any means provided that thiscopyright notice appears on all such copies

an entry and exit model on the energy saving investment strategy with real options this paper presents an improved decision model based on the real options approach presented by ansar and sparks 2009 for the firms that have not yet established energy saving equipment under the entry and exit strategies furthermore the proposed model takes account of the inevitable equipment renewal and the occurrence of unexpected events under the poisson jump process the timing for terminating an investment when continuous operations of that business are unprofitable is also explored to realize the optimal timing of implementing the energy saving strategy the future discounted benefit b follows the geometric brownian motion with the poisson jump process and the replacement of investment equipment a numerical analysis is followed by a sensitivity study of various parameters to better realize their impacts on the entry and exit thresholds the results show that for the jump case the higher probability of occurrence of unfavorable events will result in a higher entry threshold and lower exit threshold investors are forced to request higher benefit thresholds to cover the higher probability of losses brought by unfavorable events

the political economy of fema disaster payments a central contribution of public choice theory to the analysis of government activity is in viewing the activities of government not as determined by some single altruistic dictator but rather as the result of a process involving individual political agents who react to the incentives they face federal disaster relief administered by the federal emergency management agency fema is one activity that is ripe for political influence due to the process of disaster declaration and relief after a disaster strikes a particular state the governor makes a request to the president for disaster assistance following a governor s request the president then decides whether to declare the state or region a disaster area only after a disaster has been declared by the president can disaster relief be given fema is in charge of determining the level of relief funding for the area but additional appropriations are determined by congress in cases requiring large amounts of funding beyond fema s allocated budget the act which governs the rules of federal disaster declaration and expenditures gives the president the authority to declare a disaster without the approval of congress

towards trust in regulation moving to a public value regulation abstract the uk government has committed itself to reducing its carbon dioxide emissions the challenge of successfully achieving a transition to a sustainable energy system in the context of the uk s largely privately owned energy industry rests on the ability of policy makers to encourage and enable the necessary changes or innovation at all levels of the energy system this paper argues that the uk s current dominant political paradigm or framework the regulatory state paradigm rsp and within it the role of the economic regulator ofgem acts as a fundamental block to this challenge the current economic regulatory system is based on trust in the market or on predicted albeit theoretical known outcomes to expand our regulatory system to one which can deliver a sustainable energy system requires innovation in a certain direction as opposed to any innovation that is the antithesis of the current process of regulation trust is required that ofgem the economic regulator will develop rules and incentives which deliver an agreed sustainable energy goal which is trusted to be the right goal this requires ofgem moving away from ex ante regulation to a type of regulation where all costs benefits and outcomes cannot be known beforehand and where they cannot necessarily be quantifiable this has very provisionally been called public value regulation pvr

altruism the samaritan s dilemma and government transfer policy this paper shows that altruism provides an efficiency rationale for public provision of insurance to the poor the framework is one in which there are rich altruists and risk averse poor who face some possibility of loss the government represents the rich and makes transfers on their behalf with unconditional transfers the poor may forgo insurance and rely on private charity to bail them out in the event of loss this reliance on private charity has adverse efficiency effects these may be avoided if the government makes in kind transfers of insurance copyright 1995 by american economic association

aid catastrophes and the samaritan s dilemma this paper discusses the impact of foreign aid on the recipient country s preparedness against natural disasters the theoretical model shows that foreign aid can have two opposing eects on a country s level of mitigating activities in order to test the theoretical propositions we analyse the eect of foreign aid dependence on ex ante riskmanagement activity proxied by the death toll from major storms floods and earthquakes occurring worldwide between 1980 and 2002 we find evidence that the crowding out eect of foreign aid outweighs the preventive eect in the case of storms while there is mixed evidence in the case of floods and earthquakes

heat or power how to increase the use of energy wood at the lowest cost abstract we compute the optimal subsidy level for fuelwood consumption that makes it possible to achieve the french biomass energy consumption target for this purpose we model the competition and trade offs between the consumption of fuelwood for heat fw h and the consumption of fuelwood for electricity fw e to do so we couple a forest sector model with an electricity simulation model and we test different scenarios combining fw h and fw e that account for contrasting potential increases in the carbon price and the potential reduction in the number of nuclear plants we assess the implications of these scenarios on 1 the budgetary costs for the government 2 industrial wood producers profits 3 cost savings in the power sector for the different scenarios tested and 4 the carbon balance we show that the scenario with the highest carbon price and the lowest number of nuclear plants is the least expensive from a budgetary perspective indeed when associated with a high carbon price co firing may increase fw e demand with a lower subsidy level which makes it possible to reduce the cost of reaching the target however in this case fw e crowds out part of fw h which may cause political and economic issues from a carbon balance perspective an fw h only scenario performs better than any other scenario that combines fw h and fw e due to the relatively low emissions factors of alternative technologies for electricity generation and in particular nuclear energy

liberalisation and the security of gas supply in the uk abstract this paper contests the view held by the current uk government and its industry regulator ofgem that liberalisation is good for security of supply focusing on the downstream aspects of the security of uk gas supply on system security it considers the impact of the different aspects of liberalisation of legal governance supply competition de integration market simulation regulation and the interaction of liberalised gas and electricity markets categorising these impacts in terms of security threats and threats to security response it finds that individually and as a complex collectivity they have increased the risks of supply failure either potential or already realised in a variety of ways from creating increased uncertainty and failing to signal adequate or appropriate investment to legal ambiguity which divorces responsibility from liability and renders legal liability indeterminate ex ante moreover one of the uk government s responses to these increased dangers which it does appear to perceive is revealed as itself paralysed by the liberalisation paradigm the government can only intervene pre emptively with information in attempt to persuade the market to behave as it thinks it should meanwhile however the government has also had to recognise its default responsibility for security of supply and make preparations to intervene in an emergency situation liberalisation can only be challenged when it is already too late

a regional energy paradox the case of central norway abstract central norway is expected to have a gap of 8 twh in 2010 because of heavy investments in energy intensive industries the region has two landing sites for natural gas and a considerable potential for wind power to cover the gap small scale hydropower and upgrading of existing hydropower plants also constitute a regional energy potential paradoxically the most realistic investment prospect seems to be extensive investments in new transmission lines to cover the supply deficit the aim of this paper is to present a problem of regional supply security and public intervention to illustrate and discuss the challenges of arriving at long term capacity adequacy in deregulated electricity markets

the arguments for and against ownership unbundling of energy transmission networks abstract the question this paper addresses is what is the evidence for the superiority of the ownership unbundled transmission models i e uk or nord pool hybrid over other models we assess the theoretical costs and benefits of ownership unbundling and judge these to be generally positive though these may be potentially offset by the actual reorganisation costs of the ownership unbundling process next we assess the empirical evidence this is in two forms econometric evidence from samples of countries and case studies of reforms in particular jurisdictions the econometric evidence is weak due to problems with simultaneity of reform steps and a lack of studies but the case study evidence is compelling we conclude with a discussion of the issues faced by countries considering implementing ownership unbundling we conclude that evidence seems to be that ownership unbundling of transmission is a key part of energy market reform in the most successful reform jurisdictions

estimating average and local average treatment effects of education when compulsory schooling laws really matter the change to the minimum school leaving age in the united kingdom from 14 to 15 had a powerful and immediate effect that redirected almost half the population of 14 year olds in the mid twentieth century to stay in school for one more year the magnitude of this impact provides a rare opportunity to a estimate local average treatment effects late of high school that come close to population average treatment effects ate and b estimate returns to education using a regression discontinuity design instead of previous estimates that rely on difference in differences methodology or relatively weak instruments comparing late estimates for the united states and canada where very few students were affected by compulsory school laws to the united kingdom estimates provides a test as to whether instrumental variables iv returns to schooling often exceed ordinary least squares ols because gains are high only for small and peculiar groups among the more general population i find instead that the benefits from compulsory schooling are very large whether these laws have an impact on a majority or minority of those exposed