should a carbon tax be differentiated across sectors abstract if some but not all countries are cooperating to reduce co2 emissions one could make the following argument a high carbon tax for carbon intensive tradeable sectors in the cooperating countries will reduce the production of goods from these sectors and therefore co2 emissions in the cooperating countries however this will to a large extent be counteracted by increased production of such goods in the countries that have no climate policy and since it is only total co2 emissions from all countries that are relevant for the climate there is no point in a policy that simply relocates co2 emissions from the cooperating countries to the countries that have no climate policy according to this line of reasoning carbon intensive tradeable sectors should thus face a lower carbon tax than other sectors of the economy this paper shows that a carbon tax should not be differentiated across sectors in the economy provided one can use import and export tariffs on all traded goods it is also shown that such a differentiation of carbon taxes is optimal for the cooperating countries if they are prevented from using tariffs on the traded goods however informational or political factors constraining the use of tariffs are likely also to constrain the possibility of differentiating carbon taxes between sectors

liberalisation and r d in network industries the case of the electricity industry abstract electricity sector liberalisation has coincided with a significant decline in r d spending this paper reviews the industrial organisation literature on r d and innovation to explore the likely causes of the decline in r d spending in the electricity sector meanwhile r d productivity and innovative outputs in utilities and equipment suppliers appear to have improved however a lasting decline in r d expenditure can have a negative long term effect on technological progress and innovation in the sector we conclude that the decline in r d could have been predicted from the literature we also discuss the need to reorient the post liberalisation technology policy

industrial and residential electricity demand dynamics in japan how did price and income elasticities evolve from 1989 to 2014 abstract this study estimates the price and income elasticities of industrial and residential electricity demand in japan with the annual data from 1989 to 2014 a time varying parameter tvp model with the kalman filter is applied to monitor the evolution of consumer behaviors in the post bubble period given the exogenous shock financial crisis in 2008 and the structural breaks electricity deregulation and fukushima daiichi crisis the tvp model can provide a robust estimation of elasticities and can detect the outliers and the structural breaks the results suggest that both industrial and residential consumers become less sensitive to price after the electricity deregulation and the financial crisis and more sensitive to price after the fukushima daiichi crisis especially the industrial sector is less sensitive to price after the retail deregulation by contrast the income elasticities of industrial and residential sector consumers are stable during the examined period results also indicate that a negative relationship exists between the price elasticity of electricity demand and the price level of electricity after the electric sector deregulation some insights on the further electric sector reform and the environmental taxation in japan are also provided

why and how to subsidise energy r d lessons from the collapse and recovery of electricity innovation in the uk the uk electricity sector liberalisation was a pioneer in the worldwide reform trend and its reform model and outcomes have been the subject of many studies however lesser known are the effects of privatisation market based reforms and incentive regulation of networks on research and development as well as patenting activities in the sector this paper updates our previous studies of this subject and discusses the recent developments in the innovative activities in the uk electricity sector we find that in recent years the initial absence of support policies and the subsequent decline in innovation efforts in the aftermath of the reform has resulted in efforts towards forming an energy technology and innovation policy although we already observe some positive outcomes from these efforts we discuss whether the balance of the innovation efforts are calibrated appropriately and whether the institutional framework can be further improved to promote long term progress

energy research and r d indicators an lmdi decomposition analysis for the iea big 5 in energy research abstract the literature has always shown that there are two important factors in the improvement of a country s research output gross domestic product gdp and r d expenditures taking the discussion a step further and in an effort to provide policy recommendations on what is needed to boost research capacity this paper aims at decomposing the change in energy research papers of five countries australia canada germany uk and us into four factors gdp r d intensity ratio of total r d to gdp energy r d rate of return or productivity number of energy related papers per unit of energy r d expenditure and energy r d priority share of energy r d to total r d expenditure the findings show a general trend in the sign of the four effects on research for all five countries energy r d productivity energy r d priority and gdp are mostly found to be positive contributors while the r d intensity a negative one this pattern has exceptions that are more prominent during periods where economic growth is constrained for example during 2008 09 the results have policy implications not only for these five countries but also for developing countries low gdp that aim at contributing more to the energy related research output globally

innovation performance of the us american and european electricity supply industry abstract using a production function approach based on cobb douglas this analysis relates r d efforts of 32 electric utilities on both sides of the atlantic to their performance in terms of labour productivity we find that higher r d levels generally have a positive impact on revenues however only in the sub sample of 16 electricity suppliers in europe this effect is significant knowledge spill over effects can be estimated for the us american sub sample since us utilities have bundled their r d efforts in a centralized research institution and have to report that data our analysis reveals though that collaborative research efforts do not lead to positive spill overs at the assumption of a time delay of one year

renewable energy support mechanisms in the gulf cooperation council states analyzing the feasibility of feed in tariffs and auction mechanisms renewable energy will be a crucial ingredient in the transition to a more sustainable future the renewable energy sector requires a variety of financial support mechanisms in order to further consolidate and expand currently the most prominent renewable energy support mechanisms are feed in tariffs and renewable energy auctions although these mechanisms have been used and analyzed extensively in western countries and more recently economies in transition they have rarely been examined in the arab gulf region yet particularly the gulf cooperation council gcc states have undertaken important steps towards renewable energy adoption which could be greatly facilitated with the use of financial support mechanisms this paper analyzes the feasibility of feed in tariffs and renewable energy auctions adoption in gcc based on an extensive meta analysis of the literature on these two mechanisms in both developed and developing countries the paper identifies a set of conditions necessary for success and evaluates the presence of favorable these conditions in the gcc context our findings reveal that while conditions that would ensure political feasibility are largely absent for both types of mechanisms auctions could be a more successful strategy at the moment

commercial energy subsidies in developing countries opportunity for reform abstract energy subsidies are still pervasive in many developing countries oil exporters heavily subsidize all domestic oil consumption while several importers subsidize particular petroleum products estimates of foregone revenues in the oil exporting countries approximate one third of all oil export revenues finally subsidies for electricity natural gas and coal are even more pervasive in virtually all of the countries studies the prices of these fuels do not reflect marginal costs

r d and internal finance a panel study of small firms in high tech industries since joseph schumpeter economists have argued that internal finance should be an important determinant of r d expenditures yet almost without exception previous empirical studies have not found evidence of such a relation using newly available data the authors investigate this puzzle with a panel of 179 small firms in high tech industries under each estimation strategy they employ the authors find an economically large and statistically significant relationship between r d investment and internal finance their results are consistent with the view that because of capital market imperfections the flow of internal finance is the principal determinant of the rate at which small high tech firms acquire technology through r d copyright 1994 by mit press

is the growth of small firms constrained by internal finance this paper examines the long standing theory that the growth of small firms is often constrained by the quantity of internal finance under plausible assumptions when financing constraints are binding an additional dollar of internal finance should generate slightly more than an additional dollar of growth in assets this quantitative prediction should not hold for the relatively small number of firms which access external equity we test these predictions with a panel of more than 1 600 small firms and find that the growth of most firms is constrained by internal finance our results have implications for several different research literatures including models of firm growth

r d investment of electricity generating firms following industry restructuring abstract since electricity market restructuring questions over adequate levels of r d investments persisted using an unbalanced panel data of 70 electricity generating firms across 15 organisations of economic co operation and development countries from 1990 to 2008 this paper empirically examines the impacts of entry liberalization allowing third party access establishing a wholesale market and deregulating a retail market vertical unbundling privatization and firm size on r d investments entry liberalization is associated with a decline in r d investment establishing a wholesale market exhibits the greatest negative effects on r d investment regulated tpa and retail market deregulation also decrease r d the effect of privatization is not independently salient but interacts with a wholesale pool to lower r d investments large firms spend more on r d investment than small firms results indicate that the restructuring of the electricity industry reduces r d investment which may be detrimental to the reliability and the efficiency of the electricity system as well as to the creation and maintenance of the innovation capabilities necessary to address demand and environmental concerns

unintended consequences energy r d in a deregulated energy market abstract many advanced industrialized nations are substantially reducing their national public and private investments in energy research and development r d driven in part by changes occurring as a result of the deregulation of these nations energy sectors in particular funding for strategic energy r d aimed at developing future energy supply options eg fusion fission clean fossil energy renewable energy has been decreased substantially in both the public and private sectors in many of these nations these trends are now starting to be seen in the united states as it moves towards the deregulation of the nation s utilities the magnitude of the reductions in support for energy r d in the public and private sectors and the shift towards decidedly shorter term r d has profound implications for nations approaching deregulation though utility customers may be short term winners from the deregulation of utilities by paying less for energy a national failure to invest in energy r d is very likely to have long term negative impacts on national energy sectors the economies and environmental wellbeing

a carbon tax to reduce co2 emissions in europe abstract this paper examines the effects of introducing a tax on carbon dioxide emissions produced by combustion processes in oecd european countries a sectoral model of energy consumption is constructed to examine energy saving and inter fuel substitution effects induced by the introduction of various carbon taxes the simulation period is 1989 1994 our results provide a mild support to the environmental role of a carbon tax energy saving or inter fuel substitution processes that result from the introduction of environmental taxation stabilize emissions at the 1988 level only in the electricity generation sector and only if high tax rates are assumed 100 ton c by contrast total emissions all sectors and all fuels keep growing and the implementation of a tax of 100 ton c can only reduce the emission growth rate these results would recommend the introduction of several coordinated environmental instruments the last part of the paper compares results concerning oecd europe with those obtained when examining a single country italy the comparison does not seem to be in favour of a uniform carbon tax it rather indicates that environmental policy should be designed taking into account the specific economic situation and technological choices of each single country country specific coordinated environmental policies are to be recommended where international coordination ought to concern environmental targets rather than instruments

can carbon tax eat opec s rents abstract we consider the optimal emission tax for a stock pollutant when the pollutant flow is also regulated by a resource exporting cartel we consolidate clarify and generalize a set of previous results to obtain clear isolation of the pigouvian and trade policy components of the tax because of the trade policy component the tax can shift more rents from the cartel than the pollution causes damage related costs this leads to the possibility that the pollution problem accompanied by the coordination of taxation can bring about net benefits at the expense of the cartel

the benefits of privatization evidence from mexico critics of privatization often argue that its benefits come at a high cost to society the authors test the validity of this criticism for mexico s privatization program one of the world s largest case by case programs assessing the performance of newly privatized firms in such areas as profitability and efficiency they find that these firms quickly close the gap with their peers in the private sector their findings suggest that the firms profit gains come from productivity gains 52 percent layoffs 33 percent and higher prices 15 percent

the differential impact of uncertainty on investment in small and large businesses we study the impact of profit uncertainty on investment and whether or not this response is different in industries that are dominated by small firms versus those that are dominated by relatively larger firms our key findings are that the sign of the investment uncertainty relationship is negative and that the quantitative negative impact is substantially greater in industries dominated by small firms these results are robust to accounting for potential endogeneity of the uncertainty measure alternate procedures for measuring uncertainty and alternate ways of segmenting industries into small and large firm groups

the costs of mitigating carbon emissions a review of methods and findings from european studies abstract conventional wisdom has it that top down studies of mitigation costs are too pessimistic while bottom up studies are too optimistic in examining mitigation cost studies for western europe this paper finds this interpretation to be flawed the paper expands the analytical framework for interpreting mitigation cost studies evaluates the treatment of no regrets options and other input assumptions in the various studies and includes findings from recent integrated top down bottom up modeling assessments not covered in the ipcc report based on these new elements it is found that mitigation costs tend to be overestimated not only in top down studies but also in bottom up studies given this pervasive bias toward pessimism the body of existing mitigation cost assessments for western europe can be read as follows over the next three to four decades a combination of tax shifts market transformation instruments and policies to reform subsidies and internalize non climatic externalities could cut carbon emissions in western europe by 40 50 relative to the base year at no loss or at a gain in gdp averaged over the medium term and including a phase in period an economically optimal rate of implementing western europe s no regrets potentials is found to be in the neighborhood of 2 per year relative to base year levels

credible carbon policy the paper sets out the credibility problem in carbon policy provides a number of examples of non credibility in recent energy policy and identifies the costs of failing to address it the time inconsistency of carbon policy arising because of multiple objectives the irreversibility of energy investments and the scope for ex post reneging on ex ante commitments to set policy instruments such as carbon taxes or emission permits at appropriate levels is set in a conceptual framework analogies with monetary policy are drawn and a solution to the time inconsistency problem is proposed through the establishment of an energy carbon agency

barriers and opportunities of using the clean development mechanism to advance renewable energy development in china studying the barriers and opportunities of using clean development mechanism cdm to advance renewable energy deployment in china has a practical significance to achieve its ambitious renewable energy plan which affects the global efforts to curb carbon emission this paper analyses the role of cdm in promoting renewable energy development in china by reviewing the cdm activities especially renewable energy cdm activities in china there are three barriers to utilizing cdm for renewable energy deployment namely the dilemma of additionality lower proportional certified emission reduction credit revenues on the investment and the lack of incentive for technology transfer whereas the opportunities of using cdm in promoting renewable energy development include the international carbon market redirection to renewable energy chinese renewable energy boom driven by a series of effective energy policies and additional finance from cdm supporting chinese renewable energy development based on the study on the barriers and opportunities the article considers that cdm is an indispensable incentive and a viable choice to promote renewable energy deployment in china crown copyright c 2010 published by elsevier ltd all rights reserved

agency costs and innovation abstract stylized facts indicate that small firms are responsible for a disproportionate share of innovative research there are many possible explanations for this fact the paper seeks to understand this phenomenon as the outcome of an optimal assignment of tasks across individuals and organizations it is shown that incentive costs associated with a given task depend on the total portfolio of tasks that an individual or an organization undertakes mixing hard to measure activities innovation with easy to measure activities routine is particularly costly since it will either lead to misallocation of attention across tasks or to misallocation of risk larger firms are at a comparative disadvantage in conducting highly innovative research because of the costs associated with managing a heterogeneous set of tasks it is further argued that optimal organizational responses to coordination and control of routine tasks will lead to bureaucratization within the firm and to financial constraints imposed by capital markets both of which are hostile to innovation

managerial incentives and capital management the paper shows how career concerns rather than effort aversion can induce a natural incongruity in risk preferences between managers and superiors a model based on learning about managerial talent is developed to study second best contractual remedies we show that the optimal wage contract is an option of the value of the manager s human capital for insurance reasons and that consequently rationing of capital is often required to counterbalance the manager s resulting incentive to overinvest rationing is strictly superior to price decentralization offering one reason for the prevalence of centralized capital budgeting procedures

the unequal benefits of fuel subsidies a review of evidence for developing countries summary this paper reviews evidence on the impact of fuel subsidy reform on household welfare in developing countries on average the burden of subsidy reform is substantial and is approximately neutrally distributed across income groups a 0 25 decrease in the per liter subsidy results in a 5 decrease in income for all groups more than half of this impact arises from the indirect impact on prices of other goods and services consumed by households fuel subsidies are a costly approach to protecting the poor due to substantial benefit leakage to higher income groups in absolute terms the top income quintile captures six times more in subsidies than the bottom

a review of the value of aggregators in electricity systems abstract distributed energy resources ders are being adopted throughout the world aggregators are lauded by some as critical in enabling ders to provide these valuable electricity services at scale in this light regulatory and policy bodies are discussing the role of aggregators and even the need to support their market entry in order to shed light on the economically efficient regulation of aggregators in electricity systems this paper systematically assesses the economic fundamentals of aggregators we perform a critical review of the value of aggregators defining the factors that determine their role in power systems under different technological and regulatory scenarios we identify three categories of value that aggregators may create fundamental transitory and opportunistic fundamental value is intrinsic to aggregation and is independent of the market or regulatory context transitory value can be significant in the near term but may be diminished by technological or regulatory advances finally opportunistic value emerges as a result of regulatory or market design flaws and may endanger the economic efficiency of the power system this paper provides a template for regulators to encourage the efficient development of aggregators while eliminating the potential for economic inefficiencies through opportunistic aggregation

challenges for r d and innovation in energy abstract in recent years there has been a growing interest in the role of r d and innovation in energy efficiency and dealing with climate change to improve our knowledge in these matters a workshop was organized in barcelona spain in january 2014 this introduction to the special issue first presents some insights from the literature on challenges for r d and innovation in energy the second section summarises the articles from this workshop that make up this special issue and that provide new insights into innovation in energy all the articles include energy policy recommendations based on the empirical analyses carried out

public acceptability of personal carbon trading and carbon tax abstract climate change is one of the greatest challenges confronting the international community requiring action to achieve deep cuts in carbon emissions the implementation of potentially uncomfortable but necessary policy measures is though critically dependent upon public acceptability this paper reports a novel application of stated preference techniques to explore the influence of key design attributes on the acceptability of a personal carbon trading scheme in isolation and when compared to a carbon tax illustrative forecasts from the models developed indicate the importance of design attributes especially the basis of the initial permit allocation for personal carbon trading and the use to which revenues are put for carbon tax results indicate that the best scheme designs could be acceptable to a majority of respondents

after kyoto alternative mechanisms to control global warming after more than a decade of negotiations and planning under the framework convention on climate change fccc the first binding international agreement to control the emissions of greenhouse gases has come into effect in the kyoto protocol the first budget period of 2008 2012 is at hand moreover the scientific evidence on greenhouse warming strengthens steadily as observational evidence of warming accumulates the institutional framework of the protocol has taken hold solidly in the european union s emissions trading scheme ets which covers almost half of europe s carbon dioxide emissions notwithstanding this apparent success the kyoto protocol is widely seen as somewhere between troubled and terminal early troubles came with the failure to include the major developing countries along with lack of an agreedupon mechanism to include new countries and extend the agreement to new periods the major blow came when the united states withdrew from the treaty in 2001 by 2002 the protocol covered only 30 percent of global emissions while the hard enforcement mechanism in the ets accounts for about 8 percent of global emissions even if the current protocol is extended models indicate that it will have little impact on global temperature change unless there is a dramatic breakthrough or a new design the protocol threatens to be seen as a monument to institutional overreach nations are now beginning to consider the structure of climate change policies for the period after 2008 to 2012 some countries states cities companies and even universities are adopting their own climate change policies are there in fact alternatives to the scheme of tradable emissions permits embodied in the protocol the fact is that alternative approaches have not had a serious hearing among natural scientists or among policymakers what are some alternatives for global public goods there are three potential approaches command and control regulation quantity oriented market approaches and taxor price based regimes of these only the tradable quantity and the price like regimes have any hope of being reasonably efficient under a tradable quantity approach an agreement proceeds by setting limits on emissions by different countries the limits are partially or wholly transferable among countries this is the approach taken under the kyoto protocol this approach has very limited international experience under existing protocols such as the cfc chlorofluorocarbon mechanisms and somewhat broader experience under national trading regimes such as the u s sulfur dioxide regime a radically different approach is to use harmonized prices fees or taxes as a method of coordinating policies among countries this approach has no international experience in the environmental area although it has modest experience nationally in such areas as the u s tax on ozone depleting chemicals on the other hand the use of harmonized price type measures has extensive international experience in fiscal and trade policies such as with the harmonization of taxes in the european union and harmonized tariffs in international trade these thoughts on the structure of international agreements to control global warming should not be regarded as negotiating strategies

deregulation market competition and innovation of utilities evidence from japanese electric sector this paper explores the determinants of electric utility innovation and examines the impact of electric sector deregulation and market competition on it using a balanced panel database of nine japanese utilities from 1978 to 2014 both input r d expenditure and output patent application number and patent quality aspects of innovations are examined the empirical results indicate that deregulation and market competition decrease the former but increase the latter these results are followed by a discussion on why this scenario occurs the results also suggest that after deregulation utilities focus more on short term business oriented r d projects hence we call for governments to support long term public oriented and environmental research in the electric sector

tax policy issues in designing a carbon tax a carbon tax is a promising tool for discour aging the greenhouse gas emissions that cause climate change in principle a well designed tax could reduce the risk of climate change minimize the cost of emissions reductions encourage innovation in low carbon technologies and raise new public revenue but designing a real world carbon tax poses significant challenges we analyze those challenges from a public finance perspective emphasizing three tax policy design issues setting the tax rate collecting the tax and using the resulting revenue the benefits of a carbon tax will depend on how policymakers address those issues

trade and carbon taxes we study various scenarios for taxing emissions of carbon dioxide c02 the question is how carbon tax policies will perform given interna tional trade if countries adopt different tax rates we investigate this question quantitatively using cim earth a newly developed open source computable general equilibrium cge model since climate change is a function of global c02 emissions an efficient strategy for control ling emissions would be to impose the same price wherever they occur such an approach presents a free riding problem however because nations have an incentive not to comply while gaining the ben efits of reduced emissions elsewhere moreover because of distributive concerns and claims about

when can carbon abatement policies increase welfare the fundamental role of distorted factor markets abstract this paper employs analytical and numerical models to assess the welfare effects of a revenue neutral carbon tax and nonauctioned carbon emissions permits taking into account preexisting tax distortions in factor markets the presence of preexisting taxes significantly raises the general equilibrium costs of both policies this cost increase is much greater under emissions permits since this policy does not generate revenues to reduce distortionary taxes under our central estimates emissions permits cannot increase welfare unless environmental damages exceed about 18 per ton of carbon in contrast an appropriately scaled carbon tax is welfare improving so long as environmental damages are positive

rethinking and reshaping the climate policy literature review and proposed guidelines abstract addressing climate change represents a governing the climate commons on a global scale the tragedy of the commons might better be described as the failure of governing the commons hardin s solutions were centralized government and private property which have long been criticized as oversimplified however governing the unprecedented climate commons there is only a global federalism of climate policy the kyoto protocol the kyoto cannot keep atmospheric co2 level below 450 ppm rising 2 c some key evidences of the kyoto failures are identified the kyoto failures do not indicate that the kyoto is a wrong tool of centralized government instead the kyoto failures are derived from the fact that the only centralized government cannot effectively govern the commons which have been proven by the efforts of governing the commons last four decades here we propose a wide diversity of governance systems for climate common to addressing global warming the multi level and multi scale governing system includes but is not limited to i starting at home ii emphasizing the local approach iii efforts of global level focusing these top emitters iv improved information sharing v privatizing the property of climate to avoid free riders vi combination mitigation with adaptive vii improved ecology services to expand carbon sinks we argue that the kyoto failures indicate again that reliance on a single solution may result in more of a problem than a solution in governing the common therefore continuing to wait for another global federalism of climate policy may lead to missing the chance to make significant mitigations and adaptations in time to battling the climate change post 2012 multi level and multi scale approaches could make a difference in collective action for governing the climate commons to meet climate challenge

preemptive patenting and the persistence of monopoly this article takes a different tack and inquires whether institutions such as the patent system create opportunities for firms with monopoly power to maintain their monopoly power the results apply to other situations such as brand identification spatial location and capacity expansion which share the characteristic that early or preemptive actions may lower the returns to potential competitors

cheaper oil a turning point in paris climate talk abstract the 2015 paris climate conference is designed to achieve a legally binding agreement on climate change for the first time in over 20 years however the participants face a much tougher task in striking a new deal after the disappointing preparatory climate change talks in lima however falling oil prices have created more room to maneuver for the forthcoming global climate talks than previously thought average global oil prices have plunged from usd 110 per barrel in june 2014 to approximately usd 60 per barrel in may 2015 with the sharply falling oil prices and the downward pressure on gas and coal prices both the removal of fossil fuel subsidies ffs and the implementation of a carbon tax could be conducted without raising energy costs a growing body of research suggests that removing ffs and implementing a carbon tax could significantly reduce carbon emissions thus the approximately 50 drop in oil prices has provided a window of opportunity to reduce carbon emissions by removing ffs and internalizing climatic externalities worldwide as this window will not last forever both these measures should be implemented quickly and be considered central to the paris climate change conference compared with the lack of success in the previous two decades of climate diplomacy these two measures constitute technical and economic factors that will make a difference in the 2015 un climate change conference

takeover threats and managerial myopia this paper examines the familiar argument that takeover pressure can be damaging because it leads managers to sacrifice long term interests in order to boost current profits if stockholders are imperfectly informed temporarily low earnings may cause the stock to become undervalued increasing the likelihood of a takeover at an unfavorable price hence the managerial concern with current bottom line the magnitude of the problem depends on a variety of factors including the attitudes and beliefs of shareholders the extent to which corporate raiders have inside information and the degree to which managers are concerned with retaining control of their firms

impact of cheaper oil on economic system and climate change a swot analysis abstract the drop in crude oil price by nearly half since june 2014 has created new opportunities as well as challenges this study employs the swot method to analyze the impact of cheaper oil on the global economic system and carbon emissions exploring the climatic opportunities and identifying the challenges of lower oil prices in addition it contends that falling oil prices boost economic growth but produce more carbon pollutants thereby accelerating global warming however cheaper oil has provided a window of opportunity to remove fossil fuel subsidies a major development that years of climate shaming has failed to achieve furthermore we argue that social factors are a critical often overlooked threat for the removal of fossil fuel subsidies with declining oil prices exerting downward pressure on gas and coal the removal of subsidies and carbon tax can be introduced without raising the energy prices four policy recommendations are proposed for the removal of fossil fuel subsidies to limit global warming as well as to meet the challenge and opportunity of cheaper oil removal of fossil fuel subsidies should be quickly implemented because this window of opportunity of cheaper oil will not last forever

does firm size matter evidence on the impact of liquidity constraints on firm investment behavior in germany abstract this paper examines the link between liquidity constraints and investment behavior for german firms of different sizes from 1970 to 1986 results indicate that medium sized firms appear to be more liquidity constrained in their investment behavior than either the smallest or largest firms in the study suggesting that the unique german infrastructure designed to assist the small firm has indeed succeeded in alleviating to some degree such liquidity constraints findings also support the hypothesis that the emerging competition and internationalism which characterized the german financial markets in the 1980s have been improving access to capital for some groups of firms

review of proposals for practical power sector restructuring and reforms in a dynamic electricity supply industry abstract south africa s electricity supply industry esi remains a vertically integrated monopoly despite global trends towards restructuring the monopolistic nature of the esi could hinder the development of distributed power systems as penetration of renewable electricity increases the research aims to rationalise south africa s esi evolution propose practical power sector restructuring in the short to medium term and to determine their potential impact the research methodology included a single case study instrument with embedded sub units of analysis primary research data was gathered using semi structured interviews with industry experts in addition to which secondary data from government documents and archival records were used for triangulation research results conclude that south africa s esi grew due to techno economic industrialisation factors while apartheid era policies influenced the esi in only some specific respects the vertically integrated status quo was sustained in the post transformation period due to government s focus on social imperatives lack of regulatory policy certainty and conflicts in political ideology south africa did not experience the pre conditions that triggered global power sector reforms in the late 20 th century but these pre conditions are now becoming evident privatisation of eskom generation and introduction of wholesale and retail competition are not practical in the short to medium term proving the infeasibility of the standard model of reform locally the introduction of an independent system and market operator ismo using a single buyer model is seen as the most favourable and practical option with the ismo owning transmission infrastructure the research suggests that esi changes will increase system efficiencies economic performance and private sector involvement but will not reduce electricity tariffs the scenarios challenges and proposals identified in this research are also applicable to other countries in africa and other developing regions of the world that have similar social and political backgrounds ensuring sustainable supply of electricity

direct democracy and local public finances under cooperative federalism this paper exploits the introduction of the right of referenda at the local level in the german state of bavaria in 1995 to study the fiscal effects of direct democracy in the first part of the paper we establish the relationship between referenda activity and fiscal performance by using a new dataset containing information on all 2500 voter initiatives between 1995 to 2011 this selection on observables approach however suffers from obvious endogeneity problems in this application the main part of the paper exploits population dependent discontinuities in the signature and quorum requirements of referenda to implement a regression discontinuity design rdd to safeguard against co treatments that might affect fiscal outcomes simultaneously at the same thresholds we validate our results by extending the rdd approach to a difference in discontinuity did design by studying direct legislation in an archetypical cooperative federation as germany our paper extends the literature to a novel institutional setting the results indicate that in our setting and in contrast to most of the evidence from switzerland and the us direct democracy causes an expansion of local government budgets

carbon control policies competitiveness and border tax adjustments abstract several propositions have recently been made to use border tax adjustments btas to address the loss of competitiveness induced by unilateral stringent domestic pollution control policies this paper explores in a general equilibrium framework the sectoral and welfare implications of a unilateral domestic ghg control policy combined with a bta scheme using the canadian economy as an illustration we assess the extent to which btas achieve their objectives and analyze the impacts of different methods of recycling the bta proceeds to support domestic industries our simulation results suggest that imposing btas on the imports of non fossil and energy intensive products reduces or removes completely the negative competitiveness impacts that domestic industries suffer from the use of the proceeds of the btas to support domestic energy intensive industries improves their competitiveness and more importantly in some cases overprotects them as it allows them to even increase their output in comparison to the benchmark without emissions control our results also shed light on the existence of heterogeneity in the composition of energy intensive industries as far as the recycling method of the bta proceeds is concerned energy intensive industries that are more oriented toward the domestic market are better off with the recycling of the bta proceeds towards gross output than towards exports alone finally abstracting from the environmental benefits of reduced emissions we find that a bta entails a higher welfare cost to households

asymmetric information and the new theory of the firm financial constraints and risk behavior this paper summarizes recent developments in the theory of the firm that have arisen in examining the implications of imperfect information it shows that a wide range of these models have similar implications for the likely reaction of firms to external environmental and policy changes two significant implications are 1 that firms behave as if they are risk averse individuals maximizing a utility function of terminal wealth profitability even when the risks involved are unsystematic and 2 in many circumstances because this utility function is likely to be characterized by decreasing absolute risk aversion firms are likely to respond significantly and positively to changes in cash flow and profitability together these two phenomena are able to account for a wide range of firm behaviors that have been empirically observed both formally and informally and that are difficult to explain in terms of the traditional theory of the firm furthermore the responses of such firms to policy interventions are likely to differ significantly from those of neoclassical firms this abstract was borrowed from another version of this item

growth renewables and the optimal carbon tax optimal climate policy is investigated in a ramsey growth model of the global economy with exhaustible oil reserves an infinitely elastic supply of renewables stock dependent oil extraction costs and convex climate damages four regimes can occur depending on the initial social cost of oil being larger or smaller than that of renewables and depending on the initial oil stock being large or small we also offer some policy simulations for the first and second regime which illustrate that with a lower discount rate more oil is left in situ and renewables are phased in more quickly we identify the conditions under which the optimal carbon tax rises or decreases subsidizing renewables without a carbon tax induces more oil to be left in situ and a quicker phasing in of renewables but oil is depleted more rapidly initially the net effect on global warming is ambiguous abstract from author

the contribution of efficient energy pricing to reducing carbon dioxide emissions abstract carbon dioxide co2 emissions from energy utilization are a major factor contributing to the greenhouse effect removing existing price distortions and imposing privately efficient energy pricing makes a substantial impact on energy demand the estimated reduction in co2 emissions in the usa china and india by adopting privately efficient electricity pricing is just less than the uk s total annual emissions of co2 from fossil fuel combustion however privately efficient pricing does not ensure the optimal social level of energy production that is necessary for averting the greenhouse effect further policy instruments and considerations need to be adhered to in order to attain this optimum level globally