the impact of possible climate catastrophes on global warming policy abstract recent studies on global warming have introduced the inherent uncertainties associated with the costs and benefits of climate policies and have often shown that abatement policies are likely to be less aggressive or postponed in comparison to those resulting from traditional cost benefit analyses cba yet those studies have failed to include the possibility of sudden climate catastrophes the aim of this paper is to account simultaneously for possible continuous and discrete damages resulting from global warming and to analyse their implications on the optimal path of abatement policies our approach is related to the new literature on investment under uncertainty and relies on some recent developments of the real option in which we incorporated negative jumps climate catastrophes in the stochastic process corresponding to the net benefits associated with the abatement policies the impacts of continuous and discrete climatic risks can therefore be considered separately our numerical applications lead to two main conclusions i gradual continuous uncertainty in the global warming process is likely to delay the adoption of abatement policies as found in previous studies with respect to the standard cba however ii the possibility of climate catastrophes accelerates the implementation of these policies as their net discounted benefits increase significantly

measuring the efficiency of energy intensive industries across european countries abstract this study evaluates the energy efficiency trends of five energy intensive industries in 23 european union eu countries over the period 2000 2009 in particular the performance of the construction electricity manufacturing mining and quarrying and transport sectors is examined the analysis is based on data envelopment analysis dea combined with the malmquist productivity index mpi which allows for distinctions between efficiency and technology changes over time at the second stage of the analysis cross classified multilevel modelling is applied to analyse the main drivers behind efficiency performance using a number of sector and country characteristics based on dea results an overall improvement in efficiency is observed in all sectors over the period the decomposition of the mpi indicates that technology change is primarily responsible for the improvements achieved in most sectors the results obtained by the cross classified model show among other things that the high electricity prices energy taxes and market share of the largest generator in the electricity market have a negative effect on industrial energy efficiency

global wind power development economics and policies abstract existing literature indicates that theoretically the earth s wind energy supply potential significantly exceeds global energy demand yet only 2 3 of global electricity demand is currently derived from wind power despite 27 annual growth in wind generating capacity over the last 17 years more than 95 of total current wind power capacity is installed in the developed countries plus china and india our analysis shows that the economic competitiveness of wind power varies at wider range across countries or locations a climate change damage cost of us 20 tco 2 imposed to fossil fuels would make onshore wind competitive to all fossil fuels for power generation however the same would not happen to offshore wind with few exceptions even if the damage cost is increased to us 100 tco 2 to overcome a large number of technical financial institutional market and other barriers to wind power many countries have employed various policy instruments including capital subsidies tax incentives tradable energy certificates feed in tariffs grid access guarantees and mandatory standards besides climate change mitigation policies such as the clean development mechanism have played a pivotal role in promoting wind power despite these policies intermittency the main technical constraint could remain as the major challenge to the future growth of wind power

quality of service efficiency and scale in network industries an analysis of european electricity distribution quality of service qos is of major economic significance in natural monopoly infrastructure industries in this article we present an efficiency analysis of electricity distribution networks from seven european countries we apply the stochastic frontier analysis method to multi output translog input distance function models to estimate cost efficiency and scale economies we show that introducing the quality dimension into the analysis affects estimated efficiency significantly especially that smaller utilities efficiency seems to decrease our results emphasize that qos should be an integrated part of efficiency and economic analysis of regulated natural monopolies

efficiency analysis of chinese industry a directional distance function approach two efficiency measures of chinese industry were estimated at the provincial level from 1994 to 2002 using a directional output distance function one is a traditional efficiency measure that considers only desirable output while the other considers both desirable and undesirable outputs simultaneously a comparison of the two measures revealed that efficiency levels are biased only if desirable output is considered five coastal provinces municipalities that have attracted a large amount of foreign direct investment are found to be the most efficient when only desirable output is considered and also when both desirable and undesirable outputs are considered however omitting undesirable output tends to lead to an overestimate of industrial efficiency levels in shandong sichuan and hebei provinces we also found that a province s industrial structure has significant effects on its efficiency levels

changing sunshine analyzing the dynamics of solar electricity policies in the global context abstract although solar costs have been dropping in recent years solar power is still more expensive than conventional and other renewable energy options and in most applications solar power still needs continuing government policy support however the need to achieve multiple objectives and ensure sufficient political support for solar power makes it difficult for policy makers to design an optimal solar power policy the dynamic and uncertain nature of the solar industry combined with the constraints imposed by broader economic political and social conditions further complicates the task of policy making in this paper we present a framework to critically analyze the objectives behind different country policies how factors such as macro economic conditions and development paradigms affect the policy outcomes and finally how these outcomes affect the overall cost reduction of solar energy we find that while the extent of cost reduction through creation of large demand remains to be seen it is essential for governments to provide adequate support for leapfrog rd d and exploit real comparative advantages across countries for effective solar cost reduction policy makers need to optimally design their policies by balancing national objectives and paying capacity with the global objective of solar power cost reduction in order to realize its full potential

determinants of energy demand in the french service sector a decomposition analysis abstract this paper analyzes the changes in the energy consumption of the service sector in france over the period 1995 2006 using the logarithmic mean divisia index i lmdi i decomposition method the analysis is carried out at various disaggregation levels to highlight the specifics of each sub sector and end use according to their respective determinants the results show that in this period the economic growth of the service sector was the main factor that led to the increase in total energy consumption structure productivity substitution and intensity effects restricted this growth but with limited effect by analyzing each end use this paper enables a more precise understanding of the impact of these factors the activity effect was the main determinant of the increase in energy consumption for all end uses except for air conditioning for which the equipment rate effect was the main factor structural changes in the service sector primarily impacted energy consumption for space heating and cooking improvements in productivity limited the growth of energy consumption for all end uses except for cooking finally energy efficiency improvements mainly affected space heating energy use

energy and climate policy in china s twelfth five year plan a paradigm shift the twelfth five year plan fyp endorsed by the people s national congress in march 2011 plays a crucial role in shaping china s development trajectory over the next decades and especially for the fulfillment of the 40 45 carbon intensity reduction target by 2020 the plan will condition both the medium and long term perspectives of economic restructuring rebalance between the inclusive economic growth and environmental objectives which are compounded by multiple constraints faced by china such as aging population natural resources depletion energy supply security and environmental deterioration this article investigates the major energy and climate targets and actions specified in the 12th fyp to gain insights into the nature and magnitude of challenges and difficulties with regard to the medium and long run economic and environmental policies it points out that china should articulate sectoral policies with the global climate mitigation targets to avoid long term carbon lock in based on an in depth analysis of the objectives in the plan it is argued that the implementation should include mainstreaming developments of appropriate instruments to support cost effective energy efficiency improvements and carbon intensity reduction in the next five years

alternative policy impacts on us ghg emissions and energy security a hybrid modeling approach abstract this study addresses the possible impacts of energy and climate policies namely corporate average fleet efficiency cafe standard renewable fuel standard rfs and clean energy standard ces and an economy wide equivalent carbon tax on ghg emissions in the us to the year 2045 bottom up and top down modeling approaches find widespread use in energy economic modeling and policy analysis in which they differ mainly with respect to the emphasis placed on technology of the energy system and or the comprehensiveness of endogenous market adjustments for this study we use a hybrid energy modeling approach markal macro that combines the characteristics of two divergent approaches in order to investigate and quantify the cost of climate policies for the us and an equivalent carbon tax the approach incorporates macro economic feedbacks through a single sector neoclassical growth model while maintaining sectoral and technological detail of the bottom up optimization framework with endogenous aggregated energy demand our analysis is done for two important objectives of the us energy policy ghg reduction and increased energy security our results suggest that the emission tax achieves results quite similar to the ces policy but very different results in the transportation sector the cafe standard and rfs are more expensive than a carbon tax for emission reductions however the cafe standard and rfs are much more efficient at achieving crude oil import reductions the gdp losses are 2 0 and 1 2 relative to the base case for the policy case and carbon tax that difference may be perceived as being small given the increased energy security gained from the cafe and rfs policy measures and the uncertainty inherent in this type of analysis

forecasting global developments in the basic chemical industry for environmental policy analysis the chemical sector is the largest industrial energy user but detailed analysis of its energy use developments lags behind other energy intensive sectors a cost driven forecasting model for basic chemicals production is developed accounting for regional production costs demand growth and stock turnover the model determines the global production capacity placement implementation of energy efficient best practice technology bpt and global carbon dioxide co2 emissions for the period 2010 2030 subsequently the effects of energy and climate policies on these parameters are quantified about 60 of new basic chemical production capacity is projected to be placed in non oecd regions by 2030 due to low energy prices while global production increases by 80 between 2010 and 2030 the oecd s production capacity share decreases from 40 to 20 and global emissions increase by 50 energy pricing and climate policies are found to reduce 2030 co2 emissions by 5 15 relative to the baseline developments by increasing bpt implementation maximum bpt implementation results in a 25 reduction further emission reductions require measures beyond energy efficient technologies the model is useful to estimate general trends related to basic chemicals production but improved data from the chemical sector is required to expand the analysis to additional technologies and chemicals

carbon pricing and energy efficiency improvement why to miss the interaction for developing economies an illustrative cge based application to the pakistan case abstract carbon energy taxes and energy efficiency improvement are studied well in the recent years for their potential adverse impacts on economy especially for lost production and international competitiveness and rebound effects however little attention has been paid to investigate them jointly which can not only prevent fall of energy services cost and thereby rebound effect but reduce the associated macroeconomic costs this study thus employs a 20 sector cge model to explore separately the impacts of carbon tax and its coordinated implementation with energy efficiency improvement on the pakistan economy the country underwent enormous pressure of energy security issues as well as climate change fallouts in the last couple of years and can be regarded as a suitable candidate for energy environmental conservation policies to be considered at a broader context with more concrete efforts the simulation results show that the impact of carbon tax on gdp is negative but resulting reductions in pollutant emissions are relatively high moreover the gdp is expected to grow comparatively positive when analyzed with improvements in energy efficiency with even higher decline in energy consumption demand and so emissions this simultaneous economic and environmental improvement would thus have positive implications regarding sustainable development of the country

regulation and efficiency an empirical analysis of the united kingdom continental shelf petroleum industry abstract the petroleum industry of the united kingdom continental shelf ukcs has been subject to various degrees of regulation self sufficiency security of supply and developing offshore supply industry triggered government regulations that were seen as interventionary and protectionist this paper tests the extent to which regulations targeting involvement of british offshore supply industry in the ukcs activity created inefficiencies data envelopment analysis dea stochastic frontier analysis sfa malmquist indices and standard regression analysis are used to measure the amount and address the source of inefficiencies we will show that such inefficiencies could not be ruled out the results provide an important insight into the ukcs production techniques and more generally into governments abilities to influence private sector behaviour through contracts and tendering

using contingent pricing analysis to value open space and its duration at residential locations to estimate benefits from open space adjacent to residences this paper blends contingent valuation and conjoint analysis within a housing market context the resulting framework contingent pricing analysis represents the stated preference counterpart to hedonic pricing analysis by asking individuals to state prices for hypothetical housing locations which include an environmental amenity then it asks individuals to state their willingness to pay for a better and longer lasting environmental amenity as an advantage over hedonic pricing analysis it directly isolates willingness to pay results indicate that potentially short lasting open space adds no value while preserved open space adds 5 066 or 5 to housing value

energy transition carbon dioxide reduction and output growth in the swedish pulp and paper industry 1973 2006 this study examines the historical relation between carbon dioxide emission and output growth in the swedish pulp and paper industry from 1973 to 2006 we find that the industry achieved an 80 perc

efficiency based rank assessment for electric power industry a combined use of data envelopment analysis dea and dea discriminant analysis da abstract this study discusses a combined use of dea data environment analysis and dea da discriminant analysis to determine the efficiency based rank of energy firms this type of performance evaluation is important because we often have a difficulty in accessing a large sample on energy firms to derive reliable empirical results the proposed approach is useful in dealing with such a limited number of energy firms often found in previous dea studies on energy industries in the world the proposed approach uses dea to classify energy firms into efficient and inefficient groups based upon their efficiency scores then it utilizes dea da to assess their efficiency scores and ranks in this stage we can find an adjusted efficiency score for each energy firm the proposed approach provides us with the following analytical capabilities all of which cannot be found in a conventional use of dea in assessing energy firms first the proposed dea approach can avoid zero in all multipliers on efficient energy firms by incorporating scsc strong complementary slackness condition so that it can handle an occurrence of multiple reference sets and multiple projections the dea result classifies all energy firms into efficient and inefficient groups second dea da applied to the two groups evaluates all energy firms by an industry wide evaluation not depending upon a limited number of efficient energy firms in a reference set as found in a conventional use of dea the analytical capability can reduce the number of efficient energy firms third the proposed approach can provide their efficiency based ranking scores finally we can conduct a rank sum test based upon their ranking scores to obtain a statistical inference as an application this study uses the proposed approach to examine the performance of japanese electric power industry we find two economic implications one of the two implications is that no major change has occurred in the operational performance of japanese electric power industry because of japanese sluggish economy from 2005 to 2009 the other implication indicates that there are strategic differences in the operation of japanese electric power firms after the liberalization

the european framework for energy and climate policies european energy and climate change policy rests on two main pillars the internal energy market iem and the climate change package ccp the iem aimed at third party access and unbundling neglecting the physical infrastructure and the basis for asset valuations and hence the harmonisation of network charges the commission plans to complete the iem by 2014 almost a quarter of a century after embarking on the policy yet even if all the iem directives are implemented the eu will remain far from a single competitive market the ccp was grounded on short term targets the 2020 20 20 programme on the assumption that fossil fuel prices would rise making renewables competitive and hence yielding a competitive advantage to the eu the euets was intended to lead the way to a global trading system and an international agreement at copenhagen the eu has reduced the production of carbon emissions but only as a result of de industrialisation and slow growth and at the expense of rising carbon consumption renewables have not led to green growth but rather to a further eroding of competitiveness the euets price has collapsed in order for the eu to put the iem and the ccp back on track both need to be radically reconsidered the iem requires a refocusing on physical infrastructure common accounting rules and an eu wide approach to capacity markets and renewables trading the ccp requires a refocusing on carbon consumption on limiting the dash for coal and on future rather than current renewables

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

prices technology development and the rebound effect abstract energy efficiency is the critical parameter for policies that aim at reducing energy consumption while maintaining or even boosting economic growth the two main options to influence energy efficiency are changes in relative prices i e raising the price of energy through economic instruments or to introduce new technologies which increase the productivity of each unit of energy this paper is based on the notion that in an equilibrium economy the marginal economic productivity is identical for all factors i e energy labour knowledge and capital from this premise two main conclusions can be drawn first any change in price or technology will have an impact on the whole economy by creating feedbacks through the substitution of factors of production and goods as well as increased wealth second the two policy approaches changing relative prices and technology development are not opposite to each other they are the two faces of the same reality and should be developed and promoted simultaneously and consistently

trend analysis of energy and climate policy environment comparative electricity production and consumption benchmark analyses of china euro area european union and united states abstract this study conducts a reality check on the electricity production and electricity consumption trends in china in the u s and in the euro area and in the eu most of our analyses cover years 1961 2011 the data is based on the world bank s database with supplementary iea database 2013 in this article we perform various trend analyses which are linked to electricity production and consumption developments these regions are major players in global climate change and climate policy our trend analyses indicate in many ways that china is now a global trend setter in climate change and climate policy upwards sloping trends were evident in the chinese energy economy however u s and the eu are still very important players trend analyses of this article indicate that the structures of electricity production and energy mixes are changing our benchmarking studies indicate that the role of renewables is increasing in electricity production and the role of oil based electricity production has drastically decreased the golden age of nuclear energy in electricity production seems to be over at least turning points can be found in trend developments empirical trade off analyses of the study verified conventional research results about high linear correlation coefficients regression models between electricity production and gdp as well as between population and gpd in all regions correlation coefficients measure the strength of association between two variables what was interesting is that our comparative analyses revealed some remarkable differences in linear regression equation coefficients one of them was that the coefficient between population and electricity production is much lower in china than in the u s or in the eu second finding was that the coefficient of the regression model describing linear relationship between gdp and electricity production is highest in china in comparison to the other regions

targets for global climate policy an overview a survey of the economic impact of climate change and the marginal damage costs shows that carbon dioxide emissions are a negative externality the estimated pigou tax and its growth rate are too low to justify the climate policy targets set by political leaders a lower discount rate or greater concern for the global distribution of income would justify more stringent climate policy but would imply an overhaul of other public policies catastrophic risk justifies more stringent climate policy but only to a limited extent

industrial energy efficiency with co2 emissions in china a nonparametric analysis abstract global awareness on energy security and climate change has created much interest in assessing economy wide energy efficiency performance a number of previous studies have contributed to evaluate energy efficiency performance using different analytical techniques among which data envelopment analysis dea has recently received increasing attention most of dea related energy efficiency studies do not consider undesirable outputs such as co 2 emissions in their modeling framework which may lead to biased energy efficiency values within a joint production framework of desirable and undesirable outputs in this paper we construct both static and dynamic energy efficiency performance indexes for measuring industrial energy efficiency performance by using several environmental dea models with co 2 emissions the dynamic energy efficiency performance indexes have further been decomposed into two contributing components we finally apply the indexes proposed to assess the industrial energy efficiency performance of different provinces in china over time our empirical study shows that the energy efficiency improvement in china s industrial sector was mainly driven by technological improvement

cost efficiency in the swiss gas distribution sector this paper studies the cost structure of gas distribution utilities in switzerland three stochastic frontier models are applied to a panel of 26 companies operating from 1996 to 2000 efficiency is assumed to be constant over time the analysis highlights the importance of output characteristics such as customer density and network size the results suggest that the utilities could slightly reduce their operating costs by improving efficiency there is no evidence of significant unexploited scale economies however our analysis indicates that the estimates of scale economies could be sensitive to the assumptions regarding the variation of output with output characteristics

estimating and decomposing productivity growth of the electricity generation industry in malaysia a stochastic frontier analysis this study examines the total factor productivity tfp growth of the malaysian electricity generation industry over the 1998 to 2005 period the stochastic frontier analysis sfa approach is used to measure tfp change and decompose tfp growth into efficiency change and technical progress we find that it achieved average annual tfp growth of 2 34 with technical change contributing the most to the tfp growth over the eight year period we hence hypothesise that the new power plants with their newer capital embodied technologies commencing during the sample period are likely to be the main reason for this strong technical change in addition it is also noted that this estimate for the malaysian electricity generation industry is larger than the estimate obtained for the electricity sector as a whole where we obtain 1 34 per year for a comparable period

productivity growth technical progress and efficiency change in industrialized countries this paper analyzes productivity growth in 17 oecd countries over the period 1979 1988 a nonparametric programming method activity analysis is used to compute malmquist productivity indexes these are decomposed into two component measures namely technical change and efficiency change we find that u s productivity growth is slightly higher than average all of which is due to technical change japan s productivity growth is the highest in the sample with almost half due to efficiency change jel c43 d24 in this paper we apply recently developed

dea approach for unified efficiency measurement assessment of japanese fossil fuel power generation this study discusses a new dea data envelopment analysis approach to measure the unified operational and environmental efficiency of energy firms it is widely known that they produce not only desirable good outputs e g electricity but also undesirable bad outputs e g co2 as a result of their plant operations the proposed approach incorporates an output separation desirable and undesirable outputs for the performance evaluation of energy firms in addition to the output separation this study separates inputs into energy and non energy inputs consequently the proposed approach incorporates not only the output separation but also the input separation within a computational framework of dea non radial measurement this study compares the proposed approach with other previous dea approaches used for the performance evaluation of energy firms after the methodological comparison this study applies the proposed approach for measuring the unified efficiency of japanese fossil fuel power generation this empirical study confirms that the implementation of kyoto protocol 2005 has not been effective on the unified efficiency of japanese fossil fuel power generation during the observed period 2004 2008 although the empirical result is inconsistent with the current japanese environmental policy under kyoto protocol it contains policy implications for guiding the future direction of japanese environmental policy on the electric power industry

global estimates of energy growth nexus application of seemingly unrelated regressions as the world struggles to emerge from a global recession and financial crisis countries are looking for solutions to improve domestic economic performance and put people back to work global energy demand and prices have been resilient during the recession leading policy makers in countries with the potential to produce energy to look to that sector as a potential engine for economic growth the objective of this study is to undertake an empirical study on linkages among energy consumption economic growth fdi relative price and financial development i e broad money supply m2 in low income middle income high income non oecd high income oecd south africa middle east and north africa mena and the aggregate data of the world over a period of 1975 2011 data is analyzed by the im pesaran shin ips test of unit root to find out the order of integration the long run relationship is investigated through the pedroni 37 test of panel cointegration at last the seemingly unrelated regression sur method is used for estimation of the impact of growth factors on energy consumption in these regions the results reveal that each variable seem to have a unit root at level so we could investigate cointegration of the series at level on the basis of pedroni test we can bring to a close that series are cointegrated the results of seemingly unrelated regression sur suggests that gdp per capita has a positive impact on energy consumption in low income middle income south africa mena and aggregate data of the world however in high income oecd and non oecd regions there is no significant relationship been found in both regions fdi plays a pivotal role in increasing energy demand in middle income high income oecd and non oecd region which implies that whatever other benefits may accrue from fdi it should not be expected to generate sufficient energy in south africa mena and the world directly fdi enhancement policies should be supplemented to stimulate growth in those regions broad money supply exerts positive impact on energy demand in low income middle income high income non oecd and mena regions finally relative prices has either a positive impact i e middle income region and or a negative impact on energy consumption i e low income high income oecd and mena region the results conclude that lower energy prices reduce input costs for nearly all goods and services in the regions thus making them more affordable