the prospects for coal to liquid conversion a general equilibrium analysis we investigate the economics of coal to liquid ctl conversion a polygeneration technology that produces liquid fuels chemicals and electricity by coal gasification and fischer tropsch process ctl is more expensive than extant technologies when producing the same bundle of output in addition the significant carbon footprint of ctl may raise environmental concerns however as petroleum prices rise this technology becomes more attractive especially in coal abundant countries such as the u s and china furthermore including a carbon capture and storage ccs option could greatly reduce its co2 emissions at an added cost to assess the prospects for ctl we incorporate the engineering data for ctl from the u s department of energy doe into the mit emissions prediction and policy analysis eppa model a computable general equilibrium model of the global economy based on doe s plant design that focuses mainly on liquid fuels production we find that without climate policy ctl has the potential to account for up to a third of the global liquid fuels supply by 2050 and at that level would supply about 4 6 of global electricity demand a tight global climate policy on the other hand severely limits the potential role of the ctl even with the ccs option especially if low carbon biofuels are available under such a policy world demand for petroleum products is greatly reduced depletion of conventional petroleum is slowed and so the price increase in crude oil is less making ctl much less competitive

the canadian oil sands industry under carbon constraints abstract we investigate the impact of climate policies on canada s oil sands industry the largest of its kind in the world deriving petroleum products such as gasoline and diesel from oils sands involves significant amounts of energy and that contributes to a high level of co2 emissions we apply the mit emissions prediction and policy analysis eppa model a computable general equilibrium model of the world economy augmented to include detail on the oil sands production processes including the possibility of carbon capture and storage ccs we find 1 without climate policy annual canadian bitumen production increases almost 4 fold from 2010 to 2050 2 with climate policies implemented in developed countries canadian bitumen production drops by 32 to 68 from the reference 4 fold increase depending on the viability of large scale ccs implementation and bitumen upgrading capacity moves to the developing countries 3 with climate policies implemented worldwide the canadian bitumen production is significantly reduced even with ccs technology which lowers co2 emissions at an added cost this is mainly because upgrading bitumen abroad is no longer economic with the global climate policies

the stability of the demand for international reserves abstract empirical studies based on data from the 1960s and 1970s yielded estimated demands for international reserves that have been regarded as stable functions of a limited set of variables exept during the period surrounding the collapse of the bretton woods system this paper examines the stability of these estimated demands by extending the samles to include data from the 1980s the new estimation results indicate that the emergenceof external payments difficulties and reduced access to international financial markets of many countries have been accompanied by changes in the changes in the estimated demands for reserves that were as large as those that occurred during the collapse ofthe bretton woods system

the impact of oil prices on bioenergy emissions and land use we evaluate how alternative future oil prices will influence the penetration of biofuels energy production greenhouse gas ghg emissions land use and other outcomes our analysis employs a global economy wide model and simulates alternative oil prices out to 2050 with and without a price on ghg emissions in one case considered based on estimates of available resources technological progress and energy demand the reference oil price rises to 124 by 2050 other cases separately consider constant reference oil prices of 50 75 and 100 which are targeted by adjusting the quantity of oil resources in our simulations higher oil prices lead to more biofuel production more land being used for bioenergy crops and fewer ghg emissions reducing oil resources to simulate higher oil prices has a strong income effect so decreased food demand under higher oil prices results in an increase in land allocated to natural forests we also find that introducing a carbon price reduces the differences in oil use and ghg emissions across oil price cases

co2 emission standards and investment in carbon capture abstract policy makers in a number of countries have proposed or are considering proposing co 2 emission standards for new fossil fuel fired power plants the proposed standards require coal fired power plants to have approximately the same carbon emissions as an uncontrolled natural gas fired power plant effectively mandating the adoption of carbon capture and sequestration ccs technologies for new coal plants however given the uncertainty in the capital and operating costs of a commercial scale coal plant with ccs the impact of such a standard is not apparent a priori we apply a stochastic generation expansion model to determine the impact of co 2 emission standards on generation investment decisions and in particular for coal plants with ccs moreover we demonstrate how the incentive to invest in coal ccs from emission standards depends on the natural gas price the co 2 price and the enhanced oil recovery price as well as on the level of the emission standard this analysis is the first to consider the entire power system and at the same time allow the capture percentage for ccs plants to be chosen from a continuous range to meet the given standard at minimum cost previous system level studies have assumed that ccs plants capture 90 of the carbon while studies of individual units have demonstrated the costs of carbon capture over a continuous range we show that 1 currently proposed levels of emission standards are more likely to shift fossil fuel generation from coal to natural gas rather than to incentivize investment in ccs 2 tighter standards that require some carbon reductions from natural gas fired power plants are more likely than proposed standards to incentivize investments in ccs especially on natural gas plants but also on coal plants at high gas prices and 3 imposing a less strict emission standard emission rates higher than natural gas but lower than coal e g 1500 lbs mwh is more likely than current proposals to incentivize investment in coal ccs technology but only at high gas prices and to a lesser extent than a stringent standard e g 300 lbs mwh

oil prices and the global economy a general equilibrium analysis a global computable general equilibrium model is used to analyze the economic impacts of rising oil prices with endogenously determined availability of biofuels to mitigate those impacts the negative effects on the global economy are comparable to those found in other studies but the impacts are unevenly distributed across countries regions or sectors the agricultural sectors of high income countries which are relatively energy intensive will suffer more from a rising oil prices than that in lower income countries whereas the reverse is true for the impacts across manufacturing sectors the impacts are especially strong for oil importers with relatively energy intensive manufacturing and trade such as india and china while the availability of biofuels does mitigate some of the negative impacts of rising oil prices the benefit is small because capacity of biofuels to economically substitute for fossil fuels on a large scale remains limited

long term oil prices abstract in this paper we propose a model to estimate and simulate long term oil prices our model is based on properties of demand and supply for oil and it is able to reproduce historical real oil prices well we use the model to estimate and simulate future real oil price scenarios the results show that if we are not able to significantly increase demand elasticity the yearly real oil price change can reach 12 in the years following the peak production level without taking a scarcity rent into account until peak production level is reached the long term real oil price changes stemming from fundamental supply and demand changes are expected to be negative our simulation results based on an expected peak production year of 2020 and a scarcity rent of 3 suggest an expected real crude oil price of 169 bbl in 2040 for comparison the eia outlook predicts a real oil price of 141 bbl for the same year we also provide an on line appendix that allows the readers to change the assumptions underlying our analysis and see the results immediately

modelling long term oil price and extraction with a hubbert approach the lopex model abstract the lopex l ong term o il p rice and ex traction model generates long term scenarios about future world oil supply and corresponding price paths up to the year 2100 in order to determine oil production in non opec countries the model uses hubbert curves hubbert curves reflect the logistic nature of the discovery process and the associated constraint on temporal availability of oil extraction paths and world oil price path are both derived endogenously from opec s intertemporally optimal cartel behaviour thereby opec is faced with both the price dependent production of the non opec competitive fringe and the price dependent world oil demand world oil demand is modelled with a constant price elasticity function and refers to a scenario from acropolis poles lopex results indicate a significant higher oil price from around 2020 onwards compared to the reference scenario and a stagnating market share of maximal 50 to be optimal for opec

demand for international reserves corrections for serial correlation and heteroscedasticity 1987 demand for international reserves corrections for serial correlation and heteroscedasticity applied economics vol 19 no 5 pp 609 618

the future of u s natural gas production use and trade two computable general equilibrium models one global and the other providing u s regional detail are applied to analysis of the future of u s natural gas the focus is on uncertainties including the scale and cost of gas resources the costs of competing technologies the pattern of greenhouse gas mitigation and the evolution of global natural gas markets results show that the outlook for gas over the next several decades is very favorable in electric generation given the unproven and relatively high cost of other low carbon generation alternatives gas is likely the preferred alternative to coal a broad ghg pricing policy would increase gas use in generation but reduce use in other sectors on balance increasing its role from present levels the shale gas resource is a major contributor to this optimistic view of the future of gas gas can be an effective bridge to a lower emissions future but investment in the development of still lower co2 technologies remains an important priority international gas resources may well prove to be less costly than those in the u s except for the lowest cost domestic shale resources and the emergence of an integrated global gas market could result in significant u s gas imports

kalman filter approach to estimate the demand for international reserves a few studies have provided empirical support for the fact that the demand for international reserves experienced structural instability in 1973 and 1979 due to a change in exchange rate system and oil price shocks thus under the current managed float due to exchange rate and oil price fluctuations coefficient estimates could be time dependent after showing that indeed estimated coefficients are time dependent the kalman filter estimation method is employed and the reserve demand function for 19 industrial countries estimated the kalman filter approach incorporates the time varying properties of coefficients estimates

the demand for international reserves and exchange rate adjustments thecase of ldcs 1964 1972 in this paper the relationship between the demand for international reserves and exchange rate adjustments is empirically investigated for agroup of ldc s it is shown that countries that have maintained a fixed exchange rate for a long period of time have a different demand function than countries that have occasionally used exchange rate adjustments for correcting payments imbalances the dynamics of the adjustment for both groupsof countries are also analyzed the results show that while both groups tend to eliminate reserve disequilibria fast those countries that have maintained a fixed rate tend to do it more slowly than countries that have occasionally devalued their currency it is also shown that the year prior to a devaluation international reserves have been on average 30 below their short run desired level these results are important since they indicate that not all ldc s should be aggregated for prediction purposes the results also have implications for the analysis of the adequacy of international reserves in less developed countries this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract wa this abstract was borrowed from another version of this item

the effectiveness of policies to transform a gas exporting country into a gas transit country the case of the netherlands the netherlands has been a major european natural gas producer and exporter for many decades but now faces the challenge to deal with diminishing resources in response the dutch government initiated a gas hub strategy which is the policy to transform the gas industry from an export oriented business into a transit oriented business this policy included a number of investments in the gas infrastructure as well as institutional reforms to enhance the liquidity of the gas market we study the effects of this gas hub policy using hourly data on the dutch gas balance over the period 2006 2013 we find that gas storage and trading have become more important but that the level of gas in transit in the netherlands remained fairly constant consequently the dutch gas industry is still mainly oriented on domestic production and export of gas while the dutch gas hub ttf has become a key virtual trading place the policy lesson from the dutch experience is that implementing a gas hub strategy requires significant investments in the gas infrastructure while their effects do not necessarily become visible in the short run

from value at risk to stress testing the extreme value approach this article presents an application of extreme value theory to compute the value at risk of a market position in statistics extremes of a random process refer to the lowest observation the minimum and to the highest observation the maximum over a given time period extreme value theory gives some interesting results about the distribution of extreme returns in particular the limiting distribution of extreme returns observed over a long time period is largely independent of the distribution of returns itself in financial markets extreme price movements correspond to market corrections during ordinary periods and also to stock market crashes bond market collapses or foreign exchange crises during extraordinary periods an approach based on extreme values to compute the var thus covers market conditions ranging from the usual environment considered by the existing var methods to the financial crises which are the focus of stress testing univariate extreme value theory is used to compute the var of a fully aggregated position while multivariate extreme value theory is used to compute the var of a position decomposed on risk factors 2000 elsevier science b v all rights reserved

effects of exchange rate flexibility on the demand for international reserves abstract we incorporate a measure of exchange rate flexibility into the standard reserve demand equation and present empirical results for the 1976 1985 period which are consistent with the work of officer 1976 and frenkel and jovanovic 1981 indicating the existence of economies of scale and the demand for reserves

climate change policy in brazil and mexico results from the mit eppa model based on an in depth analysis of results from the mit economic projection and policy analysis eppa model of climate policies for brazil and mexico we demonstrate that commitments by mexico and brazil for 2020 made during the un climate meetings in copenhagen and cancun are reachable but they come at different costs for each country we find that brazil s commitments will be met through reduced deforestation and at no additional cost however mexico s pledges will cost 4 billion us dollars in terms of reduced gdp in 2020 we explore short and long term implications of several policy scenarios after 2020 considering current policy debates in both countries the comparative analysis of these two economies underscores the need for climate policy designed for the specific characteristics of each country accounting for variables such as natural resources and current economic structure our results also suggest that both brazil and mexico may face other environmental and economic impacts from stringent global climate policies affecting variables such as the value of energy resources in international trade

austria s demand for international reserves and monetary disequilibrium the case of a small open economy with a fixed exchange rate regime using a vector error correction approach i estimate austria s demand for international reserves over the period 1985 1 1997 4 and test for short run effects of the disequilibrium on the national monetary market i find that austria s long run reserve demand can be described as a stable function of imports uncertainty and the opportunity cost of holding reserves with strong economies of scale the speed of adjustment takes a value of 38 per cent the results confirm that an excess of money demand supply induces an inflow outflow of international reserves as postulated by the monetary approach to the balance of payments

estimating the basis risk of index linked hedging strategies using multivariate extreme value theory this paper studies the empirical quantification of basis risk in the context of index linked hedging strategies basis risk refers to the risk of non payment of the index linked instrument given that the hedger s loss exceeds some critical level the quantification of such risk measures from empirical data can be done in various ways and requires special consideration of the dependence structure between the index and the company s losses as well as the estimation of the tails of a distribution in this context previous literature shows that extreme value theory can be superior to traditional methods with respect to estimating quantile risk measures such as the value at risk thus the aim of this paper is to conduct an empirical analysis of basis risk using multivariate extreme value theory and extreme value copulas to estimate the underlying risk processes and their dependence structure in order to obtain a more adequate picture of basis risk associated with index linked hedging strategies our results emphasize that the application of extreme value theory leads to better fits of the tails of the marginal distributions in the considered stock price sample and that traditional methods in regard to estimating marginal distributions tend to overestimate basis risk while basis risk can in contrast be higher when taking into account extreme value copulas

international diversification an extreme value approach abstract international diversification has costs and benefits depending on the degree of asset dependence we study international diversification with two dependence measures correlations and extreme dependence we discover that dependence has typically increased over time and document mixed evidence on heavy tails in individual countries moreover we uncover three additional findings related to dependence first the timing of downside risk differs depending on the region surprisingly recent latin american returns exhibit little downside risk second latin america exhibits a great deal of correlation complexity third according to the empirical results correlation does not vary with returns but extreme dependence does vary monotonically with regional returns our results are consistent with a tradeoff between international diversification and systemic risk they also suggest international limits to diversification and that international investors demand some compensation for joint downside risk during extreme events

a note on the optimal rate of growth of international reserves the current reform of the international monetary system rests on the conception that the nominal quantity of external reserves taken in the aggregate must provide the flexible element in the adjustment between the supply of and the demand for real international liquidity carried to its logical conclusion this principle implies the adoption of a passive money system in the international sphere the nominal quantity of money ceases to be an exogenous datum to which prices and wages must conform and becomes a dependent variable having an equilibrium level 1 the new reserve assets are destined to satisfy the long run needs for reserve growth 2 yet as is well known the evaluation of such needs presents appreciable difficulties in itself this estimation problem is not new it was explicitly discussed in the report of the gold delegation appointed in 1929 to examine the trends in the gold demand and supply the method used by the delegation is worth recalling it is based upon the double assumption that 1 the monetary demand for gold is proportional to the quantity of money and 2 the demand for money is proportional to the aggregate value of transactions the second part of this hypothesis reflects obviously the quantity theory in its classical form the first part expresses instead an institutional situation in those years the countries under the gold standard used to maintain by virtue of law or of convention a margin of gold cover against the total amount of notes and of central bank sight liabilities the combination of the two ratios led the delegation to estimate the need for gold reserves as a fixed proportion of the total value of transactions

the feasibility costs and environmental implications of large scale biomass energy abstract what are the feasibility costs and environmental implications of large scale bioenegry we investigate this question by developing a detailed representation of bioenergy in a global economy wide model we develop a scenario with a global carbon dioxide price applied to all anthropogenic emissions except those from land use change that rises from 25 per metric ton in 2015 to 99 in 2050 this creates market conditions favorable to biomass energy resulting in global non traditional bioenergy production of 150 exajoules ej in 2050 by comparison in 2010 global energy production was primarily from coal 138 ej oil 171 ej and gas 106 ej with this policy 2050 emissions are 42 less in our base policy case than our reference case although extending the scope of the carbon price to include emissions from land use change would reduce 2050 emissions by 52 relative to the same baseline our results from various policy scenarios show that lignocellulosic lc ethanol may become the major form of bioenergy if its production costs fall by amounts predicted in a recent survey and ethanol blending constraints disappear by 2030 however if its costs remain higher than expected or the ethanol blend wall continues to bind bioelectricity and bioheat may prevail higher lc ethanol costs may also result in the expanded production of first generation biofuels ethanol from sugarcane and corn so that they remain in the fuel mix through 2050 deforestation occurs if emissions from land use change are not priced although the availability of biomass residues and improvements in crop yields and conversion efficiencies mitigate pressure on land markets as regions are linked via international agricultural markets irrespective of the location of bioenergy production natural forest decreases are largest in regions with the lowest barriers to deforestation in 2050 the combination of carbon price and bioenergy production increases food prices by 3 2 5 2 with bioenergy accounting for 1 3 3 5

demand for international reserves survey of recent empirical studies in the last decade many countries have preferred to move to a system of managed floating that is intermediate between the extremes of fixed rates and a clean float since managing the float requires international reserves it is clear that the study of these reserves is as relevant today as it has been in the past there are at least six reviews of the literature relevant to this study clower and lipsey 1968 niehans 1970 salant 1970 grubel 1971 williamson 1973 and cohen 1975 the justification for writing this review is that since completion of the last survey many papers have appeared which contribute to the stock of knowledge in this field however unlike the previous reviews which have concentrated on the broader issues pertaining to international liquidity such as the demand for reserves the supply of reserves the composition and distribution of reserves etc this study focuses solely on surveying empirical studies bearing on the demand for international reserves this review wi

synergy between pollution and carbon emissions control comparing china and the united states abstract we estimate the potential synergy between pollution and climate control in the u s and china summarizing the results as emissions cross elasticities of control in both countries ancillary carbon reductions resulting from so 2 and no x control tend to rise with the increased stringency of control targets reflecting the eventual need for wholesale change toward non fossil technologies when large reductions are required under stringent pollution targets the non target effects tend to be higher in china than in the u s due to china s heavy reliance on coal this result suggests that china may have greater incentives to reduce so 2 and no x with locally apparent pollution benefits but related efforts would at the same time reduce co 2 emissions significantly we also find strong non target effects of co 2 abatement in both countries but the cross effects in this direction depend less on the stringency of control and are stronger in the u s than in china

the square root law uncertainty and international reserves under alternative regimes canadian experience 1950 1976 abstract a transactions precautionary model of demand for international reserves is developed and tested against canadian data the results indicate that i the demand for reserves is characterized by economies of scale with respect to the volume of transactions that are invariant to the exchange rate regime but ii structural change took the form of a relatively larger responsiveness of reserves holdings under fixed rates to a measure of permanent variability in transactions

lng is linking regional natural gas markets evidence from the gravity model abstract evidence exists that global natural gas markets have become more integrated over time one possible explanation for this increased level of integration is that increased liquefied natural gas trade has increased the opportunity for price arbitrage by decreasing transport costs if this explanation is true then the natural gas market should become relatively more integrated because countries separated by large distances would be more willing to trade with each other we employ a gravity model to test whether trade in liquefied natural gas has helped to de regionalize the total natural gas market using trade in the compressed natural gas market as a comparison benchmark the results indicate that liquefied natural gas is indeed a global commodity whereas the compressed natural gas markets are more regional importantly we find that trade in liquefied natural gas has de regionalized the total natural gas market

hedging performance and basis risk in stock index futures in early 1982 trading began at three different exchanges in futures contracts based on stock indexes stock index futures were an immediate success and quickly led to a proliferation of new futures and options markets tied to various indexes one reason for this success was that index futures greatly extended the range of investment and risk management strategies available to investors by offering them for the first time the possibility of unbundling the market and nonmarket components of risk and return in their portfolios many portfolio management and other hedging applications in investment banking and security trading have been described elsewhere1 ranging from use by a passive fund manager to reduce risk over a long time horizon to use by an underwriter to hedge the market risk exposure in a stock offering for one or two days in considering the potential applications of index futures it is clear that in nearly every case a cross hedge is involved that is the stock position that is being hedged is different from the underlying portfolio for the index contract 2 this means that return and risk for an index futures hedge will depend upon the behavior of the basis i e the difference between the futures price and the cash price hedging a position in stock will necessarily expose it to some measure of basis risk risk that the change in the futures price over time will not track exactly the value of the cash position basis risk can arise from a number of different sources and is a more significant problem for stock index contracts than for other financial futures like treasury bills and bonds 3 the most apparent cause of basis risk is the nonmarket component of return on the cash stock position since the index contract is tied to the behavior of an underlying stock market index nonmarket risk cannot be hedged this is the essential problem of a cross hedge however basis risk can be present even when the hedge involves a position in the index portfolio itself and there is no nonmarket risk for one thing returns to the index portfolio include dividends while the index and the index future only track the capital value of the portfolio any risk associated with dividends on the portfolio will become basis risk in a hedged position still dividends are fairly low and also quite stable so this may not be a terribly important shortcoming

introduction north american natural gas markets in transition abstract over many decades energy markets have seen a variety of new technologies with the potential of replacing existing practices for providing conventional fossil fuels unlike synthetic fuels during the 1970s or hydrogen during the 2000s however hydraulic fracturing for producing natural gas shale resources has had a dramatic impact because it has been cost effective this article describes a model comparison effort organized by stanford s energy modeling forum and provides a brief overview of the principal findings by individual modeling teams that participated in the study

the relationship between energy resource depletion climate change health resources and the environmental kuznets curve evidence from the panel of selected developed countries abstract the objective of the study is to examine the relationship between energy resource depletion climate change health resources and the environmental kuznets curve ekc under the financial constraint environment in the panel of selected developed countries over the period of 2000 2013 the study employed panel generalized method of moments gmm estimate for robust inferences the results confirmed the existence of ekc hypothesis in the energy resource depletion model i e inverted u shaped relationship between energy resource depletion and gdp per capita in the selected developed countries the results of climate change model confirmed the u shaped relationship of perfluorocarbons pfc gas emission and particulate matter 2 5 micrometers pm 2 5 emissions with the per capita income the health resource model confirmed the existence of inverted u shaped relationship of infant deaths and health expenditures per capita with the per capita income while there is a u shaped relationship between incidence of tuberculosis tb and gdp per capita the other results indicate that carbon dioxide co 2 emissions increase sulfur hexafluoride sf 6 emissions and health expenditures fossil fuel energy consumption increases pfc gas emissions and pm 2 5 emissions energy demand increases pm 2 5 emissions and health expenditures and financial dummy d 2008 affected energy resource depletion pm 2 5 emissions greenhouse gas ghg emissions index infant deaths and health expenditures per capita

exploring the driving factors of global lng trade flows using gravity modelling abstract taking into account the attributes of the liquefied natural gas lng trade and the space time characteristics of trade flows this paper identifies the multiple dimensional factors that influenced the global lng trade between 2004 and 2015 following an analysis of the data via the application of gravity models the empirical results of this study indicate that these influencing factors possess both general and regional characteristics in contrast to general trade the lng trade is mainly affected by the economic magnitude of the demand side regionally pipeline natural gas has a significant substitute effect on the lng trade within the global model though not within the asian model additionally the lng trade in asia is more sensitive to the influence of import prices and research and development investment than in the global model our subsample analyses show that the results are robustness across different periods finally this paper discusses pertinent policy implications for the lng trade especially as related to asia

the choice of the distribution of asset returns how extreme value theory can help abstract one of the issues of risk management is the choice of the distribution of asset returns academics and practitioners have assumed for a long time for more than three decades that the distribution of asset returns is a gaussian distribution such an assumption has been used in many fields of finance building optimal portfolio pricing and hedging derivatives and managing risks however real financial data tend to exhibit extreme price changes such as stock market crashes that seem incompatible with the assumption of normality this article shows how extreme value theory can be useful to know more precisely the characteristics of the distribution of asset returns and finally help to chose a better model by focusing on the tails of the distribution an empirical analysis using equity data of the us market is provided to illustrate this point

sensitivity of natural gas deployment in the us power sector to future carbon policy expectations abstract one option for reducing carbon emissions in the power sector is replacement of coal fired generation with less carbon intensive natural gas combined cycle ngcc generation in the united states where there is abundant low cost natural gas supply increased ngcc deployment could be a cost effective emissions abatement opportunity at relatively modest carbon prices however under scenarios in which carbon prices rise and deeper emissions reductions are achieved other technologies may be more cost effective than ngcc in the future in this analysis using a us energy system model with foresight a version of the national energy modeling system or nems model we find that varying expectations about carbon prices after 2030 does not materially affect ngcc deployment prior to 2030 all else equal an important implication of this result is that under the set of natural gas and carbon price trajectories explored here myopic behavior or other imperfect expectations about potential future carbon policy do not change the natural gas deployment path or lead to stranded natural gas generation infrastructure we explain these results in terms of the underlying economic competition between available generation technologies and discuss the broader relevance to us climate change mitigation policy

the basis risk of catastrophic loss index securities abstract using a windstorm simulation model developed by applied insurance research we analyze the effectiveness of catastrophic loss index options in hedging hurricane losses for florida insurers the results suggest that insurers in the two largest size quartiles can hedge losses almost as effectively using contracts based on four intrastate indices as they can using contracts that settle on their own losses many insurers in the third largest size quartile also can hedge effectively using the intrastate indices but most insurers in the smallest quartile would encounter significant basis risk hedging using a statewide loss index is effective only for the largest insurers

the cost of climate policy in the united states abstract we re evaluate prospects for us economic growth and the likely costs of advanced technologies given recent developments and then apply the mit emissions prediction and policy analysis eppa model to evaluate three core ghg policy scenarios for the us that cap emissions at different levels the three policy scenarios involve allowance allocations that through 2050 are 1 constant at present emissions levels 2 linearly reduced to 50 below present 3 linearly reduce emissions to 80 below present the cumulative allowance allocations over the horizon of the policy are 287 203 and 167 gt of co 2 equivalent respectively we compare the results to previous analysis of these same policy scenarios to evaluate how the changed growth and technology prospects affect the results we focus on 203 and 167 gt scenarios because current proposals envision deep cuts in emissions from present the 167 gt scenario is closest to proposals currently being considered by congress and supported by the us administration however we do not attempt to model specific details of actual proposals we test results to alternative assumptions about program coverage and banking behavior measured in terms of changes in economic welfare the economic cost of 203 and 167 gt cases is in the range of 2 to 3 by 2050 with co 2 prices between 48 and 67 in 2015 rising to between 190 and 266 by 2050 implementation details matter when an idealized economy wide cap and trade is replaced by coverage omitting some sectors or if the credibility of long term target is weak limiting banking behavior prices and welfare costs change substantially

the impacts of biofuel targets on land use change and food supply a global cge assessment this study analyzes the long term impacts of large scale expansion of biofuels on land use change food supply and prices and the overall economy in various countries or regions using a global computable general equilibrium model augmented by a land use module and detailed representation of biofuel sectors the study finds that an expansion of global biofuel production to meet currently articulated or even higher national targets in various countries for biofuel use would reduce gross domestic product at the global level however the gross domestic product impacts are mixed across countries or regions the expansion of biofuels would cause significant land re allocation with notable decreases in forest and pasture lands in a few countries the results also suggest that the expansion of biofuels would cause a reduction in food supply although the magnitude of the impact on food supply at the global level is not as large as perceived earlier it would be significant in developing countries like india and those in sub saharan africa agricultural commodities such as sugar corn and oil seeds which serve as the main biofuel feedstocks would experience significant increases in their prices in 2020 compared with the prices at baseline due to the expansion of biofuels to meet the existing targets

natural gas uncertainty and climate policy in the us electric power sector abstract this paper investigates how uncertainties related to natural gas prices and potential climate policies may influence capacity investments utilization and emissions in us electricity markets using a two stage stochastic programming approach model results suggest that climate policies are stronger drivers of greenhouse gas emission trajectories than new natural gas supplies the dynamics of learning and irreversibility may give rise to an investment climate where strategic delay is optimal hedging strategies are shown to be sensitive to the specification of probability distributions for climate policy and natural gas prices highlighting the important role of uncertainty quantification in future research the paper also illustrates how this stochastic modeling framework could be used to quantify the value of limiting methane emissions from natural gas production

woody biomass energy potential in 2050 abstract from a biophysical perspective woody biomass resources are large enough to cover a substantial share of the world s primary energy consumption in 2050 however these resources have alternative uses and their accessibility is limited which tends to decrease their competitiveness with respect to other forms of energy hence the key question of woody biomass use for energy is not the amount of resources but rather their price in this study we consider the question from the perspective of energy wood supply curves which display the available amount of woody biomass for large scale energy production at various hypothetical energy wood prices these curves are estimated by the global biosphere management model globiom which is a global partial equilibrium model of forest and agricultural sectors the global energy wood supply is estimated to be 0 23 gm 3 year 0 165 ej year when energy wood prices vary in a range of 0 30 gj 0 216 m 3 if we add household fuelwood to energy wood then woody biomass could satisfy 2 18 of world primary energy consumption in 2050 if primary forests are excluded from wood supply then the potential decreases up to 25

land requirements feedstock haul distance and expected profit response to land use restrictions for switchgrass production abstract energy crop production has been proposed for land of poor quality to avoid competition with food production and negative indirect land use consequences the objective of this study was to determine the land area requirements biomass transportation distance and expected profit consequences of restricting switchgrass biomass production for use as biofuel feedstock to marginal land relative to unrestricted land use the usa soils capability classification system was used to differentiate between high quality land and land of marginal quality fifty years of historical weather data were used in combination with a biophysical simulation model to estimate switchgrass biomass yield distributions for land of different quality for counties in the case study region a mathematical programming model was designed and solved to determine the economic consequences for the levels of biofuel price considered 0 50 0 75 and 1 00 l and a 262 5 m l year biorefinery modeled restricting land use to marginally productive capability class iv soils increases the quantity of land optimally leased by 42 to 52 increases biomass trucking total transportation distance by 115 to 116 and reduces the expected net returns by 11 to 15 m year compared to when land use is unrestricted in the absence of government restrictions for profit companies are not likely to limit energy crop production to land of marginal quality

margin exceedences for european stock index futures using extreme value theory abstract futures exchanges require a margin requirement that ensures their competitiveness and protects against default risk this paper applies extreme value theory in computing unconditional optimal margin levels for a selection of stock index futures traded on european exchanges the theoretical framework focuses explicitly on tail returns thereby properly accounting for large levels of risk in measuring prudent margin levels the paper finds that common margin requirements are sufficient for each contract with the exception of the norwegian obx index in providing equitable costs for traders in addition the paper shows the underestimation bias in margin levels that are calculated assuming normality differing margin requirements reflect the unconditional and conditional trading environments