Pub Date : 2024-09-26DOI: 10.1016/j.eneco.2024.107938
Yangyi Lin , Adrian (Wai Kong) Cheung
Extreme weather has become a severe threat to humanity today, with a major blow to energy systems. Energy transformation has become a significant trend in global development, and China has the responsibility and obligation to combat climate change. This paper examines the impact of climate policy uncertainty on energy transformation in China at prefecture-level cities level. A new climate policy uncertainty index and a new measure of energy transition are proposed. The results indicate that climate policy uncertainty has a negative impact on the energy transition. The result still holds after a series of robustness tests. Further analysis shows that the adverse impact of climate policy uncertainty on the energy transition weakens with more proactive government behavior and greater public environmental concerns. For cities that are economically underdeveloped, non-resource oriented and officials’ promotion pressure mounting, the disincentive to energy transition is greater when climate policy uncertainty rises.
{"title":"Climate policy uncertainty and energy transition: Evidence from prefecture-level cities in China","authors":"Yangyi Lin , Adrian (Wai Kong) Cheung","doi":"10.1016/j.eneco.2024.107938","DOIUrl":"10.1016/j.eneco.2024.107938","url":null,"abstract":"<div><div>Extreme weather has become a severe threat to humanity today, with a major blow to energy systems. Energy transformation has become a significant trend in global development, and China has the responsibility and obligation to combat climate change. This paper examines the impact of climate policy uncertainty on energy transformation in China at prefecture-level cities level. A new climate policy uncertainty index and a new measure of energy transition are proposed. The results indicate that climate policy uncertainty has a negative impact on the energy transition. The result still holds after a series of robustness tests. Further analysis shows that the adverse impact of climate policy uncertainty on the energy transition weakens with more proactive government behavior and greater public environmental concerns. For cities that are economically underdeveloped, non-resource oriented and officials’ promotion pressure mounting, the disincentive to energy transition is greater when climate policy uncertainty rises.</div></div>","PeriodicalId":11665,"journal":{"name":"Energy Economics","volume":"139 ","pages":"Article 107938"},"PeriodicalIF":13.6,"publicationDate":"2024-09-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142356802","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-09-25DOI: 10.1016/j.eneco.2024.107926
Zhiying Zhao , Yanfei Lan , Shuxian Xu , Hongyang Zou , Huibin Du
The intermittency and volatility of renewable electricity pose challenges to supply reliability, which is not conducive to renewable energy consumption. To ensure a reliable electricity supply, more governments implement subsidy policies to promote the adoption of innovative technologies by renewable energy producers to enhance supply reliability. We compare two types of subsidies provided by a government: investment subsidy (IS) policy, which is implemented in the deployment stage to directly reduce improvement costs, and operational subsidy (OS) policy, which is implemented in the operational stage to increase the renewable energy producer’s marginal returns. First, we show that without government intervention, customers’ low green consciousness or higher improvement costs may prevent the renewable energy producer from enhancing supply reliability. Second, through a comprehensive comparison, we find that both subsidy policies can incentivize the renewable energy producer to improve supply reliability when customers are more green-conscious, and the improvement cost is high. However, the OS policy and the IS policy operate on different mechanisms: the IS policy can directly alleviate the improvement cost burden on the renewable energy producer, while the OS policy serves a dual role of increasing the renewable energy producer’s marginal operational profit and expanding the market demand for renewable electricity. When customers’ green consciousness is low, the government can only choose whether or not to implement the OS policy. Finally, we highlight that the implementation of the IS policy by the government may not be more beneficial to both the renewable energy producer and customers compared to the OS policy. This result informs regulators that energy security should be considered when designing subsidy policies and should not be limited to promoting the interests of participants.
可再生能源电力的间歇性和波动性给供电可靠性带来了挑战，不利于可再生能源的消费。为了确保可靠的电力供应，越来越多的政府实施补贴政策，促进可再生能源生产商采用创新技术，以提高供电可靠性。我们比较了政府提供的两种补贴：一种是投资补贴政策（IS），在部署阶段实施，直接降低改进成本；另一种是运营补贴政策（OS），在运营阶段实施，提高可再生能源生产商的边际收益。首先，我们表明，如果没有政府干预，客户的低绿色意识或较高的改进成本可能会阻碍可再生能源生产商提高供电可靠性。其次，通过综合比较，我们发现当客户的绿色意识较强、改善成本较高时，两种补贴政策都能激励可再生能源生产商提高供电可靠性。但是，OS 政策和 IS 政策的运行机制不同：IS 政策可以直接减轻可再生能源生产商的改善成本负担，而 OS 政策则具有增加可再生能源生产商边际运营利润和扩大可再生能源电力市场需求的双重作用。当用户的绿色意识较低时，政府只能选择是否实施操作系统政策。最后，我们强调，与操作系统政策相比，政府实施 IS 政策对可再生能源生产商和客户都未必更有利。这一结果告诉监管机构，在设计补贴政策时应考虑能源安全，而不应仅限于促进参与者的利益。
{"title":"Addressing the reliability challenge: Subsidy policies for promoting renewable electricity consumption","authors":"Zhiying Zhao , Yanfei Lan , Shuxian Xu , Hongyang Zou , Huibin Du","doi":"10.1016/j.eneco.2024.107926","DOIUrl":"10.1016/j.eneco.2024.107926","url":null,"abstract":"<div><div>The intermittency and volatility of renewable electricity pose challenges to supply reliability, which is not conducive to renewable energy consumption. To ensure a reliable electricity supply, more governments implement subsidy policies to promote the adoption of innovative technologies by renewable energy producers to enhance supply reliability. We compare two types of subsidies provided by a government: investment subsidy (IS) policy, which is implemented in the deployment stage to directly reduce improvement costs, and operational subsidy (OS) policy, which is implemented in the operational stage to increase the renewable energy producer’s marginal returns. First, we show that without government intervention, customers’ low green consciousness or higher improvement costs may prevent the renewable energy producer from enhancing supply reliability. Second, through a comprehensive comparison, we find that both subsidy policies can incentivize the renewable energy producer to improve supply reliability when customers are more green-conscious, and the improvement cost is high. However, the OS policy and the IS policy operate on different mechanisms: the IS policy can directly alleviate the improvement cost burden on the renewable energy producer, while the OS policy serves a dual role of increasing the renewable energy producer’s marginal operational profit and expanding the market demand for renewable electricity. When customers’ green consciousness is low, the government can only choose whether or not to implement the OS policy. Finally, we highlight that the implementation of the IS policy by the government may not be more beneficial to both the renewable energy producer and customers compared to the OS policy. This result informs regulators that energy security should be considered when designing subsidy policies and should not be limited to promoting the interests of participants.</div></div>","PeriodicalId":11665,"journal":{"name":"Energy Economics","volume":"139 ","pages":"Article 107926"},"PeriodicalIF":13.6,"publicationDate":"2024-09-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142420847","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-09-25DOI: 10.1016/j.eneco.2024.107937
Walid Ben Omrane , Samir Saadi , Tanseli Savaser
We examine the effects of energy usage on the return, volatility and jump processes in the Bitcoin (BTC) and Ethereum (ETH) markets. Our main finding indicates that while BTC returns respond significantly to changes in electricity consumption, the effect of electricity consumption on ETH returns is negligible. We attribute this discrepancy to BTC's relative energy inefficiency, which contrasts with ETH's commitment to transitioning to a more energy-efficient mining protocol over our sample period. Additionally, we show that the effect of electricity consumption on cryptocurrencies is mitigated by media coverage and policy uncertainty regarding the state of the economy, environment, and cryptocurrency markets. Our results suggest that when trading cryptocurrencies, investors consider their relative energy efficiency and price electricity consumption differently, highlighting the influence of the transition towards more sustainable energy practices on investor preferences and investment decisions in cryptocurrency markets.
我们研究了能源使用对比特币（BTC）和以太坊（ETH）市场回报率、波动率和跳跃过程的影响。我们的主要研究结果表明，虽然 BTC 的回报率对电力消耗的变化有显著的反应，但电力消耗对 ETH 回报率的影响却可以忽略不计。我们将这一差异归因于 BTC 相对较低的能效，而 ETH 在样本期内致力于向能效更高的挖矿协议过渡。此外，我们还表明，媒体报道以及有关经济、环境和加密货币市场状况的政策不确定性减轻了电力消耗对加密货币的影响。我们的研究结果表明，在交易加密货币时，投资者会考虑其相对能源效率，并对电力消耗进行不同的定价，这凸显了向更可持续的能源实践过渡对加密货币市场投资者偏好和投资决策的影响。
{"title":"Sustainable energy practices and cryptocurrency market behavior","authors":"Walid Ben Omrane , Samir Saadi , Tanseli Savaser","doi":"10.1016/j.eneco.2024.107937","DOIUrl":"10.1016/j.eneco.2024.107937","url":null,"abstract":"<div><div>We examine the effects of energy usage on the return, volatility and jump processes in the Bitcoin (BTC) and Ethereum (ETH) markets. Our main finding indicates that while BTC returns respond significantly to changes in electricity consumption, the effect of electricity consumption on ETH returns is negligible. We attribute this discrepancy to BTC's relative energy inefficiency, which contrasts with ETH's commitment to transitioning to a more energy-efficient mining protocol over our sample period. Additionally, we show that the effect of electricity consumption on cryptocurrencies is mitigated by media coverage and policy uncertainty regarding the state of the economy, environment, and cryptocurrency markets. Our results suggest that when trading cryptocurrencies, investors consider their relative energy efficiency and price electricity consumption differently, highlighting the influence of the transition towards more sustainable energy practices on investor preferences and investment decisions in cryptocurrency markets.</div></div>","PeriodicalId":11665,"journal":{"name":"Energy Economics","volume":"139 ","pages":"Article 107937"},"PeriodicalIF":13.6,"publicationDate":"2024-09-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142421039","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-09-24DOI: 10.1016/j.eneco.2024.107925
Ayotola Owolabi, Mohammad Mahdi Mousavi, Giray Gozgor, Jing Li
The Paris Agreement, signed in 2015, sets ambitious goals for diminishing greenhouse gas emissions and restricting the rise in global temperature to achieve a less carbon-intensive and climate-resilient global economy. The Paris Agreement marked a defining moment in the worldwide response to global warming and has significantly affected the financial sector. Given this background, this research explores the effects of carbon risk on the cost of debt (CoD) in 1428 listed firms across seven economies from 2011 to 2020. The paper also reflects the post-Paris Agreement's involvement and the ESG factors' moderating effect in the empirical models. The study finds a significant impact of carbon risk on CoD following the implementation of the Paris Agreement. Notably, companies with higher carbon risk face higher borrowing rates. However, the effect of ESG on moderating the relationship between carbon risk and CoD is found to be insignificant. Further analyses confirm this finding, as individual pillars of ESG (governance and social aspects) also show insignificant moderating effects.
{"title":"The impact of carbon risk on the cost of debt in the listed firms in G7 economies: The role of the Paris agreement","authors":"Ayotola Owolabi, Mohammad Mahdi Mousavi, Giray Gozgor, Jing Li","doi":"10.1016/j.eneco.2024.107925","DOIUrl":"10.1016/j.eneco.2024.107925","url":null,"abstract":"<div><div>The Paris Agreement, signed in 2015, sets ambitious goals for diminishing greenhouse gas emissions and restricting the rise in global temperature to achieve a less carbon-intensive and climate-resilient global economy. The Paris Agreement marked a defining moment in the worldwide response to global warming and has significantly affected the financial sector. Given this background, this research explores the effects of carbon risk on the cost of debt (CoD) in 1428 listed firms across seven economies from 2011 to 2020. The paper also reflects the post-Paris Agreement's involvement and the ESG factors' moderating effect in the empirical models. The study finds a significant impact of carbon risk on CoD following the implementation of the Paris Agreement. Notably, companies with higher carbon risk face higher borrowing rates. However, the effect of ESG on moderating the relationship between carbon risk and CoD is found to be insignificant. Further analyses confirm this finding, as individual pillars of ESG (governance and social aspects) also show insignificant moderating effects.</div></div>","PeriodicalId":11665,"journal":{"name":"Energy Economics","volume":"139 ","pages":"Article 107925"},"PeriodicalIF":13.6,"publicationDate":"2024-09-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142420855","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-09-24DOI: 10.1016/j.eneco.2024.107935
Xiaosheng Li , Ruirui Wang , Zhiyang Shen , Malin Song
To optimize the implementation of environmental policies and foster green development in China's economy, it is crucial to be vigilant about corporate pollution transfer behaviors and regulate collusive relationships between local governments and enterprises. This study introduces a theoretical four-way game model to explore the impact of corporate pollution transfer, considering environmental regulation by the central government and third-party oversight, as well as collusion between local governments and firms. Using data from China's A-share listed companies from 2007 to 2021, this study examines whether polluting firms engage in pollution transfer in response to environmental policies, with the Low-carbon City Pilot Policy (LCPP) serving as a proxy for government environmental signals. The findings reveal that the LCPP generally affects corporate pollution transfer. Mechanism analysis shows that the LCPP reduces pollution transfer through both formal and informal regulatory channels. Heterogeneity analysis further indicates that the pollution transfer effect is more pronounced in local state-owned enterprises, companies with a history of financial fraud, and highly polluting industries. Additionally, the study highlights that collusion between the government and enterprises promotes corporate pollution transfer, while changes in local government personnel disrupt this collusion and reduce pollution transfer. The research also identifies the supply chain as a key transmission path for pollution transfer. This work not only advances theoretical and empirical understanding of corporate behavior under environmental policy influence but also enriches research on government-enterprise relations and the effectiveness of environmental policies. It offers theoretical support and policy recommendations for constructing a rational green economic development system in China.
要优化环境政策的实施，促进中国经济的绿色发展，关键是要警惕企业污染转移行为，规范地方政府与企业之间的合谋关系。本研究引入了一个四向博弈理论模型来探讨企业污染转移的影响，考虑了中央政府的环境监管和第三方监督，以及地方政府和企业之间的合谋关系。本研究利用 2007 年至 2021 年中国 A 股上市公司的数据，以低碳城市试点政策（LCPP）作为政府环境信号的代理变量，考察了污染企业是否因环境政策而进行污染转移。研究结果表明，低碳城市试点政策总体上影响了企业的污染转移。机制分析表明，LCPP 通过正式和非正式监管渠道减少了污染转移。异质性分析进一步表明，污染转移效应在地方国有企业、有财务欺诈历史的公司和高污染行业中更为明显。此外，研究还强调，政府与企业之间的勾结会促进企业的污染转移，而地方政府人员的变动则会破坏这种勾结并减少污染转移。研究还发现供应链是污染转移的关键传播途径。这项研究不仅推进了对环境政策影响下企业行为的理论和实证理解，还丰富了对政企关系和环境政策有效性的研究。它为中国构建合理的绿色经济发展体系提供了理论支持和政策建议。
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Pub Date : 2024-09-24DOI: 10.1016/j.eneco.2024.107928
Yanni Jiang , Debin Fang , Leyao Lei
Adverse selection problem due to asymmetry of consumer environmental awareness (CEA) could reduce electricity retailer's profit and obstructs renewable energy (RE) consumption. This study analyzes mechanism design problem of retailer constricted by RE consumption quota to incentive consumers display true CEA in competitive retail market. Based on principal-agent theory, we develop an extended principal-agent model with the addition of an RE consumption quota constraint to design a green electricity product menu which includes the green level, the price and electric quantity. Influence of information symmetry and quota setting on product attributes, retailer's profit, consumer utility, RE consumption is analyzed, and results show that: (1) Compare to symmetric information, under asymmetric information, green level of product provided to consumers with CEA (denoted as C1) distorts upward, information rent is greater than zero when quota is large, while green level of product provided to consumers without CEA (denoted as C2) distorts downward, with no information rent. (2) Under asymmetric information, unit environmental premium (UEP) of green electricity positively relates to proportion of C1, CEA level, and incremental WTP, and reaches the maximum value at a certain quota. (3) Under asymmetric information, retailer's profit and RE consumption positively relates to proportion of C1, and CEA level. (4) Under asymmetric information, quota difference could contribute to improve retail service quality under competitive retail market, and RE consumption elevation.
消费者环境意识（CEA）不对称导致的逆向选择问题会降低电力零售商的利润，阻碍可再生能源（RE）消费。本研究分析了零售商受可再生能源消费配额限制的机制设计问题，以激励消费者在竞争性零售市场中展现真正的 CEA。基于委托代理理论，我们建立了一个扩展的委托代理模型，并加入了可再生能源消费配额约束，以设计一个包括绿色水平、价格和电量在内的绿色电力产品菜单。分析了信息对称和配额设置对产品属性、零售商利润、消费者效用、可再生能源消费的影响，结果表明(1）与信息对称相比，在信息不对称条件下，当配额较大时，提供给有 CEA 消费者的产品绿色水平（记为 C1）向上扭曲，信息租金大于零，而提供给无 CEA 消费者的产品绿色水平（记为 C2）向下扭曲，没有信息租金。(2）在信息不对称条件下，绿色电力的单位环境溢价（UEP）与 C1 比例、CEA 水平和增量 WTP 正相关，并在一定配额下达到最大值。(3) 在信息不对称的情况下，零售商的利润和可再生能源消费量与 C1 比例和 CEA 水平正相关。(4) 在信息不对称的情况下，配额差异有助于提高竞争性零售市场的零售服务质量和可再生能源消费量。
{"title":"Green electricity product menu design for retailers without knowing consumer environmental awareness","authors":"Yanni Jiang , Debin Fang , Leyao Lei","doi":"10.1016/j.eneco.2024.107928","DOIUrl":"10.1016/j.eneco.2024.107928","url":null,"abstract":"<div><div>Adverse selection problem due to asymmetry of consumer environmental awareness (CEA) could reduce electricity retailer's profit and obstructs renewable energy (RE) consumption. This study analyzes mechanism design problem of retailer constricted by RE consumption quota to incentive consumers display true CEA in competitive retail market. Based on principal-agent theory, we develop an extended principal-agent model with the addition of an RE consumption quota constraint to design a green electricity product menu which includes the green level, the price and electric quantity. Influence of information symmetry and quota setting on product attributes, retailer's profit, consumer utility, RE consumption is analyzed, and results show that: (1) Compare to symmetric information, under asymmetric information, green level of product provided to consumers with CEA (denoted as C1) distorts upward, information rent is greater than zero when quota is large, while green level of product provided to consumers without CEA (denoted as C2) distorts downward, with no information rent. (2) Under asymmetric information, unit environmental premium (UEP) of green electricity positively relates to proportion of C1, CEA level, and incremental WTP, and reaches the maximum value at a certain quota. (3) Under asymmetric information, retailer's profit and RE consumption positively relates to proportion of C1, and CEA level. (4) Under asymmetric information, quota difference could contribute to improve retail service quality under competitive retail market, and RE consumption elevation.</div></div>","PeriodicalId":11665,"journal":{"name":"Energy Economics","volume":"139 ","pages":"Article 107928"},"PeriodicalIF":13.6,"publicationDate":"2024-09-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142420848","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-09-24DOI: 10.1016/j.eneco.2024.107932
Xiaoli Hao , Qingyu Sun , Ke Li , Peilun Li , Haitao Wu
Environmental management systems are essential for promoting sustainable development. Rational distribution of environmental management responsibilities among governmental entities is a fundamental requirement and institutional framework. China's Direct Reporting of Environmental Statistics for National Key Supervision Enterprises (DRES) policy is a reform initiative that is intended to recalibrate environmental decentralisation to intensify environmental oversight. Using manually-collected data from key A-share listed companies from 2009 to 2021, this study employs a difference-in-differences model to evaluate the impact of the DRES policy on corporate environmental, social and governance (ESG) performance. The main findings are as fourfold. (1) The DRES policy significantly enhances corporate ESG performance. (2) Regarding policy transmission pathways, it empowers enterprises to systematically improve their ESG performance through concept, terminal, source and voluntary governance. (3) Heterogeneity analysis reveals that the policy's efficacy is particularly pronounced in resource-based regions, among enterprises with low managerial myopia and limited analyst attention and within non-state-owned enterprises. (4) Economic consequence testing indicates that enterprises' improved ESG performance can enhance total factor productivity but concurrently increases enterprises' risk. Finally, the study proposes corresponding policy recommendations such as improving the incentive and restraint mechanisms of environmental management and implementing differentiated environmental governance strategies.
{"title":"Does environmental decentralisation improve ESG performance? Evidence from listed companies in China","authors":"Xiaoli Hao , Qingyu Sun , Ke Li , Peilun Li , Haitao Wu","doi":"10.1016/j.eneco.2024.107932","DOIUrl":"10.1016/j.eneco.2024.107932","url":null,"abstract":"<div><div>Environmental management systems are essential for promoting sustainable development. Rational distribution of environmental management responsibilities among governmental entities is a fundamental requirement and institutional framework. China's Direct Reporting of Environmental Statistics for National Key Supervision Enterprises (DRES) policy is a reform initiative that is intended to recalibrate environmental decentralisation to intensify environmental oversight. Using manually-collected data from key A-share listed companies from 2009 to 2021, this study employs a difference-in-differences model to evaluate the impact of the DRES policy on corporate environmental, social and governance (ESG) performance. The main findings are as fourfold. (1) The DRES policy significantly enhances corporate ESG performance. (2) Regarding policy transmission pathways, it empowers enterprises to systematically improve their ESG performance through concept, terminal, source and voluntary governance. (3) Heterogeneity analysis reveals that the policy's efficacy is particularly pronounced in resource-based regions, among enterprises with low managerial myopia and limited analyst attention and within non-state-owned enterprises. (4) Economic consequence testing indicates that enterprises' improved ESG performance can enhance total factor productivity but concurrently increases enterprises' risk. Finally, the study proposes corresponding policy recommendations such as improving the incentive and restraint mechanisms of environmental management and implementing differentiated environmental governance strategies.</div></div>","PeriodicalId":11665,"journal":{"name":"Energy Economics","volume":"139 ","pages":"Article 107932"},"PeriodicalIF":13.6,"publicationDate":"2024-09-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142356801","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We explain agents' trading behaviors and market outcomes in the presence of endowment effects intensified by expectations-based loss aversion in carbon cap and trade. Building on Kőszegi and Rabin (2006)’s model with forward-looking reference points, we show how firms' concerns about high future compliance costs (through loss aversion and uncertainty) can cause a gap between Willingness-to-Pay and Willingness-to-Accept for allowances. This leads to limited allowance trading and deviation from the socially desirable paths. The problem can be exacerbated under a substantial proportion of free allocation, a fixed (or inflexible) cap as well as uncertain regulatory ambitions, particularly in emerging economies under a variety of uncertainty. Recognizing the regulator's role in dealing with firms' expectations (or concerns) and facilitating innovation investments, we discuss potential alternative systems (e.g., with auction and flexible supply) for decarbonization that incorporate flexibility in terms of innovation timing and realized costs.
{"title":"Endowment effects, expectations, and trading behavior in carbon cap and trade","authors":"Beomseok Yoon , Mateusz Filipski , Craig E. Landry , Seung Jick Yoo","doi":"10.1016/j.eneco.2024.107927","DOIUrl":"10.1016/j.eneco.2024.107927","url":null,"abstract":"<div><div>We explain agents' trading behaviors and market outcomes in the presence of endowment effects intensified by expectations-based loss aversion in carbon cap and trade. Building on Kőszegi and Rabin (2006)’s model with forward-looking reference points, we show how firms' concerns about high future compliance costs (through loss aversion and uncertainty) can cause a gap between Willingness-to-Pay and Willingness-to-Accept for allowances. This leads to limited allowance trading and deviation from the socially desirable paths. The problem can be exacerbated under a substantial proportion of free allocation, a fixed (or inflexible) cap as well as uncertain regulatory ambitions, particularly in emerging economies under a variety of uncertainty. Recognizing the regulator's role in dealing with firms' expectations (or concerns) and facilitating innovation investments, we discuss potential alternative systems (e.g., with auction and flexible supply) for decarbonization that incorporate flexibility in terms of innovation timing and realized costs.</div></div>","PeriodicalId":11665,"journal":{"name":"Energy Economics","volume":"139 ","pages":"Article 107927"},"PeriodicalIF":13.6,"publicationDate":"2024-09-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142420897","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-09-21DOI: 10.1016/j.eneco.2024.107918
Mingming Zhang , Weijia Zheng , Chien-Chiang Lee
Using data from 77 listed renewable energy enterprises in China and the threshold effect model, this study investigates the impact of political connections on the investment efficiencies of renewable energy enterprises at different degrees of marketization. A Richardson residual measurement model is applied to measure this efficiency. Further, this study constructs a cash flow sensitivity model to analyze how the political connections affect investment efficiency through financing factors and then analyzes the four external financing channels using a path analysis. The results show that when the degree of marketization is less than 9.280, political connections can improve investment efficiency. When the degree of marketization exceeds 9.280, the influence of political connections on investment efficiency is statistically insignificant. At a low marketization stage, political connections enhance the ability of enterprises to acquire resources through four kinds of external financing channels: bank credit, corporate bonds, commercial credit, and equity financing. This supports investment efficiency by reducing cash flow sensitivity. Due to the differences in the nature of the enterprises and personnel appointments, non-state-owned renewable energy enterprises with political connections experience more significant differences with respect to the impact on investment efficiency under different marketization levels.
{"title":"Political connections and investment efficiency of renewable energy enterprises: The role of marketization","authors":"Mingming Zhang , Weijia Zheng , Chien-Chiang Lee","doi":"10.1016/j.eneco.2024.107918","DOIUrl":"10.1016/j.eneco.2024.107918","url":null,"abstract":"<div><div>Using data from 77 listed renewable energy enterprises in China and the threshold effect model, this study investigates the impact of political connections on the investment efficiencies of renewable energy enterprises at different degrees of marketization. A Richardson residual measurement model is applied to measure this efficiency. Further, this study constructs a cash flow sensitivity model to analyze how the political connections affect investment efficiency through financing factors and then analyzes the four external financing channels using a path analysis. The results show that when the degree of marketization is less than 9.280, political connections can improve investment efficiency. When the degree of marketization exceeds 9.280, the influence of political connections on investment efficiency is statistically insignificant. At a low marketization stage, political connections enhance the ability of enterprises to acquire resources through four kinds of external financing channels: bank credit, corporate bonds, commercial credit, and equity financing. This supports investment efficiency by reducing cash flow sensitivity. Due to the differences in the nature of the enterprises and personnel appointments, non-state-owned renewable energy enterprises with political connections experience more significant differences with respect to the impact on investment efficiency under different marketization levels.</div></div>","PeriodicalId":11665,"journal":{"name":"Energy Economics","volume":"139 ","pages":"Article 107918"},"PeriodicalIF":13.6,"publicationDate":"2024-09-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142322850","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-09-20DOI: 10.1016/j.eneco.2024.107879
Yue Zhao , Adria E. Brooks , Xiaodong Du
In our study, we analyze the nodal price responses to Hurricane Harvey in the Texas wholesale electricity market, treating the event as a natural experiment. Using a network matrix and synthetic control method, we find that the most significant price impacts occurred in southern Texas, particularly in nodes that were connected to fewer other nodes and were electrically closer to the most damaged parts of the network. This finding highlights the importance of adopting an electric network-oriented perspective when examining the impacts of external shocks on the wholesale electricity market. Furthermore, our study reveals that counties with inferior economic conditions and frequent exposure to hurricanes experienced more substantial economic losses due to electricity price spikes. Therefore, enhancing electric infrastructure and disaster preparedness in those regions is crucial for policy considerations.
{"title":"Electricity market resilience in the face of Hurricane Harvey: A network-oriented approach","authors":"Yue Zhao , Adria E. Brooks , Xiaodong Du","doi":"10.1016/j.eneco.2024.107879","DOIUrl":"10.1016/j.eneco.2024.107879","url":null,"abstract":"<div><div>In our study, we analyze the nodal price responses to Hurricane Harvey in the Texas wholesale electricity market, treating the event as a natural experiment. Using a network matrix and synthetic control method, we find that the most significant price impacts occurred in southern Texas, particularly in nodes that were connected to fewer other nodes and were electrically closer to the most damaged parts of the network. This finding highlights the importance of adopting an electric network-oriented perspective when examining the impacts of external shocks on the wholesale electricity market. Furthermore, our study reveals that counties with inferior economic conditions and frequent exposure to hurricanes experienced more substantial economic losses due to electricity price spikes. Therefore, enhancing electric infrastructure and disaster preparedness in those regions is crucial for policy considerations.</div></div>","PeriodicalId":11665,"journal":{"name":"Energy Economics","volume":"139 ","pages":"Article 107879"},"PeriodicalIF":13.6,"publicationDate":"2024-09-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142315355","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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