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Domestic Energy: A Forgotten Factor in Simple Energy-Economy Models

Stephen C. Peck and John L. Solow

Year: 1982
Volume: Volume 3
Number: Number 3
DOI: 10.5547/ISSN0195-6574-EJ-Vol3-No3-3
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Abstract:
This paper focuses on the impacts of changes in world energy prices on an energy-importing economy such as the United States. To this end, we use a simple energy-economy model developed by Sweeney [7] and having affinities to the earlier work of Hogan and Manne [5]. This model takes explicit account of the fact that the U.S. energy sector is linked to the rest of the world and that the United States is a net importer of energy. Comparative static analysis of this model enables us to pinpoint the most important parameters in the determination of relative price effects on the domestic economy. We show that the presence of energy consumption taxes and energy production subsidies does not affect the impacts of changes in world energy prices on national output.



The Role of Emission Trading in Domestic Climate Policy

Michael Hanemann

Year: 2009
Volume: Volume 30
Number: Special Issue #2
DOI: 10.5547/ISSN0195-6574-EJ-Vol30-NoSI2-5
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Abstract:
This paper focuses on two specific issues in the design of a domestic cap and trade program for GHGs � whether the cap should be located upstream or downstream, and whether trading alone will suffice to achieve the desired reduction in GHGs or will need to be supplemented with additional regulatory measures. The paper argues for a downstream cap accompanied by measures such as a renewable portfolio standard, efficiency standards for vehicles, appliances and buildings, and a low carbon fuel standard. For this argument, it is necessary to address both the theory and the empirical evidence of emission trading. After reviewing the theory, the paper examines the actual experience in the U.S. with emission trading for SO2, to see whether the assumptions used in the theory actually applied in practice. What actually happened deviated in several important respects from what was supposed to happen according to the conventional theorizing. The design of a cap and trade program for GHG is then discussed, first considering the similarities between the past regulation of air pollutants and the challenge posed by GHGs, and then making the case for a downstream cap and complementary policies.



Stochastic Trends and Technical Change: The Case of Energy Consumption in the British Industrial and Domestic Sectors

Paolo Agnolucci

Year: 2010
Volume: Volume 31
Number: Number 4
DOI: 10.5547/ISSN0195-6574-EJ-Vol31-No4-5
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Abstract:
This paper estimates energy demand in the British domestic and indus�trial sectors and analyzes the extent to which energy-saving technological change is exogenous, or induced by the energy price. The paper implements models with a linear trend, models making use of the price decomposition of Dargay and Gately (1995a) and the Structural Time Series Models (STSMs) of Harvey (1989). Stochastic trends have been found to be rather important while in neither of the sectors assessed in this study could the hypothesis of symmetric price effects be rejected. Following Hunt and Judge (2005), stochastic trend and asymmetric price effects are found to be substitutes in the industrial sector. In particular we con�clude that asymmetric price effects can substitute for the slope in the stochastic trend. Finally, energy consumption in the industrial sector is strongly in.uenced by price while the effect of price in the domestic sector is markedly smaller.



China’s Natural Gas Demand Projections and Supply Capacity Analysis in 2030

Qiang Ji, Ying Fan, Mike Troilo, Ronald D. Ripple, and Lianyong Feng

Year: 2018
Volume: Volume 39
Number: Number 6
DOI: 10.5547/01956574.39.6.qji
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Abstract:
This paper builds an econometric model to analyze the income elasticity and price elasticities of sectoral natural gas demand and forecasts China's natural gas demand up to 2030. The findings indicate that there is a long-term equilibrium relationship among sectoral natural gas demand, sectoral income and various fuel prices. The results also indicate that most price elasticities are smaller relative to developed countries; the effect of fuel prices on natural gas demand is partly offset by the government regulation. In the Business As Usual (BAU) scenario, China's natural gas demand will reach 340 bcm and 528 bcm and its foreign dependence will reach 27.9% and 43.2% in 2020 and 2030, respectively. The forecast and discussion in this paper provide important insights into China's energy policy design and pricing mechanism reform, and into the potential impact of China's growing natural gas demand on global energy market dynamics.





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