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Energy Journal Issue

The Energy Journal
Volume17, Number 1

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Decomposition of SO2, NO1 and CO2 Emissions from Energy Use of Major Economic Sectors in Taiwan

Sue J. Lin and Tzu C. Chang

DOI: 10.5547/ISSN0195-6574-EJ-Vol17-No1-1View Abstract

In this paper we use the Divisia index approach to decompose emission changes of SO2, NOx and CO2 from major economic sectors in Taiwan during 1980 to 1992. The study highlights the interrelationships between energy use and environmental quality, and provides insights for policy making. The emission changes are decomposed into five components-pollution coefficient, fuel mix, energy intensity, economic growth and industrial structure. Of all components analyzed, economic growth had the largest positive effect on emission changes for Taiwan's major economic sectors. Emissions of SO2 in industry and other sectors showed a decreasing trend due to fuel quality improvements and pollution control. However, NOx and CO2 emissions increased sharply in all sectors. Comparisons were also made with Germany, Japan and USA. This study hay shown that improvement in energy efficiency, pollution control and fuel substitution are major options to reduce SO2, NOx and CO2 emissions.

Forecasting the Demand for Energy in China

Hing Lin Chan and Shu Kam Lee

DOI: 10.5547/ISSN0195-6574-EJ-Vol17-No1-2View Abstract

In this paper we use a cointegration and vector error-correction model to analyze the energy consumption behavior of China. In formulating a model suitable to China, it is found that not only conventional variables such as energy price and income are important, but the share of heavy industry output in the, national income is also a significant factor. With the help of a vector errorcorrection model, we predict that China will need approximately 1.42 billion tons of standard coal equivalent by the end of this century, representing a 44 percent increase compared with 1990.

The Total Cost and Measured Performance of Utility-Sponsored Energy Efficiency Programs

Joseph Eto, Edward Vine, Leslie Shown, Richard Sonnenblick, and Chris Payne

DOI: 10.5547/ISSN0195-6574-EJ-Vol17-No1-3View Abstract

By examining the actual performance of conservation or demand-side management (DSM) programs for ten utilities, Joskow and Marron (1992) have made an important contribution to policy discussions about the wisdom of relying on utilities to improve customer energy efficiency. We use Joskow and Marrons method to analyze twenty utility commercial lighting programs and, like Joskow and Marron, find wide variations in industry reporting practices and savings evaluation methods. We extend the method by systematically accounting for several of the most important sources of variation and comment on how they influence total program costs. Our accounting also allows us to relate remaining program cost variations to the program sizes and the electric supply costs avoided by the programs. We draw qualified, yet affirmative, conclusions regarding the cost effectiveness of the programs.

The Welfare Effects of Raising Household Energy Prices in Poland

Caroline L. Freund and Christine I. Wallich

DOI: 10.5547/ISSN0195-6574-EJ-Vol17-No1-4View Abstract

We examine the welfare effects from increasing household energy prices in Poland. Subsidizing household energy prices, common in the transition economies, is shown to be highly regressive. The wealthy spend a larger portion of their income on energy and consume more energy in absolute terms. We therefore rule out the oft-used social welfare argument for delaying household energy price increases. Raising prices, while targeting relief to the poor through a social assistance program is the first-best response. However, if governments want to ease the adjustment, several options are open, including: in-kind transfers to the poor, vouchers, in-cash transfers, and lifeline pricing for electricity. Our simulations show that if raising prices to efficient levels is not politically feasible at present and social assistance targeting is sufficiently weak, it may be socially better to use lifeline pricing and a large price increase than an overall, but smaller, price increase.

Incorporating Investment Uncertainty into Greenhouse Policy Models

John R. Birge and Charles H. Rosa

DOI: 10.5547/ISSN0195-6574-EJ-Vol17-No1-5View Abstract

Greenhouse gas policy decisions require comprehensive understanding of atmospheric, economic, and social impacts. Many studies have considered the effects of atmospheric uncertainty in global warming, but economic uncertainties, have received Less analysis. We consider a key component of economic uncertainty: the return on investments in new technologies. Using a mathematical! programming model, we show that ignoring uncertainty in technology investment policy may lead to decreases as great as 2 percent in overall expected economic activity in the U.S. with even higher losses in possible future scenarios. These results indicate that both federal and private technology investment policies should be based on models explicitly incorporating uncertainty.

Preserving Natural Environments on Coal Lands at Minimum Cost

William D. Watson

DOI: 10.5547/ISSN0195-6574-EJ-Vol17-No1-6View Abstract

In the U.S., about 67 billion tons of coal (27% of the nation's surface minable coal) have been placed off-limits to surface mining by the Federal Land Policy Management Act and other restrictions in order to protect the environment. By the year 2005, it is projected that this reduction in coal reserves will add about $500 million per year to the nation's energy costs. As set-aside costs grow and the locked-up coal is perceived as progressively more valuable over time, it is likely that pressure will be brought on the U. S. Department of the Interior to revise its resource management plans. As a general rule, a rational management objective is to achieve a given amount of environmental preservation at the lowest cost. This paper provides an analytic framework, namely constrained cost minimization, for implementing that objective. Examples are given for protecting sage grouse and eagle habitat.