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Petroleum Policy and Mexican Domestic Politics: Left Opposition, Regional Dissidence, and Official Apostasy

Edward J. Williams

Year: 1980
Volume: Volume 1
Number: Number 3
DOI: 10.5547/ISSN0195-6574-EJ-Vol1-No3-4
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Abstract:
The impact of the petroleum industry on oil-producing countries has frequently emphasized the intimate interconnection and reciprocal influences of economic and political change. The agony of contemporary Iran is a dramatic example, but only one of many that help prove the point. In Nigeria's recent history, the competition for control of petroleum resources was one factor instigating a brutal civil war. In Venezuela, a new era of constitutional stability flowed from an expanded economic base provided by petroleum export earnings. In the United States, the rise to national prominence of the Texas politicos reflected the economic changes that evolved from petroleum discoveries.



Political Economy Obstacles to Fuel Taxation

Henrik Hammar, Asa Lofgren and Thomas Sterner

Year: 2004
Volume: Volume 25
Number: Number 3
DOI: 10.5547/ISSN0195-6574-EJ-Vol25-No3-1
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Abstract:
Many studies have shown that fuel demand is quite elastic and that the best way to reduce fuel use (to tackle climate issues) is by taxing fuel. Yet it seems almost impossible to do so, particularly in those countries with low prices and high demand. The purpose of this paper is to cast light on the difficulties of raising gasoline taxes by analyzing the determinants of gasoline taxation. We believe that one of the reasons for the difficulties is that political pressure influences the political decisions regarding taxation of gasoline consumption. Not only do low taxes and thus low prices encourage high consumption, but high levels of consumption also lead to considerable pressure against raising the taxes. Our findings also point to the significance of other factors such as government debt (a higher debt leads to a higher gasoline tax rate).



The Political Economy of a Carbon Price Floor for Power Generation

David M. Newbery, David M. Reiner, and Robert A. Ritz

Year: 2019
Volume: Volume 40
Number: Number 1
DOI: 10.5547/01956574.40.1.dnew
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Abstract:
The EU carbon price lies well below estimates of the social cost of carbon and "target-consistent" carbon prices needed to deliver ambitious targets such as the 40% reduction target for 2030. In light of this, the UK introduced a carbon price floor (CPF) for its electricity sector in 2013 and the new Dutch Government has recently made a similar commitment, while successive French Governments have called for an EU-wide CPF. This paper analyzes the impacts and design of a power-sector CPF, both at the EU and national level, using a political-economy approach. We find a good case for introducing such a price-based instrument into the EU ETS. We suggest that a CPF should be designed to "top up" the EUA price to �25-30/tCO2, rising annually at 3-5% above inflation, at least until 2030. We argue that the new EU Market Stability Reserve enhances the value of a CPF in terms of delivering climate benefits, and discuss the potential for a regional CPF in North-West Europe. We also review international policy experience with price floors (and ceilings).



Why Has China Overinvested in Coal Power?

Mengjia Ren, Lee G. Branstetter, Brian K. Kovak, Daniel Erian Armanios, and Jiahai Yuan

Year: 2021
Volume: Volume 42
Number: Number 2
DOI: 10.5547/01956574.42.2.mren
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Abstract:
In spite of ambitious investments by the Chinese government in renewable energy sources, the country�s investment in coal power accelerated in recent years, raising concerns of massive overcapacity and undermining the central policy goal of promoting cleaner energy. In this paper, we ask why this happened, focusing on policies that incentivized excessive entry in the coal power sector and using a simple economic model to illustrate the policies� effects. Using coal-power project approval records from 2013 to 2016, we find the approval rate of coal power was about 3 times higher after approval authority was decentralized, with larger effects in regions producing more coal. We estimate that local coal production accounts for an additional 54GW of approved coal power in 2015 (other things equal), which is about 1/4 of total approved capacity in that year.



Do Foreign Gifts Buy Corporate Political Action? Evidence from the Saudi Crude Discount Program

Jennifer R. Peck

Year: 2021
Volume: Volume 42
Number: Number 3
DOI: 10.5547/01956574.42.3.jpec
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Abstract:
Between 1991 and 2003, Saudi Aramco sold crude to U.S. refineries at a substantial discount, with a total cost of approximately 8.5 billion dollars. This paper assesses the incidence of these discount rents in the U.S. market and yields the first empirical evidence for the use of oil as a tool of political leverage through transfers to American firms. Using panel variation in discount receipts, I find that rents were captured by refiners as profits. Discounts were also associated with increases in refiners� political donations and strategic reallocations of these contributions.



The Rationale for Reforming Utility Business Models

Daniel J. Kopin and Richard G. Vanden Bergh

Year: 2023
Volume: Volume 44
Number: Number 3
DOI: 10.5547/01956574.44.2.dkop
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Abstract:
Economic models assume public utility commissions reform utility business models with revenue decoupling mechanisms primarily to remove the disincentive for demand-side management investment, which is expected to enhance social welfare. This paper tests that widespread assumption. We find some but limited support for commission responsiveness to avoided environmental costs. Instead, we find commission responsiveness to avoided political costs resulting from high prices of residential electricity compared to the regional average and high levels of partisan competition in the state legislature. Beyond questioning the primacy of the public interest rationale for regulation, our results give reason to reevaluate economic models of utility business model reform that do not explicitly consider commission interests in minimizing political risks.





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