This paper reviews the methodology and methods behind IEA’s World Energy Outlook (WEO) and offers a critical assessment of key assumptions and projections, focusing in particular on energy and the macro economy, technological change, and investment in new renewable energy. I argue that IEA’s World Energy Outlook suffers from a status quo bias in favor…
Author: admin
Carbon Pricing and Cross-Border Electricity Trading for Climate Change Mitigation in South Asia
South Asia’s electricity supply system is quite carbon-intensive, particularly due to extensive use of coal. Under “business as usual,” that situation is expected to continue for several decades. Using an electricity system planning model, this study investigates two complementary strategies to reduce CO2 emission intensity of the power sector in South Asia: carbon pricing, and…
The Ephemeral Brent Geopolitical Risk Premium
We study the changing relationship between Brent oil prices and geopolitical risk, conditional on physical oil market conditions. We conduct the analysis at three frequencies, medium (1-3 years), high (2-3 months), and very high (daily), using three complementary techniques at the different levels (respectively, continuous wavelet partial coherence, VAR and GARCH-MIDAS) over the period April…
Interactions between Market Reform and a Carbon Price in China’s Power Sector
The electricity sector accounts for a large share of China’s carbon dioxide emissions and of the economy-wide abatement potential. China’s planned national emissions trading scheme would include electricity generation, as nearly all emissions trading schemes do. The critical difference is that in most existing carbon pricing systems the power sector operates with competitive markets and…
The Value of Saving Oil in Saudi Arabia
Saudi Arabia has one of the highest levels of per capita oil consumption in the world, but attempts are now being made by Saudi policymakers to significantly reduce this. Thus, a relevant policy question is what is the value of saving a barrel of oil in Saudi Arabia? The instinctive answer is that the value…
An Option Analysis of the European Union Renewable Energy Support Mechanisms
We examine the economic efficiency of incentive mechanisms used to promote Renewable Energy (RE) across the European Union (EU) by looking at returns to investors along with any negative externalities or social costs. Using electricity price data from 2009 to 2013, we evaluate the RE support mechanisms adopted by some of the largest EU economies….
Aiming for Carbon Neutrality: Which Environmental Taxes Does Spain Need by 2030?
The Green Deal is a new European strategic plan aiming to achieve carbon neutrality in 2050 with a 55%-reduction in emissions by 2030 as an intermediate target. In the next three decades European policymakers will use a wide set of policy levers to achieve these targets, including taxes on fossil fuels and carbon prices. In…
Do Sustainable Operations through Energy Effectiveness Reduce Cost of Debt in Medium and High-tech Industries? Evidence from an Emerging Economy
Access to low-cost finance is a significant factor influencing firms’ investment decisions in research and development, which is crucial for corporate success. The goal becomes critical when the firm’s sustainability policy channels energy consumption, resulting in optimal capital allocation for new, resource-efficient technologies. Despite its significant relevance in policymaking, there has been little academic study…
New Transactions in Electricity: Peer-to-Peer and Peer-to-X
Peer-to-peer and peer-to-x open a new world of transactions in the electricity sector. This world is characterised by the active involvement of new players, both small in size and non-professional in nature, and by new combinations of the activities carried out behind and in front of the meter. Peer-to-peer refers to transactions in which both…
Are Credit Rating Agencies Punishing Petrostates for Energy Transition Risks?
The energy transition is expected to leave fossil fuel producers with weakened economies and stranded assets, but the time horizon of these effects is uncertain. This article offers a window into these effects by studying the sovereign credit ratings of petrostates. Credit ratings are both forward-looking indicators of their economic outlook and determinants of petrostates’…