• Energy Research

In this note, using the VEC model we attempt to empirically investigate the effects of oil price and monetary shocks on the Russian economy covering the period between 1997:Q1 and 2007:Q4. The analysis leads to the finding that a 1% increase in oil prices contributes to real GDP growth by 0.25% over the next 12 quarters, whereas that to inflation by 0.36% over the corresponding periods. We also find that the monetary shock through interest rate channel immediately affects real GDP and inflation as predicted by theory.

Efforts to reduce carbon emissions significantly will require considerable improvements in energy intensity, the ratio of energy consumption to economic activity. Improvements in energy intensity over the past thirty years suggest great possibilities for energy conservation: current annual energy consumption avoided due to declines in energy intensity since 1970 substantially exceed current annual domestic energy supply. While historic improvements in energy intensity suggest great scope for energy conservation in the future, I argue that optimistic estimates of avoided energy costs due to energy conservation are likely biased downward. I then analyze a data set on energy intensity in the United States at the state level between 1970 and 2001 to disentangle the key elements of energy efficiency and economic activity that drive changes in energy intensity.

Bulgaria is situated in a geopolitical crossroad. This creates opportunities that can be beneficial not only for the country, but also for the region and beyond. One of the spheres that Bulgaria can take advantage of is the development of energy projects. This can happen in two main directions: • By serving as energy hub for the region and by distributing natural gas brought via pipelines from Russia and the East. • Exporting electricity produced in the upgraded production facilities as well as in the nuclear power plant in Belene at present under construction. The role Bulgaria could play in the energy market as key transit country is due mainly to two factors: • The geographical location at a crossroad that facilitates it being a mediator between Europe and Asia. • The present situation on the energy market that leads the European countries to seek alternative routes as well as suppliers for vital energy resources. Whether and how much Bulgaria is going to utilize its position is a matter of political will in the first place. The opportunities lying ahead and are ready to serve for the prosperity of the region.

n order to analyze competition in gas markets, an intermediate activity of storage is included in a classical model of vertical relations. In that case, firms can inject or withdraw strategically natural gas resource. The access to the storage facility can deteriore the welfare since it incites the vertically integrated firms (production and distribution) to withdraw strategically. This incentive is reduced by vertical integration between storage and distribution. Thus it improves the social welfare.

This paper considers the role of incentive based climate adaptation policies. It uses the early literature on pricing and capacity choices under demand uncertainty to describe how revised price structures for the substitutes for climate services can be treated as anticipatory adaptation. In many situations the policies determining the prices of these services make them difficult to adjust. Thus, excess demand will not be managed through price adjustment. This situation is important because it implies that the rationing rules determining who is served influence both capacity planning and pricing decisions. The lesson drawn from these models is that reform of pricing policy for climate substitutes offers a ready basis for incentive based adaptation policy. The last part of the paper offers some empirical evidence on how the price elasticity of the residential demand for water changes with variations in seasonal precipitation. The findings suggest marked differences between normal and dry conditions for the Phoenix metropolitan area. These results reinforce the need to co-ordinate changes in pricing policy with any capacity planning developed for water supplies as part of anticipatory climate adaptation. Similar relationships may well apply for other substitutes for climatic services.

This chapter examines the tradeoffs of regulating upstream (e.g., coal, natural gas, and refined petroleum product producers) versus regulating downstream (e.g., direct sources of greenhouse gases (GHG)). In general, regulating at the source provides polluters with incentives to choose among more opportunities to abate pollution. This chapter develops a simple theoretical model that shows why this added flexibility achieves the lowest overall costs. I broaden the theory to incorporate several reasons why these potential gains from trade may not be realized--transactions costs, leakage, and offsets--in the context of selecting the vertical segment of regulation.

When compared to the previous literature which analyzes oil price changes and real economic activity for countries influencing world demand and/or supply, this study is first of its kind in investigating the relation within the context of a small open economy, Turkey. Parallel to the results of Blanchard and Gali (2007) for developed economies, we first report for Turkey that the negative response of real output to oil price increases have diminished since the early 2000s. Other than using different versions of oil price changes and real output growth, which are the standard variables used in the empirical literature, in our next set of estimations we also include variables to account for global liquidity conditions. Once these variables are incorporated, we unveil that the negative impact of oil price changes on aggregate economic activity is significant even in the post-2000 period.

This article provides a simple framework to analyze the determinants of targeting performance of utility tariffs and applies it to data on electricity in Cape Verde, Rwanda, and Sao Tome and Principe. While most indicators of benefit incidence are silent as of why subsidies are targeted the way they are (they only give an idea as to whether they reach the poor or not and to what extent), we develop a simple decomposition that allows analyzing both “access†and “subsidy-design†factors that influence the targeting performance of subsidies. Our findings suggest that consumption subsidies for electricity in Cape Verde, Rwanda, and Sao Tome and Principe are regressive in large part due to access factors that prevent the poor from using the services. We then conduct simulations to quantify how much targeting performance could be enhanced by changing tariff-structures as well as subsidizing connections instead of consumption.

Hungary, one of the leading in the reforms countries from South Europe, bravely privatizes the energy sector with foreign capital. While in West as a result of the liberalization reached was a plenty of electrical energy and strong decrease of the tariffs, in Hungary it led to surplus of powers, but there is a long way to go till reaching lower tariffs. Now the country faces the challenges to liberalize the energy market, meeting all the problems accompanying this process.