• Energy Research

Abstract The mothballing option has been studied in the literature, but mainly in decision theoretic frameworks. This paper looks at it from a strategic point of view and applies it to an incumbent-entrant framework. In particular, based on the recent strategic interactions between OPEC and the shale oil industry, we conduct a case study where the incumbent OPEC is a flexible producer that competes with a representative shale oil firm. Upon entry, the latter produces a fixed amount but it can apply the mothballing option in times of low demand. Our main results are threefold. First, we find that under low demand uncertainty, the mothballing option has a negative effect on the value of the entrant. Second, a large market share of the entrant will stimulate mothballing, caused by a so-called squeeze strategy of the incumbent. Third, we show that a higher demand elasticity induces mothballing as confirmed in our empirical analysis of the (shale) oil market.

The continuous depletion of nonrenewable natural resources and climate change may lead to a future characterized by a higher frequency of extreme natural events (i.e., flooding, hurricanes, and droughts) and resource supply shocks (i.e., oil price shock). Sub-Saharan African countries will be particularly exposed to these types of shock due to their socioeconomic conditions and geographical conformation. This study investigates the impact of two contemporaneous covariant sudden shocks (i.e., drought and price oil shock) and the possible coping strategies through a static computable general equilibrium (CGE) model for Kenya. The results suggest that a mitigation policy as public transfers is an effective mitigation tool for drought effects, improving welfare and GDP in the short run. However, adopting public transfers during an oil crisis may have regressive effects on population income and welfare. Because the mitigation effectiveness is strongly affected by the complex interaction of combined shocks, the public authorities should pay attention to policy implementation. These findings call for a new scheme of transfer allocation where rural and low-income household quantiles should receive more attention by postdrought mitigation policy, being that they are more vulnerable to external shocks.

In this paper, we deal with the issue of measuring the Agenda 2030 at the urban level in Italy; the results are useful for the policy analysis and dissemination of sustainable development at the local level. The proposed tool merges 53 available economic, social and environmental elementary indicators into 16 composite indices and one composite dimension representing 16 out of 17 Sustainable Developments Goals (SDGs) adopted by the United Nations in 2015. The contribution of the paper is twofold: While the results of the indices show the geographical and demographic heterogeneity within the country when considering each of the 16 dimensions, the methodological discussion highlights the complexity of the phenomena, due to the multidimensional definition of the Agenda 2030.

An increasing number of firms in OECD countries are obtaining certification as Socially Responsible. Literature is sensitive in testing whether there is a relation between firm performance and Social Responsibility certification. In order to overcome problems related to the multiplicity of Corporate Social Responsibility (CSR) definitions and certifications, our work implements a CSR index based on the intersection between two of the three main international indices (Domini 400 Social Index, Dow Jones Sustainability World Index and FTSE4Good Index). By using this database in a panel framework, our work shows that among Corporate Performance Measures (CPF), Market Value Added (MVA) is affected by a firm’s social responsible behaviour and certification. The results support the idea that CSR firms have better long-run performance. Thanks to the reputation effect, they achieve higher sales volumes and profits and a reduction in long-run costs: these effects compensate the costs due to the certification.

Many predictions and conclusions in the climate change literature have been made and drawn on the basis of theoretical analyses and quantitative models that assume exogenous technological change. One is naturally led to wonder whether those conclusions and policy prescriptions hold in the more realistic case of endogenously evolving technologies. In previous work we took a popular integrated assessment model and modified it so as to allow for an explicit role of the stock of knowledge which accumulates through R&D investment. In our formulation knowledge affects both the output production technology and the emission-output ratio. In this paper we make further progress in our efforts aimed to model the process of technological change. In keeping with recent theories of endogenous growth, we specify two ways in which knowledge accumulates: via a deliberate, optimally selected R&D decision or via experience, giving rise to Learning by Doing. As an illustration, we simulate the model under the two versions of endogenous technical change and look at the dynamics of a selected number of relevant variables, including growth rates of GDP and physical capital, as well as total emissions and rate of domestic abatement.

The aim of this paper is to estimate the potential impacts of different COVID-19 scenarios on the Italian energy sector through 2030, with a specific focus on transport and industry. The analysis takes a multi-disciplinary approach to properly consider the complex interactions of sectors across Italy. This approach includes the assessment of economic conditions using macroeconomic and input-output models, modelling the evolution of the energy system using an energy and transport model, and forecasting the reaction of travel demand and modal choice using econometric models and expert interviews. Results show that the effect of COVID-19 pandemic may lead to mid-term effects on energy consumption. The medium scenario, which assumes a stop of the emergency by the end of 2021, shows that energy-related emissions remain 10% lower than the baseline in the industry sector and 6% lower in the transport sector by 2030, when compared with a pre-COVID trend. Policy recommendations to support a green recovery are discussed in light of the results.