The impacts of energy prices on energy intensity: Evidence from China

In this paper, we present a review of the deregulation of energy prices in China between 1985 and 2004 and assess the impacts of changes in energy prices on aggregate energy intensity and coal/oil/electricity intensity. We used time series data to provide estimates of energy price elasticities. Empirical results showed that: (1) The own-price elasticities of coal, oil, and aggregate energy were negative in periods both before and after 1995, implying that higher relative prices of different energy types lead to the decrease in coal, oil, and aggregate energy intensities. However, the positive own-price elasticity of electricity after 1995 probably indicates that the price effect was weaker than other factors such as income effect and population effect. (2) The impacts of energy prices were asymmetric over time. (3) Sectoral adjustment also drove the decrease in aggregate energy intensity. Although raising energy prices to boost efficiency of energy use seems to be an effective policy tool, other policy implications concerned with energy prices, such as energy supply security and fuel poverty, must also be considered.     

The geopolitical impact of the shale revolution: Exploring consequences on energy prices and rentier states

While the shale revolution was largely a US’ affair, it affects the global energy system. In this paper, we look at the effects of this spectacular increase in natural gas, and oil, extraction capacity can have on the mix of primary energy sources, on energy prices, and through that on internal political stability of rentier states. We use two exploratory simulation models to investigate the consequences of the combination of both complexity and uncertainty in relation to the global energy system and state stability. Our simulations show that shale developments could be seen as part of a long term hog-cycle, with a short term drop in oil prices if unconventional supply substitutes demand for oil. These lower oil prices may lead to instability in rentier states neighbouring the EU, especially when dependence on oil and gas income is high, youth bulges are present, or buffers like sovereign wealth funds are too limited to bridge the negative economic effects of temporary low oil prices.     

Climate change policy and international trade: Policy considerations in the US

Significant recent attention, in both research and policy realms, has been given to the intersection of international trade and global climate change. Trade presents challenges to climate policy through carbon leakage and competitiveness concerns, but also potential solutions through the use of cooperative trade agreements, technology transfer, or carbon tariffs against recalcitrant nations. This study examines how trade may affect climate policy in the US and specifically examines the use of carbon tariffs as suggested by recent bills before the US Congress. We argue that even if such actions are legal at the World Trade Organization, they are probably not necessary to protect industrial competitiveness in the traditional sense, could cover only a small proportion of total embodied emissions in trade, and may in fact be counterproductive at a moment when global cooperation is desperately needed. While political agreement may necessitate at least the threat of carbon tariffs, cooperative agreements such as global sectoral agreements, technology sharing, etc. could be more productive in the short term.     

World oil and agricultural commodity prices: Evidence from nonlinear causality

The increasing co-movements between the world oil and agricultural commodity prices have renewed interest in determining price transmission from oil prices to those of agricultural commodities. This study extends the literature on the oil–agricultural commodity prices nexus, which particularly concentrates on nonlinear causal relationships between the world oil and three key agricultural commodity prices (corn, soybeans, and wheat). To this end, the linear causality approach of Toda–Yamamoto and the nonparametric causality method of Diks–Panchenko are applied to the weekly data spanning from 1994 to 2010. The linear causality analysis indicates that the oil prices and the agricultural commodity prices do not influence each other, which supports evidence on the neutrality hypothesis. In contrast, the nonlinear causality analysis shows that: (i) there are nonlinear feedbacks between the oil and the agricultural prices, and (ii) there is a persistent unidirectional nonlinear causality running from the oil prices to the corn and to the soybeans prices. The findings from the nonlinear causality analysis therefore provide clues for better understanding the recent dynamics of the agricultural commodity prices and some policy implications for policy makers, farmers, and global investors. This study also suggests the directions for future studies.     

Simulation study on falling oil prices: supply-demand and prices scenarios to 2000

The simulation study concludes that crude oil prices in the next 2–3 years will continue to repeat sharp fluctuations, with an average price staying at levels of around $15–18. But speculative crudes, such as North Sea Brent, WTI and Dubai, will show even sharper fluctuations in their market prices. When the volatile period of sharp fluctuations is over, prices will then temporarily settle at the early-20-dollar level in the late 1980s through to the early 1990s. Then, from the mid-1990s, prices will enter an upward period, reaching around $24 in 1995 and around $30 in 2000 (in terms of the 1986 real price).     

CO2 emissions embodied in international trade: evidence for Spain

The objective of this paper is to analyse the sectoral impacts that Spanish international trade relations have on present levels of atmospheric pollution using an input–output model. We try to evaluate the exports and imports of the Spanish economy in terms of the direct and indirect CO₂ emissions (CO₂ embodied) generated in Spain and abroad. The results show a slightly exporting behaviour in the Spanish economy which, nevertheless, hides important pollution interchanges. Moreover, the sectors transport material, mining and energy, non-metallic industries, chemical and metals are the most relevant CO₂ exporters and other services, construction, transport material and food the biggest CO₂ importers, and those whose final demands also embody more than 70% of the CO₂ emissions.     

Energy consumption,economic growth and prices: A reassessment using panel VECM for developed and developing countries

This paper reinvestigates the energy consumption–GDP growth nexus in a panel error correction model using data on 20 net energy importers and exporters from 1971 to 2002. Among the energy exporters, there was bidirectional causality between economic growth and energy consumption in the developed countries in both the short and long run, while in the developing countries energy consumption stimulates growth only in the short run. The former result is also found for energy importers and the latter result exists only for the developed countries within this category. In addition, compared to the developing countries, the developed countries’ elasticity response in terms of economic growth from an increase in energy consumption is larger although its income elasticity is lower and less than unitary. Lastly, the implications for energy policy calling for a more holistic approach are discussed.     

The effect of economic growth,oil prices,and the benefits of reactor standardization: Duration of nuclear power plant construction revisited

The profitability of nuclear power plant investment is largely determined by the construction duration, which directly impacts discounted cash flows, debt and interest payments, as well as variable costs, such as labor. This paper analyzes the key drivers of construction duration using survival models. We focus especially on the strategic expectation formation of private and public utilities engaging in such highly risky megaprojects. Using a balanced dataset of explanatory variables and the IAEA/PRIS dataset of reactor construction starts between 1950 and 2013 we find that the expectation of rising oil prices and higher economic growth, along with the higher per capita GDP of a country tend to reduce the time needed to grid connection. We also identify the reactor models with the fastest construction duration.     

Russian and European gas interdependence: Could contractual trade channel geopolitics?

In a framework of international political economics, this article analyses the increasing distance between Russia and the European Union (EU) in their interdependent relationship with regard to gas. The representations of economic risks associated with the dominant position of the Russian seller in the European gas market are analysed in terms of industrial economics. Then the relevance of possible responses by the EU is analysed in relation to the reality of alleged risks of gas dependence: the tentative EU–Russia regulatory unification, the creation of a single gas negotiator, and the support to a denser pan-European network, with additional entry points and sources of supply and increased market integration in order to increase the contestability of the markets.     

The future of U.S. natural gas production,use, and trade

Two computable general equilibrium models, one global and the other providing U.S. regional detail, are applied to analysis of the future of U.S. natural gas. The focus is on uncertainties including the scale and cost of gas resources, the costs of competing technologies, the pattern of greenhouse gas mitigation, and the evolution of global natural gas markets. Results show that the outlook for gas over the next several decades is very favorable. In electric generation, given the unproven and relatively high cost of other low-carbon generation alternatives, gas is likely the preferred alternative to coal. A broad GHG pricing policy would increase gas use in generation but reduce use in other sectors, on balance increasing its role from present levels. The shale gas resource is a major contributor to this optimistic view of the future of gas. Gas can be an effective bridge to a lower emissions future, but investment in the development of still lower CO₂ technologies remains an important priority. International gas resources may well prove to be less costly than those in the U.S., except for the lowest-cost domestic shale resources, and the emergence of an integrated global gas market could result in significant U.S. gas imports.     

国际原油市场走势回顾与展望

当前,世界经济正在经历一个艰难而复杂的复苏过程,下行风险显著,导致国际油价在震荡中前行,不稳定不确定因素显著增多。本文梳理了2012年国际原油市场的发展历程与主要特征,并对2013年世界经济形势和原油价格走势进行了展望,认为欧元区经济和债务危机进一步恶化的可能性是2013年世界经济面临的主要风险,受此影响,2013年国际油价将略低于2012年,而且Brent与WTI原油价差较2012年将有所缩小。     

Integrating global energy and climate governance: The changing role of the International Energy Agency

Despite the long-recognized interlinkages between global energy consumption and climate change, there has historically been only limited policy interaction, let alone integration, between the two fields. This compartmentalization is mirrored in scholarship, where much research has focused on the fragmentation of, respectively, global energy and global climate governance, but only little has been said about how these fields might be integrated. Our analysis of the International Energy Agency’s (IEA) changing activities in recent years shows that governance integration – both within global energy governance and between global energy and climate governance – is now happening. The IEA has broadened its portfolio to embrace the full spectrum of energy issues, including renewable energy and climate change; it has built and is expanding key partnerships with both the UN climate convention and the International Renewable Energy Agency (IRENA); and it has become an authoritative advocate for the inter-related goals of a low-carbon transition and climate change mitigation. We show that these developments are not the result of a top-down plan, but have rather emerged through the Agency’s various efforts to pursue its energy-centric mandate in a fast-changing global policy environment.     

The long-run impact of energy prices on world agricultural markets: The role of macro-economic linkages

The world prices of some food and energy products have followed similar large swings in recent years. We investigate the long-run relationship between these prices using a world Computable General Equilibrium model with detailed representations of food and energy markets. Particular attention is paid to specifying macro-economic linkages which have often been overlooked in recent analysis and debate. We find that the omission of these macro-economic linkages has a substantial bearing on this relationship. A positive relationship due to the cost push effect has been identified in most analysis, but we find that the introduction of the real income effect may indeed imply a negative relationship between world food and energy prices.     

The pass through of oil prices into euro area consumer liquid fuel prices in an environment of high and volatile oil prices

Crude and refined oil prices have been relatively high and volatile on a sustained basis since 1999. This paper considers the pass through of oil prices into consumer liquid (i.e. petrol, diesel and heating) fuel prices in such an environment.The pass through of oil prices into consumer liquid fuel prices has already been addressed extensively in the literature. Nonetheless much of this literature has either focused on the United States or on a time period when oil prices were relatively stable, or has used monthly data. The main contribution of this paper is a comprehensive combination of many features that have been considered before but rarely jointly. These features include: (1) the analysis of the euro area as an aggregate and a large number of countries (the initial 12 member states); (2) the consideration of different time periods; (3) the modelling of the data in raw levels rather than in log levels. This turns out to have important implications for our findings; (4) the use of high frequency (weekly) data, which, as results will suggest, are the lowest frequency one should consider; (5) the investigation of the different stages of the production chain from crude oil prices to retail distribution — refining costs and margins, distribution and retailing costs and margins; (6) the examination of prices including and excluding taxes — excise and value-added; (7) the modelling of prices for three fuel types — passenger car petrol and diesel separately and home heating fuel oil; (8) lastly we also address the issue of possible asymmetries, allowing for the pass through to vary according to (a) whether price are increasing or decreasing and (b) whether price levels are above or below their equilibrium level.The main findings are as follows: First, as distribution and retailing costs and margins have been broadly stable on average, the modelling of the relationship between consumer prices excluding taxes and upstream prices in raw levels rather than in logarithms has important implications for the stability of estimates of pass through when oil price levels rise significantly. Second, considering spot prices for refined prices improves significantly the fit of the estimated models relative to using crude oil prices. It also results in more economically meaningful results concerning the extent of pass through. Third, oil price pass through occurs quickly, with 90% occurring within three to five weeks. Fourth, using a relatively broad specification allowing for asymmetry in the pass through from upstream to downstream prices, there is little evidence of statistically significant asymmetries. Furthermore, even where asymmetry is found to be statistically significant, it is generally not economically significant. Lastly, these results generally hold across most euro area countries with few exceptions.     

Oil prices and current account: A structural analysis for the Turkish economy

Although there has been an increasing number of studies about the effects of oil prices on the macroeconomic performances, the literature on the interaction between oil prices and current account is limited, especially for oil importing developing countries. This paper analyzes the impact of oil prices on the current account balances for the Turkish economy using a structural vector autoregression model. Our model allows us to identify the net effect of oil prices on current account balances after controlling for other factors such as output gap and exchange rate misalignment. The results show that the response of current account ratio to oil price shock increases gradually up to the first three months and then starts to decrease, which indicates a significant effect of oil price shocks in the short-run. Moreover, when the obtained structural shocks are employed in a simple regression analysis, the parameter regarding the oil price shocks is found to be negative and statistically significant. The final section discusses the policy implications of the results.     

Greenhouse gases embodied in the international trade and final consumption of Finland: An input–output analysis

The estimation of greenhouse gas (GHG) emissions associated with international trade and final consumption gives a more complete and balanced picture of the responsibilities of various countries for the emissions that cause the climate change. The aim of this study was to look at the impact of the coverage of the GHGs and their sources and assumptions regarding the emissions of imports on the results of GHG emissions associated with international trade and final consumption of Finland. In addition to a single year study, a trend covering years 1990–2003 was produced for Finland to study the development of the GHG emissions associated with domestic consumption and the reasons behind the development. According to our results Finland was in 1999 a net exporter of CO₂ from fossil fuel combustion, CO₂ from all sources and GHGs of 4(4.2), 5 or 7 Gkg, respectively. The impact of different assumptions concerning the emissions embodied in imports in the case of Finland was tested by using the domestic emission intensities and the ratios of embodied emissions in imports in relation to domestic products by utilizing the data from the study by (OECD, 2003b. Carbon Dioxide Emissions Embodied in International Trade of Goods, STI Working Paper 2003/15, OECD, Paris). In the case of Finland, the differences of results calculated with these two methods remained rather small. The total emissions embodied in the imports changed from 33.8 to 34.4 Gkg and consequently the net export of CO₂ from fossil fuel combustion changed from 4.2 to 3.6 Gkg. The results for 1990–2003 show that the GHG emissions embodied in the exports have exceeded the GHG emissions embodied in the imports from early 1990s. The reason for the increasingly positive GHG trade balance in the case of Finland has been the change in the magnitude of trade rather than the changes in its structure. The results show also that the impact of international transport on the emission intensity of imports is significant and merits further research.     

Time-frequency causality and connectedness between international prices of energy,food, industry,agriculture and metals

This study analyzes the lead-lag relationship between the price indices of energy fuels and each of food, industrial inputs, agriculture raw materials, metals and beverages in the time-frequency domain. To this end, we first use the wavelet coherency and phase-differences. Next, we use the Diebold and Yilmaz (2012) and Barunik and Krehlik (2017) spillover indices to analyse the connectedness among the set of the price indices under consideration. The period of the study is 1990m1 to 2017m5. The wavelet coherency results reveal that there are important and significant relations between the fuel and food prices, the fuel and industrial prices, and the fuel and metal prices. These results also show that there are phase relationships between those paired prices. The volatility spillover results indicate that the agricultural sector is the most affected by shocks from the other markets. The return series of the industrial input prices at all frequencies appears to be the main source of volatility transmission to the prices of the other commodities over the whole period. This finding underlines the relevance of the industrial inputs to policy makers, particularly when they design policies to provide incentives related to industrial production.     

The peak of oil production—Timings and market recognition

Energy is essential for present societies. In particular, transportation systems depend on petroleum-based fuels. That world oil production is set to pass a peak is now a reasonably accepted concept, although its date is far from consensual. In this work, we analyze the true expectations of the oil market participants about the future availability of this fundamental energy source. We study the evolution through time of the curves of crude oil futures prices, and we conclude that the market participants, among them the crude oil producers, already expect a near-term peak of oil production. This agrees with many technical predictions for the date of peak production, including our own, that point to peak dates around the end of the present decade. If this scenario is confirmed, it can cause serious social and economical problems because societies will have little time to perform the necessary adjustments.     

Greenhouse gas emissions from the international maritime transport of New Zealand's imports and exports

Greenhouse gas emissions from international maritime transport are exempt from liabilities under the Kyoto Protocol. Research into quantifying these emissions is ongoing, and influences policy proposals to reduce emissions. This paper presents a cargo-based analysis of fuel consumption and greenhouse gas emissions from New Zealand's international maritime transport of goods. Maritime transport moves 99.5% (by mass) of New Zealand's internationally traded products. It is estimated that 73% of visiting vessels' activity can be directly attributed to the movement of goods in and out of New Zealand. A cargo-based methodology was used to estimate that the international maritime transport of New Zealand's imports and exports consumed 2.5 million tonnes (Mt; 2.6 billion litres) of fuel during the year 2007, which generated 7.7 Mt of carbon dioxide (CO₂) emissions. Double-counting of emissions would occur if a similar method was applied to all New Zealand's trading partners. In contrast, since few large vessels refuel in New Zealand, the National Greenhouse Gas Inventory listed 2007 international maritime transportation emissions as 0.98 Mt of CO₂, calculated from fuel bunkered for international transport. The results, therefore, show a significant difference between activity-based and bunker-fuel methodologies in quantifying New Zealand's emissions. International policy implications are discussed.