Personal carbon trading: A policy ahead of its time?

In 2008, the UK government undertook a review of personal carbon trading (PCT) and declared that it was ‘an idea currently ahead of its time’. PCT is a radical policy proposal which would entail all adults receiving an equal, tradable carbon allowance to cover emissions from household energy and/or personal travel. The allowance would reduce over time, in line with national emissions reduction goals. The government’s key concerns about PCT were its social unacceptability and high cost. This paper reviews the literature and identifies knowledge gaps, and then discusses whether these concerns are justified. Contrary to the government’s conclusions, most research shows PCT to be at least as socially acceptable as an alternative taxation policy. People think it could be both fair and effective. Set-up and running costs for PCT will undoubtedly be higher than for alternative taxation policies. However, PCT could deliver benefits from individual and social change motivated by non-economic aspects of the policy. These potential benefits are outlined here. The conclusion is that PCT is a promising and timely policy idea.     

Understanding ‘local’ opposition to wind development in the UK: How big is a backyard?

In recognition of the environmental and economic threats posed by climate change; decisive steps are now being taken to stabilise greenhouse gas emissions. One sector receiving particular attention within the UK is that of electricity generation. As such, the government has introduced ambitious targets for increasing renewable generating capacity within the country. Wind turbines are expected to play a significant role in meeting these targets; however, despite high levels of support for the technology in principle, specific projects are often delayed or rejected on account of local opposition. This study aimed to establish how attitudes towards development might vary with respect to increasing distance from the identified sites. Participants were required to register their opinion towards development at a number of on- and off-shore locations in the UK. The results indicated that participants were most favourable to offshore development and least favourable to development at the identified sites. Attitudes to onshore development indicated that so long as a proposed location was anticipated to be ‘out of sight’ it was considered in relatively general terms. The results are discussed with reference to site visibility and landscape concerns and clearly support calls for a shift towards community-focussed development strategies.     

Stockpile strategy for China׳s emergency oil reserve: A dynamic programming approach

China is currently accelerating construction of its strategic petroleum reserves. How should China fill the SPR in a cost-effective manner in the short-run? How might this affect world oil prices? Using a dynamic programming model to answer these questions, the objective of this paper is to minimize the stockpiling costs, including consumer surplus as well as crude acquisition and holding costs. The crude oil acquisition price in the model is determined by global equilibrium between supply and demand. Demand, in turn, depends on world market conditions including China׳s stockpile filling rate. Our empirical study under different market conditions shows that China׳s optimal stockpile acquisition rate varies from 9 to 19 million barrels per month, and the optimal stockpiling drives up the world oil price by 3–7%. The endogenous price increase accounts for 52% of total stockpiling costs in the base case. When the market is tighter or the demand function is more inelastic, the stockpiling affects the market more significantly and pushes prices even higher. Alternatively, in a disruption, drawdown from the stockpile can effectively dampen soaring prices, though the shortage is likely to leave the price higher than before the disruption.     

Who pays for the ‘beer fridge’? Evidence from Canada

The energy intensity of refrigerators varies widely across vintages. Recent improvements in the energy efficiency of refrigerators have the potential to decrease residential energy use, and in some locations this could have a significant impact on a typical household's greenhouse gas (GHG) emissions. Among the impediments to the realization of the energy use and environmental benefits from the technological energy-efficiency gains in Canada is the fact that a large proportion of households continue to use their old refrigerators as ‘beer fridges’ after the purchase of a new refrigerator. In this paper, we use information from the Survey of Household Energy Use (SHEU-2003) to examine this phenomenon. The empirical results are discussed in the context of existing Canadian programs that target purchases of new refrigerators and the disposal of old ones.     

Can carbon emission trading scheme achieve energy conservation and emission reduction? Evidence from the industrial sector in China

Whether the emission trading scheme (ETS) can achieve energy conservation and emission reduction in developing countries is crucial for these countries to achieve sustainable economic and environmental development. This study investigates the energy conservation and emission reduction effects of China's carbon dioxide (CO₂) ETS pilot policy implemented in 2011. Based on panel data of the two-digit industry at province level from 2005 to 2015, we adopt the difference-in-differences (DID) model to examine the effects of the CO₂ ETS on energy conservation and emission reduction. The results show that the CO₂ ETS decreases the energy consumption of the regulated industries in pilot areas by 22.8% and the CO₂ emissions by 15.5% compared to those in nonpilot areas. Further analysis indicates that the policy effects are mainly driven by improving technical efficiency and adjusting industrial structure. In addition, we find that the CO₂ ETS performs better in areas with high levels of environmental enforcement and marketization. Overall, our findings suggest that the CO₂ ETS has achieved energy conservation and emission reduction effects in developing countries.     

The EU Renewables Directive—What is the fuss about trading?

Considerable argument about trading in green electricity certificates (GECs) preceded the publication of the proposed EU Renewables Directive in early 2008. The proposed Directive set a binding target of 20 per cent of EU energy to be derived from renewable energy by 2020 broken down into targets for each member state. Those arguing for trade in green certificates, called certificates of guaranteed origin (GO), included major electricity companies. However, the idea of mandatory trading was opposed by the main renewable energy industry lobby groups. The proposed Directive limited trading in accordance with the demands of the renewables industry pressure groups. Analysis suggests that if member states were forced to trade to achieve a mandatory target of 20 per cent target, then GEC prices would rise to high levels because the demand for tradeable certificates would be much higher than their supply. Trading is unlikely to improve the prospects for meeting the targets. A system of nationally based ‘feed-in tariff’ systems would not face the problems of uncertain certificate prices faced by compulsory trading in GECs.     

The energy intensity in Lithuania during 1995–2009: A LMDI approach

The measurement, assessment, and effective mitigation of energy intensity compose a foremost objective of contemporary energy policy. Although the European Union (EU) Member States have been experiencing the convergence in energy efficiency indicators, Lithuania, acceded to the EU in 2004, still remains peculiar with relatively high energy intensity. Our study, therefore, is aimed at analyzing the energy intensity trends in Lithuanian economy as a whole as well as in separate economic sectors. The investigation covers the period of 1995–2009. The Logarithmic Mean Divisia Index was applied for decomposition analysis. Our analysis has shown that energy efficiency falls during economic downturn. In order to facilitate these challenges the Lithuanian Government as well as business should opt for increasing energy efficiency in the most problematic sectors of transport and services. In addition, the analysis of legal acts, namely National Energy Efficiency Programme for 2006–2010 and Energy Efficiency Action plan for 2010–2016, was taken into consideration. Some suggestions, thus, were offered for successful implementation of strategic goals outlined in the aforementioned strategic documents.     

Does the S&P500 index lead the crude oil dynamics? A complexity-based approach

Taking the complex property of nonlinear feedback connectivity into consideration, the goal of this paper is to apprehend the interdependences between the financial and energy sectors. Our contribution is both theoretical and methodological. We conduct a multivariate analysis employing nonlinear tools, namely the Partial Transfer Entropy and the Asymmetric Mackey-Glass causality test. In particular, we build a system comprising the petroleum complex (crude oil, gasoline and heating oil), the S&P500 index and the 1-month futures-spot spread for crude oil. By adopting a rolling-window approach, we observe a persistent lead-lag relationship between the S&P500 index and the market participants' expectations for crude oil, from 2004 to 2009. Depending on the bubble period in the stock market, it appears that the resulting coupling becomes subject to the deterioration of global economic activity, induced by large common shocks.     

Coal consumption in China: How to bend down the curve?

Noting the recent decline in the coal consumption in China, a variety of prior literature studies the peak of coal consumption and finds mixed results. This paper systematically studies the historical rules, the driving mechanism, as well as the future trend of coal consumption in China. First, through comparative analysis and breakpoint regression, we find that there are three consecutive inverted U-shapes between China's coal consumption and economic development from 1965 to 2016, and they reach inflection points in 1980, 1998, and 2013, respectively. Second, the LMDI decomposition analysis of coal consumption reveals that output effects and intensity effects jointly determine the overall trend of each inverted U, and structural effects play a key role in the formation of each inverted U-shaped inflection point. Finally, the forecast shows that coal consumption will decline at an average annual rate of 0.4% from 2017 to 2030, and by then it will be basically in a plateau period. There is a big gap between the consumption trend and the inverted U scenario. In order to bend the coal consumption curve downward and ensure that 2013 will become a long-term peak, the government should accelerate the optimization of the industrial structure and energy consumption structure, and improve coal consumption efficiency continuously through a mix of policies.     

Can foreign direct investment harness energy consumption in China? A time series investigation

This study assesses the long-run relationship and short-run dynamics between foreign direct investment (FDI) and energy consumption in China. Applying the bounds testing approach to annual data from 1982 to 2012, we find that a stable FDI–energy nexus exists in the long run and a 1% increase in FDI reduces energy consumption by 0.21%. However, this study shows a positive association between FDI and energy consumption in the short run, attributing to the dominance of the scale effect. Our results remain robust to different measurements and estimators. It is suggested that the Chinese government shall support the inward FDI in the tertiary and energy sectors and strengthen local absorptive capacities to fully internalize FDI-related knowledge spillovers in energy conservation.     

Chinese companies’ awareness and perceptions of the Emissions Trading Scheme (ETS): Evidence from a national survey in China

China announced the launch of a national Emissions Trading Scheme (ETS) in 2017; however, companies appear show little enthusiasm for participation in the ETS in China. This paper identifies the factors affecting companies’ awareness and perceptions of ETS by conducting a national survey based on an online questionnaire from May to November 2015 in seven carbon trading pilots. The results indicate that companies’ attitudes towards the ETS are positively influenced by government regulations and policy, public relations management and estimated economic benefit. Of these, public relations management is the decisive factor and estimated economic benefit is confirmed to be a relatively weak predictor. A company's environmental and energy strategy exerts insignificant effects on its preference for the ETS, although the sampled companies are very willing to save energy and reduce emissions. There exists an inverted U-shape relationship between a company's level of mitigation technologies and its attitudes towards the ETS. The carbon price fails to stimulate companies to upgrade mitigation technologies. The majority of companies treat participation in the ETS only as a means of improving ties with governments, as well as of earning a good social reputation, rather than as a cost-effective mechanism to mitigate greenhouse gas emissions.     

Hybridization of feedstocks—A new approach in biodiesel development: A case of Moringa and Jatropha seed oils

In this study, two selected feedstocks, Moringa oleifera and Jatropha curcas seed oils, and their methyl esters (biodiesel) were subjected to two new different hybridization processes at varying proportions experimentally. The hybrid compositions were J₅₀M₅₀, J₄₀M₁₀, J₃₀M₂₀, J₂₀M₃₀, and J₁₀M₄₀ from crude oil samples (in situ) and BM₅₀J₅₀, BM₄₀J₁₀, BM₃₀J₂₀, BM₂₀J₃₀, and BM₁₀J₄₀ from produced biodiesel by transesterification (ex situ) using production variables and optimization sequences. The hybrids were evaluated for chemo-physical and thermal properties using American Society for Testing and Materials and South African National Standards standards for each specific test(s). Results obtained revealed the efficacy of hybridization in improving the specific biodiesel properties as fuels. Specific tests include viscosity, specific gravity, refractive index, cetane index, fatty acid composition, free and total glycerine (TG), free fatty acid (FFA) composition, flash point, pour and cloud points, and calorific values. These were all higher and better than the single-stock biodiesel fuels. Moringa oleifera biodiesel, which was proved an excellent biodiesel fuel in the previous studies of the authors having high oleic acid content (>70%), impacted positively on Jatropha in enhancing its potential, with positive correlation at a 95% confidence level (α > 0.05) and on analysis of variation (ANOVA). This is a new approach in biodiesel development as studies of this nature are scarce in the literature.     

The impact of government subsidies and enterprises’ R&D investment: A panel data study from renewable energy in China

In this research, we aim to understand the influence of government subsidies on enterprises’ research and development (R&D) investment behavior, particularly in China’s renewable energy sector. We are also interested in examining how the attributes of enterprise ownership act as a moderating variable for the relationship between government subsidies and R&D investment behavior. Three classical panel data analysis models including the pooled ordinary least squares (OLS) model, the fixed effect model and the random effect model are employed. We find that government subsidies have a significant crowding out influence on enterprises’ R&D investment behavior and that the influence is further moderated by the attributes of enterprise ownership. Moreover, a panel threshold regression model is used to demonstrate how the influence of government subsidies on enterprises’ R&D investment behavior will change when government subsidies increase. Two thresholds, 0.6% and 10.1%, are identified. We recommend that relevant government departments should motivate enterprise R&D investment behavioral intention by increasing subsidies within a certain range. Different attributes of enterprise ownership should also be considered as part of policy reform and re-structuring relating to government subsidies.     

Particle–fluid interactivity reduces buoyancy-driven thermal transport in nanosuspensions: A multi-component Lattice Boltzmann approach

ABSTRACT

Severe contradictions exist between experimental observations and computational predictions regarding natural convective thermal transport in nanosuspensions. The approach treating nanosuspensions as homogeneous fluids in computations has been pinpointed as the major contributor to such contradictions. To fill the void, inter-particle and particle–fluid interactivities (slip mechanisms), in addition to effective thermophysical properties, have been incorporated within the present formulation. Through thorough scaling analysis, the dominant slip mechanisms have been identified. A Multi-Component Lattice Boltzmann Model (MCLBM) approach is proposed, wherein the suspension has been treated as a non-homogeneous twin component mixture with the governing slip mechanisms incorporated. The computations based on the mathematical model can accurately predict and quantify natural convection thermal transport in nanosuspensions. The role of slip mechanisms such as Brownian diffusion, thermophoresis, drag, Saffman lift, Magnus effect, particle rotation, and gravitational effects has been accurately described. A comprehensive study on the effects of Rayleigh number, particle size, and concentration revealed that the drag force experienced by the particles is primarily responsible for the reduction of natural convective thermal transport. In essence, the dominance of Stokesian mechanics in such thermofluidic systems is established in the present study. For the first time, as revealed though a thorough survey of the literature, a numerical formulation explains the contradictions observed, rectifies the approach, predicts accurately, and reveals the crucial mechanisms and physics of buoyancy-driven thermal transport in nanosuspensions.     

Are the macroeconomic effects of oil price shock symmetric?: A Factor-Augmented Vector Autoregressive approach

This paper aims to examine the asymmetric effect of oil price shocks on real economic activity in the U.S. within the context of a nonlinear Factor-Augmented Vector Autoregressive (FAVAR) model. By employing simulation methods, we trace the effects of positive and negative oil price shocks on the macroeconomic variables through the Impulse Response Function (IRF). It is found that the negative impacts of higher oil prices are larger than the positive effects of lower oil prices. And the asymmetric effects are more evident when the oil price shocks are larger. The results are robust to different lag specification and choice of factors.     

Wind power in China – Dream or reality?

After tremendous growth of wind power generation capacity in recent years, China now has 44.7 GW of wind-derived power. Despite the recent growth rates and promises of a bright future, two important issues - the capability of the grid infrastructure and the availability of backup systems - must be critically discussed and tackled in the medium term.The study shows that only a relatively small share of investment goes towards improving and extending the electricity infrastructure which is a precondition for transmitting clean wind energy to the end users. In addition, the backup systems are either geographically too remote from the potential wind power sites or currently financially infeasible. Finally, the introduction of wind power to the coal-dominated energy production system is not problem-free. Frequent ramp ups and downs of coal-fired plants lead to lower energy efficiency and higher emissions, which are likely to negate some of the emission savings from wind power.The current power system is heavily reliant on independently acting but state-owned energy companies optimizing their part of the system, and this is partly incompatible with building a robust system supporting renewable energy technologies. Hence, strategic, top-down co-ordination and incentives to improve the overall electricity infrastructure is recommended.     

Carbon emissions in China: How far can new efforts bend the curve?

While China is on track to meet its global climate commitments through 2020, China's post-2020 CO₂ emissions trajectory is highly uncertain, with projections varying widely across studies. Over the past year, the Chinese government has announced new policy directives to deepen economic reform, to protect the environment, and to limit fossil energy use in China. To evaluate how new policy directives could affect energy and climate change outcomes, we simulate two levels of policy effort—a continued effort scenario that extends current policies beyond 2020 and an accelerated effort scenario that reflects newly announced policies—on the evolution of China's energy and economic system over the next several decades. We perform simulations using the China-in-Global Energy Model, C-GEM, a bespoke recursive-dynamic computable general equilibrium model with global coverage and detailed calibration of China's economy and future trends. Importantly, we find that both levels of policy effort would bend down the CO₂ emissions trajectory before 2050 without undermining economic development. Specifically, in the accelerated effort scenario, we find that coal use peaks around 2020, and CO₂ emissions level off around 2030 at 10 bmt, without undermining continued economic growth consistent with China reaching the status of a “well-off society” by 2050.     

Are car manufacturers on the way to reduce CO2 emissions?: A DEA approach

One of the pillars of the fight against climate change is reducing the amount of greenhouse gases that are emitted into the atmosphere. In that regard, curtailing CO₂ emissions from transport activities is a major objective. In its attempts of “decarbonising” transport, the European Commission set in 2009 different emission limits on the vehicles sold in Europe. With this background, this paper aims to test the ability of the major car manufacturers to meet these present and future targets with the existing technological trends. To that end, we provide an in-depth analysis on the temporal evolution of emission efficiencies in the Spanish car market. The well-known DEA-Malmquist method is applied over a large sample of car models sold in Spain between 2004 and 2010. A second-stage regression allows us to identify the main drivers of efficiency, catch-up and technical change over the period. Finally, the estimated trends are extrapolated to predict future emission levels for the car manufacturers. Using post-regulation rates of technical change, results show that the vast majority of companies would meet the 2015 target, 27% of the current market would meet the 2020 target, and around 3% would be able to comply with the 2025 target. Thus, since all targets are technologically feasible, stricter regulation is the recommended approach to encourage manufacturers to meet the goals set by the European Commission.     

What hinder the further development of wind power in China?—A socio-technical barrier study

Promoting wind power is a long-term strategy of China to respond to both energy shortage and environmental pollution. Stimulated by various incentive policies, wind power generation in China has achieved tremendous growth, with the cumulative installed capacity being the largest worldwide for five consecutive years since 2010. However, obstructed by various barriers, wind power provides only 2.6% of national electricity generation in China, despite the strong support from the government. From a socio-technical transition perspective, this paper aims to systematically analyze the barriers hindering the further development of China's wind power. A wind power niche model is established to illustrate the complex interactions among actors in the wind power industry and electricity supply regime. Then, qualitative content analysis is adopted to process the related evidence and data, and four categories of socio-technical barriers are identified, including technology, governance, infrastructure and culture barriers. The study shows that various interrelated barriers form a blocking mechanism which prohibits the further development of wind power in China. Policy suggestions are proposed to eliminate the barriers and further empower the wind power niche. The lesson learned from China can offer useful references for other economies to promote wind power industries of their own.