The European Union emissions trading scheme and fuel efficiency of fossil fuel power plants in Germany

I investigate the impact of the European Union Emissions Trading Scheme (EU ETS) on fuel efficiency of fossil fuel power plants using administrative micro data on power plants in Germany from 2003 to 2012. I find positive efficiency effects in fuel use, leading to a decrease in fuel input of 0.4 percent for an increase in carbon cost of one Euro. A back-of-the-envelope calculation suggests that the reduction in fuel use by fossil fuel power plants due to the introduction of the EU ETS translates into reductions in annual carbon emissions within the German electricity sector by around seven million tonnes in 2012. This represents about 2.4 percent of total annual carbon emissions in the German electricity sector and exemplifies the potential magnitude of efficiency improvements as a measure for reducing carbon emissions

Germeshausen Center Newsletter, Spring 2001

https://scholars.unh.edu/germeshausen/1000/thumbnail.jp

Investigating the influence of firm characteristics on the ability to exercise market power : a stochastic frontier analysis approach with an application to the iron ore market

This paper empirically analyzes the existence of market power in the global iron ore market during the period 1993-2012 using an innovative Stochastic Frontier Analysis approach introduced by Kumbhakar et al. (2012). In contrast to traditional econometric procedures, this approach allows for the estimation of firm- and time-specific Lerner indices and, therefore, the assessment of the influence of individual firm characteristics on the ability to generate markups. We find that markups on average amount to 20%. Moreover, location and experience are identified to be the most important determinants of the magnitude of firm-specific markups

Does the stick make the carrot more attractive? State mandates and uptake of renewable heating technologies

In this paper, we investigate the effect of the state-level renewable heating mandate for existing homes in Baden-Wuerttemberg, Germany's third largest federal state. The mandate requires homeowners to supply at least 10 % of their heat demand with renewable energy when they replace their existing heating system. To assess the impact of the renewable heating standard on the uptake of renewable heating systems, we use unique data on a federal government subsidy scheme and exploit geographic differences in state laws over time. We find no evidence of an effect of the mandate even after restricting distance to the state border and refining the data set through matching on population and building characteristics. These findings are unchanged, when we allow effects to vary across space or over time. While energy efficiency and renewable standards are often criticized for not being cost-effective, our results challenge the widespread view that a standard is nevertheless successful in achieving its policy goal

Effects of attribute-based regulation on technology adoption - the case of feed-in tariffs for solar photovoltaic

Feed-in tariffs are a widespread policy instrument to support the diffusion of renewable energy technologies. I investigate the impact of the size-based differentiation of these tariffs on the adoption of residential scale solar photovoltaic (PV) installations in Germany. Exploiting a policy change of administrative size classes for PV systems, I find that (i) the reduction in marginal feed-in tariffs decreases new capacity additions by around 29 per cent, and (ii) differentiated tariffs provide incentives for excess bunching at the ceiling of the smaller size class. Excess bunching decreases newly installed PV capacity additionally by around 14 per cent. Back-of-the- envelope calculations suggest that this may lead to annual efficiency losses that increase over time from about 0.2 to 4.4 per cent of the annual support cost for new small PV installations

State mandates on renewable heating technologies and the housing market

We study the effect of a state level mandate on renewable heating technologies on the housing market. The mandate requires a minimum share of 10 % renewable energy sources when changing the heating system in the existing building stock. As renewable energy sources are still more expensive than conventional alternatives this mandate could lower the relative price of homes in the existing building stock when a replacement of the heating system is impending. We implement a two stage difference-in-differences nearest neighbor matching approach to identify the effect on prices taking advantage of differences in regulation by location and vintage of the building stock. Our results find no evidence of an effect of the mandate on housing prices

Impacts of ownership changes on emissions and industrial production: Evidence from Europe

Firm ownership is a major determinant for the economic performance of firms, and emissions of pollutants are often by-products of industrial production. We investigate the impact of ownership on pollutant emissions of firms and their in- dustrial facilities in Europe jointly with their output, productivity, and other key economic outcomes. To disentangle the influence of ownership from other firm characteristics, we analyse the effects of ownership changes in an event-study approach. We find that industrial facilities and firms decrease their emissions and industrial output after a change in ownership. Emissions intensity and productivity do not change suggesting that reductions in emissions follow proportional reductions in output rather than reflecting changes in pollution abatement technology. We find some evidence for positive spillover effects on productivity and profits of other facilities and firms owned by the acquiring parent company after a change in ownership

Effects of information-based regulation on financial outcomes: Evidence from the European Union's public emission registry

Information-based policies play an important role in environmental protection efforts around the world. These policies use information provision and/or disclosure to shape behavior in order to meet the policy objective; for example, mandatory information disclosure requires firms to measure and report their pollutant emissions. This study investigates the influence of a particular information-based policy – the European Union’s mandatory and public emission registry of polluting facilities – on financial outcomes of German firms: revenues, costs, and profits. Using detailed firm-level data for the years 1998 to 2016, we exploit size- and pollution-specific reporting thresholds to isolate the effect of this policy. We compare firms that own facilities required to report in the first EPER wave with similar firms that do not own such facilities. For this comparison, we deploy both a difference-in-differences design and an event study. Our findings suggest that the introduction of EPER in 2001 increased both operating revenues and expenditures, yielding a neutral impact on the operating profits of affected firms. These results support neither of the two competing hypotheses regarding financial outcomes: costly regulation hypothesis and Porter Hypothesis

Wärmewende im Gebäudesektor: Lasst den CO2-Preis wirken

Über 80 Prozent des Endenergieverbrauchs der Haushalte in Deutschland wird für Raumwärme und Warmwasser verwendet. Da die Mehrheit der installierten Heizsysteme nach wie vor auf fossilen Energieträgern basiert, trägt der Gebäudesektor substanziell zu den nationalen Treibhausgasemissionen bei. Im vergangenen Jahr waren es rund 117 Mio. t CO2-Äquivalente. Bis zum Jahr 2030 soll der Ausstoß laut Klimaschutzplan 2050 auf 72 Mio. t CO2 reduziert werden, 2050 soll der Gebäudesektor nahezu klimaneutral sein. Angesichts sehr langer Investitionszyklen bei Gebäuden sind das ambitionierte Ziele. Um diese zu erreichen, setzt die Bundesregierung in ihrem neuen Klimaschutzprogramm auf eine Kombination von Förderprogrammen, Ordnungsrecht, einer CO2-Bepreisung sowie Information und Beratung. Das einzig wirklich Neue in diesem Maßnahmenpaket ist die Einführung einer expliziten Bepreisung von CO2-Emissionen, die nicht unter dem EU Emissionshandelssystem (EHS) reguliert werden – ein Schritt, der von Ökonomen lange gefordert wurde. Leider lassen es die Pläne der Bundesregierung nicht zu, dass die CO2-Bepreisung kurzfristig ihr volles Potenzial entfalten kann. Dieses ZEW policy brief liefert eine kritische Einordnung des Klimaschutzprogramms im Gebäudesektor. Anhand aktueller Erkenntnisse der Wirtschaftsforschung diskutiert es Nachteile von Förderprogrammen und ordnungsrechtlichen Maßnahmen und zeigt zugleich künftigen Forschungsbedarf auf