What Factors Drive Inequalities in Carbon Tax Incidence? Decomposing Socioeconomic Inequalities in Carbon Tax Incidence in Ireland. ESRI WP519. November 2015

Carbon taxes increase the cost of necessary household energy expenditures. In many developed countries, carbon taxes are regressive as they comprise a greater proportion of a poorer household’s income. Certain socioeconomic groups are more negatively affected by these impacts than others. While inequality of incidence by income group has received great attention in the literature, a gap exists to quantify the inequality associated with socioeconomic characteristics. This information is policy-relevant as it may inform the most effective means to offset negative welfare impacts through changes to taxes and/or social transfers. This paper provides this contribution. First, the inequality of carbon tax incidence across the income spectrum is quantified using the concentration index methodology. A subsequent multivariate decomposition quantifies the contribution each socioeconomic factor makes towards this inequality of incidence. This is carried out for electricity, motor fuel and all other home fuels to elicit variation of socioeconomic incidence by source. While income contributes a great deal towards inequality of incidence for other home fuels, socioeconomic characteristics are the primary determinants of electricity and motor fuel-related carbon tax incidence. The relative importance of each characteristic in determining regressive impacts is quantified and this varies by carbon tax source

Is there a fairer way to finance energy subsidies? ESRI Research Bulletin 2015/3/1

We examined academic stress among Irish sixth year students in the months leading up to the Leaving Certificate exam. The research was based on survey and interview data from the Post-Primary Longitudinal Study, involving 900 students across 12 case-study schools. We found that students themselves placed enormous weight on their performance in the exam and that stress was often linked to fears of not achieving academic goals. The role of Leaving Certificate results in deciding entry to higher education means that students see it as a crucial influence on subsequent life chances, with some believing that ‘their whole life depends on it’

How Do External Costs Affect Pay-As-Bid Renewable Energy Connection Auctions?. ESRI WP517. November 2015

Renewable energy deployment costs comprise both internal generation costs and external location-related infrastructure, environmental and social costs. To minimise generation costs, competitive connection contract auctions are becoming increasingly common. Should external costs have considerable influence on site selection outside of the auction process, optimal bidding strategies may be affected by the resulting re-ranking of winning bids. This paper elicits the impact this may have on optimal bidding behaviour. Specifically, we address the impact internalisation of external costs may have on bidding strategy. With deterministic generation costs, optimal bidding strategies include a markup. The optimal markup is lower if external costs are internalised into the investment decision. If investors have the ability to appropriate rents, due to market dominance or asymmetric information, non-internalised external costs lower markup. Generation cost uncertainty may result in below-cost bidding. This is less likely when externalities are not internalised. For markets where bids are competitively priced, this paper provides evidence to suggest that methods to minimise externalities associated with renewables deployment should be integrated with competitive pay-as-bid auctions

Regional income and wave energy deployment in Ireland

Alongside environmental benefits, renewable energy deployment is often evaluated on grounds of regional development. Focusing on wave energy deployment in Ireland, this paper quantifies employment-related welfare change net of associated subsidy costs. Although the added employment reduces inter-regional inequality, certain subsidies increase total income inequality by a greater extent. Total inequality increases by 0.25% in the preferred scenario. This pattern of incidence persists under an optimistic scenario where all manufacturing activity is carried out locally. This finding highlights that policies of regional development should consider the spatial distribution of associated subsidy costs

An auction framework to integrate dynamic transmission expansion planning and pay-as-bid wind connection auctions. ESRI WP523. January 2016

Efficient renewables deployment requires the minimisation of both internal generation costs and external transmission expansion planning (TEP) costs. Competitive pay- as-bid connection auctions allow wind energy generators to reveal their costs of generation such that internal generation costs may be minimised. TEP costs have not been incorporated into such auctions to date. Integrating these procedures may allow for a global minimisation of internal generation and external TEP costs over many time periods. This paper develops an auction mechanism and associated modelling framework to carry this out. The contributions of this framework are verified using a numerical example. Our results show that ignoring generation costs in transmission expansion planning has quantifiable economic consequences, while traditional pay-as-bid auctions can benefit from incorporating features associated with TEP, such as multi-period optimisation. Full integration of both modelling frameworks leads to efficiency improvements, both in terms of reduced investor rent-seeking and a more efficient deployment path

The distributional impact of the Irish public service obligation levy on electricity consumption

We analyse the distributional impact of financing energy and environmental policies through additional charges on electricity consumption, focussing on the impact Ireland’s flat-rate Public Service Obligation (PSO) levy has on domestic consumers. Switching Ireland’s flate-rate charge to a unit-based charge results in reduced regressivity across the entire income distribution. A unit-based scheme reduces aggregate burden for most households on low incomes. Regressive impacts are greater for a subset of heavy electricity users. Incremental block pricing (IBP) exaggerates these effects. A hybrid fixed/variable structure mitigates regressivity for high users but lessens overall regressivity reduction. Redistribution via Ireland’s Household Benefits Package is sub-optimal relative to a hypothetical equivalised income-based scheme. Net of ‘merit order’ savings, flat charges redistribute burden incidence from rich to poor whilst fixed per-unit charges have a neutral effect. IBP shifts cost to heavy users, predominantly large households. IBP results in a negative net burden for the majority of households across all income groups

Managing investor and consumer exposure to electricity market price risks through Feed-in Tariff design

Feed-in Tariffs (FiTs) incentivise the deployment of renewable energy technologies by subsidising remuneration and transferring market price risk from investors, through policymakers, to a counterparty. This counterparty is often the electricity consumer. Different FiT structures exist, with each transferring market price risk to varying degrees. Explicit consideration of policymaker/consumer risk burden has not been incorporated in FiT analyses to date. Using Stackelberg game theory and option pricing, we define FiT policies that efficiently divide market price risk, conditional on risk preferences and market conditions. We find that commonly employed flat-rate FiTs are optimal when policymaker risk aversion is extremely low whilst constant premium policies are optimal when investor risk aversion is extremely low. This suggests that if investors are considerably risk averse, the additional remuneration offered to incentivise deployment under a constant premium regime may be sub-optimal. Similarly, flat-rate FiTs are sub-optimal if policymakers are considerably risk averse. When both policymakers and investors are considerably risk averse, an intermediate division of risk is optimal. We find that investor preferences are more influential than those of the policymaker when degrees of risk aversion are of a similar magnitude. Efficient division of risk is of increasing importance as renewables comprise a greater share of total electricity cost. Different divisions of market price risk may thus be optimal at different stages of renewables deployment. Flexibility in FiT legislation may be required to accommodate thi

Impact Assessment Modelling for the Ocean Economy: A Review of Developments

With increasing attention being paid to the role of marine related activity in promoting sustainable economic growth as well as development in coastal areas, it is important to be able to model the impact of policy decisions in this area in an ex-ante fashion. This paper provides an overview of an Economic, Social, Spatial and Environmental (ESSE) framework developed for impact assessment of ocean related industries. The modelling approach is applied to the ocean economy of Ireland and combines proven methodologies, namely input-output modelling and microsimulation, in order to assess multi-dimensional impacts. The capabilities of the ESSE modelling framework are highlighted using policy development examples from marine renewable energy, aquaculture and fisheries

At the Interface of Isomorphous Behavior in a 3 × 3 Isomer Grid of Monochlorobenzamides: Analyses of the Interaction Landscapes via Contact Enrichment Studies

International audienceThe physicochemical properties of a 33 isomer grid of mono-chlorobenzamides (Clxx) are reported with comprehensive studies of their crystal structures and interaction environments (Clx = para-/meta-/ortho-chlorobenzoyl and x = para-/meta-/ortho-aminopyridine substitutions). The nine compound Clxx series was synthesised from the three p-/m-/o-chlorobenzoyl chlorides and three p-/m-/o-aminopyridine isomers using standard synthetic procedures. Clxx exhibits some similarities to the related Fxx and Brxx congeners e.g. the isomorphous behaviour of Clpp (para-Chloro-N'-(para-pyridyl)benzamide) with several close relatives, and there are five isomorphous pairs of Clxx and Brxx crystal structures. Notably Clmp and Clpm both crystallise with Z'=4 in space group P but show important differences. The overall lack of isomers crystallising with solvate molecules is noteworthy, except for Clmm(H 2 O). In all Clxx crystal structures, strong N-H…N hydrogen bonds form, however, Clpo also crystallises as the unexpected Clpo_O polymorph with N-H…O=C intermolecular hydrogen bonding. The Clxo triad (with ortho-pyridines) exhibits the expected cyclic N-H…N dimer formation with R 2 2 (8) hydrogen bonded rings. The H C atom type, forming weak C-H…Cl hydrogen bonds, is the only favoured interaction partner of chlorine in Clxx. Conformational analyses (gas phase) together with crystal contact enrichment studies place Clxx in context and at the interface of hydrogen and halogen bonding interactions, though strong hydrogen bonding dominates. In Clxx the interaction energies with nearest neighbours are shown to contribute to most of the lattice electrostatic energies. The melting temperatures T m show correlation with both molecular symmetry (Carnelley's rule) and total electrostatic energy of the weak interactions; in addition, these T m values can be well predicted from a linear fit combining both descriptors. In Clxx, N-H…N hydrogen bonds dominate, largely in the absence of solvates, and with five Clxx forming isomorphous pairs with Brxx analogues; Clpp being isomorphous with several close benzamide relatives. Analysis of T m reveals correlations involving both symmetry and electrostatic energies

Specifying An Efficient Renewable Energy Feed-in Tariff

This paper derives efficient pricing formulae for renewable energy Feed-in Tariff (FiT) designs that incorporate exposure to uncertain market prices by using option pricing theory. Such FiT designs are presented as a means to delineate market price risk amongst investors and policymakers when designing renewable energy support schemes. Sequential game theory provides the theoretical framework through which we model the strategic interaction of policymakers and investors during policy formulation. This model is solved using option pricing theory when a FiT is comprised of market prices combined with a guaranteed element. This solution also allows for an analytical formulation of the policy cost of subsidisation. Partial derivatives characterise sensitivity of policy cost and investor remuneration to deviations in market conditions beyond those expected. Analytical derivations provide a set of tools which may guide more efficient FiT policy and investment decisions. Numerical simulations demonstrate application for a stylised Irish case study, with a scenario analysis providing further insight into the relative sensitivity of policy cost and investor remuneration under different market conditions