Optimally Rewarding Countries for Reducing Fossil Fuel Supply and Demand: A Time Consistency Problem

2021 ◽  
Author(s):  
Lennart Stern
Keyword(s):  
Fossil Fuel ◽  
Supply And Demand ◽  
Time Consistency ◽  
Fuel Supply ◽  
Consistency Problem

Consistent Allocation of Emission Responsibility in Fossil Fuel Supply Chains

2021 ◽  
Author(s):  
Sanjith Gopalakrishnan ◽  
Daniel Granot ◽  
Frieda Granot
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Fossil Fuel ◽  
Subgame Perfect Equilibrium ◽  
Polynomial Time Algorithm ◽  
Noncooperative Game ◽  
Theoretic Model ◽  
Directed Tree ◽  
Implementation Framework ◽  
Fuel Supply

Since 2016, Canada’s federal government has pledged to factor in upstream emissions during the environmental impact assessment of fossil fuel energy projects. The upstream emissions attributable to a proposed project could be compared against a rejection threshold—a maximum permissible level of emissions—or the firm could be mandated to offset the attributed emissions. We adopt a cooperative game-theoretic model and propose the nucleolus mechanism to apportion upstream emission responsibilities in a fossil fuel supply chain, represented by a directed tree, wherein the nodes correspond to various entities in the supply chain such as extractors, distributors, refineries, and end consumers. The nucleolus allocation avoids the distortionary effects of double counting and exhibits a certain consistency property that is especially important in a regulatory context wherein fossil fuel supply chains span multiple legal jurisdictions. We develop a polynomial-time algorithm to compute the nucleolus and further prove that it arises as the unique subgame perfect equilibrium allocation of a noncooperative game induced by two easily stated and verifiable policies, thereby providing an implementation framework. We then demonstrate the strong Nash stability of the nucleolus mechanism subject to the two policies, study its sensitivity to parameter changes, and characterize it on the basis of fairness considerations. Furthermore, under the common assumption that the emissions allocated to a firm and the resulting financial penalties do not impact the revenues from the firm’s core operations, we also provide lower-bound guarantees on the welfare gains it delivers to firms in the fossil fuel supply chain and on the incentives it offers such firms to adopt emission abatement technologies. Finally, we contextualize our discussion with a case study on a proposed expansion of the Trans Mountain pipeline in Western Canada. This paper was accepted by Chung Piaw Teo, optimization.

scholarly journals Curbing fossil fuel supply to achieve climate goals

2020 ◽  
Vol 20 (8) ◽  
pp. 881-887
Author(s):  
Georgia Piggot ◽  
Cleo Verkuijl ◽  
Harro van Asselt ◽  
Michael Lazarus
Keyword(s):  
Fossil Fuel ◽  
Fuel Supply

scholarly journals Market situation of Bio-Briquette in Kathmandu, Nepal

2014 ◽  
Vol 5 ◽  
pp. 55-62 ◽  
Author(s):  
Krishna Bahadur Bhujel
Keyword(s):  
Fossil Fuel ◽  
Supply And Demand ◽  
Scale Up ◽  
High Potential ◽  
Biomass Energy ◽  
Economic Empowerment ◽  
Kathmandu Valley ◽  
Initial Stage ◽  
Market Situation ◽  
Demand Condition

This paper analyzes the present market scenario of the bio-briquette in the Kathmandu valley. The bio-briquette has been emerged as alternative biomass energy in the Nepal from one decade. But it does not scale up as per targets due to the lack of the awareness, technologies transfer and markets. There are opportunities to establish and replace fossil fuel through using wastage vegetations as well as economic empowerment of local people. It has found that the market situation of the bio-briquette is initial stage. Now, the supply and demand condition is increased trends and it is available in super market, department store and other outlets in the Kathmandu valley. It uses especially in the cooking, heating for children/older, house and office purposes. It is high potential to establish as alternative biomass energy in Nepal through promoting the sustainable markets. DOI: http://dx.doi.org/10.3126/init.v5i0.10254   The Initiation 2013 Vol.5; 55-62

In Closing

2018 ◽  
Author(s):  
Matthias Gross ◽  
Debra J. Davidson
Keyword(s):  
Energy Supply ◽  
Fossil Fuel ◽  
Supply And Demand ◽  
Climate Justice ◽  
Energy Planning ◽  
Social Scientists ◽  
Energy Poverty ◽  
Black Boxes ◽  
The Many ◽  
Middle Class Families

This chapter summarizes the key contributions offered by the authors of the present volume and calls on social scientists to open up the many black boxes that may prevent further understanding of complex energy-society systems, and to use those insights in energy planning. It discusses some of the book’s major themes with respect to energy supply and demand, focusing on the pressures and opportunities for continued development of fossil-fuel resources, the agreement among authors that renewable energy will not be a panacea, the link between energy poverty and climate justice, and the overriding tendency to attribute responsibility for changing energy consumption to middle-class families by voluntary means. The chapter also considers the influence of shifts in supply and demand on markets, politics, and governance, along with the implications of technological optimism for energy-society relations.

Prospects for fossil fuels in 2019

2018 ◽  
Keyword(s):  
Fossil Fuels ◽  
Fossil Fuel ◽  
Supply And Demand ◽  
Content Type

Subject Prospects for fossil fuels in 2019. Significance Fossil fuel markets will continue to face volatility owing to the uncertain outlook for both supply and demand.

scholarly journals Environmental Regulation of  Firms that Experience Dynamic  Inconsistency

2021 ◽  
Author(s):  
◽  
James Zuccollo
Keyword(s):  
Environmental Regulation ◽  
Optimal Taxation ◽  
Dynamic Game ◽  
Time Consistency ◽  
Behavioural Economics ◽  
Time Inconsistency ◽  
Tax Rate ◽  
Taxation Policy ◽  
Course Of Action ◽  
Consistency Problem

<p>The recent push for environmental regulation has invigorated the discussion of mechanism design and optimal taxation policy. Recent decades have also seen growing interest in behavioural economics and empirically based theory. In this thesis we take a step towards combining the two by asking how a regulator may correct an externality in situations where they have a time consistency problem. Time inconsistency is one of the notable developments of behavioural economics. It posits that an agent’s decisions do not remain consistent over time, which causes a utility loss if the agent cannot commit themselves to a particular course of action and stick to it. The solution to inconsistency problems is to precommit to a course of action and prevent future deviations from it. However, finding a mechanism to enable such precommitment is often problematic. A regulator who maximises welfare can have a time consistency problem because welfare will depend on the decisions of firm and households who may themselves be inconsistent. That inconsistency then propagates to the regulator’s decision and reduces the level of welfare that the regulator can reach. Alternatively, the regulator’s time consistency problem can be caused by non-stationarity in their time preferences. To reach the firstbest outcome the regulator must not only eliminate the environmental externality: they must also overcome their own time inconsistency problem. This thesis draws from the literature on strategic delegation to construct a taxation game in which the regulator can achieve the first best taxation regime without the need for external precommitment devices. We study a dynamic game where the regulator chooses a tax rate and the regulated monopolist chooses their price. We show that the Markov-perfect equilibrium price path of this game will replicate the first best plan. Our results holds for time inconsistency caused by both jump states and quasihyperbolic discounting.</p>

scholarly journals Environmental Regulation of  Firms that Experience Dynamic  Inconsistency

2021 ◽  
Author(s):  
◽  
James Zuccollo
Keyword(s):  
Environmental Regulation ◽  
Optimal Taxation ◽  
Dynamic Game ◽  
Time Consistency ◽  
Behavioural Economics ◽  
Time Inconsistency ◽  
Tax Rate ◽  
Taxation Policy ◽  
Course Of Action ◽  
Consistency Problem

<p>The recent push for environmental regulation has invigorated the discussion of mechanism design and optimal taxation policy. Recent decades have also seen growing interest in behavioural economics and empirically based theory. In this thesis we take a step towards combining the two by asking how a regulator may correct an externality in situations where they have a time consistency problem. Time inconsistency is one of the notable developments of behavioural economics. It posits that an agent’s decisions do not remain consistent over time, which causes a utility loss if the agent cannot commit themselves to a particular course of action and stick to it. The solution to inconsistency problems is to precommit to a course of action and prevent future deviations from it. However, finding a mechanism to enable such precommitment is often problematic. A regulator who maximises welfare can have a time consistency problem because welfare will depend on the decisions of firm and households who may themselves be inconsistent. That inconsistency then propagates to the regulator’s decision and reduces the level of welfare that the regulator can reach. Alternatively, the regulator’s time consistency problem can be caused by non-stationarity in their time preferences. To reach the firstbest outcome the regulator must not only eliminate the environmental externality: they must also overcome their own time inconsistency problem. This thesis draws from the literature on strategic delegation to construct a taxation game in which the regulator can achieve the first best taxation regime without the need for external precommitment devices. We study a dynamic game where the regulator chooses a tax rate and the regulated monopolist chooses their price. We show that the Markov-perfect equilibrium price path of this game will replicate the first best plan. Our results holds for time inconsistency caused by both jump states and quasihyperbolic discounting.</p>

Has China's Foreign Energy Quest Enhanced Its Energy Security?

2011 ◽  
Vol 207 ◽  
pp. 600-625 ◽  
Author(s):  
Chen Shaofeng
Keyword(s):  
Energy Security ◽  
Fossil Fuel ◽  
Chinese Government ◽  
Oil Companies ◽  
Fuel Supply ◽  
National Oil Companies ◽  
The Impact

AbstractIn recent years China's national oil companies (NOCs) have proactively ventured abroad to look for more fossil fuel supply. Despite the divided views on their foreign energy quest, previous studies tend to consider the Chinese government and its NOCs to be a monolithic organism, and explicitly or implicitly presuppose that the Chinese NOCs' foreign energy quest could enhance China's energy security. This is, however, an untested hypothesis. To fill the gap, this article assesses the impact of Chinese NOCs' foreign energy quest on the country's energy security. Findings show that the Chinese NOCs have made some progress in their foreign energy quest, which contributes to their coffers and reserves, but that does not mean that China's energy security is greatly enhanced; in particular, the diversity and reliability of China's foreign oil sources are questionable.

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