Conference Agenda

While research has considered the labor market consequences of environmental and climate policies in developed countries, empirical evidence for developing countries is largely missing. This paper uses rich firm-level data for all economic sectors in Vietnam to analyze the employment effects of energy prices. We take advantage of the fact that energy prices have been under relatively strong state influence. Utilizing an instrumental variable approach, we find effects that are heterogeneous across sectors, indicating regulation-induced structural changes. Although energy price increases entailed layoffs in manufacturing firms, additional jobs were created in firms in service sectors. As a result, employment in the whole economy tended to remain unaffected. This result is notable as Vietnam has been associated with a comparative advantage in relatively labor- and pollution-intensive production. Layoffs were particularly pronounced in large or trade-exposed firms and in energy-intensive sectors. They were also more common in foreign than in state-owned firms.

The aim of our paper is to investigate if there is robust evidence of a significant pass-through effect caused by the rise of carbon price (as one of the leading tools used to incentivize the transition to a low-carbon economy), as well as other factors related to the energy market and climate policies to the electricity prices. Our analysis covers all the 27 EU countries over the period 2013-2021, which accounts for the 3rd EU ETS stage. The study employs a panel data framework comprising two dependent variables (electricity price for household consumers and for non-household consumers) and a pool of 22 candidate variables. The research outcomes indicate that the EU ETS annual average auction price and its fiscal effects exert a statistically significant influence on the electricity prices for households but no impact on the non-household sector’s prices. As for energy and environmental taxes, or the use of renewable energy they rely on the same pattern. On the other hand, the price of graphite and carbon, uranium, and bituminous coal and lignite as critical metals for the de-carbonization of the energy sector are statistically significant and positively determine the price of electricity for both analyzed groups. Thus, higher prices of core energy materials are pass-through in the electricity prices.

The dynamics of long-run energy efficiency are often captured by a stochastic trend component in energy consumption, but no attempt has so far been made to connect this trend with its possible causes. We develop a new approach to explore the role of two potential sources influencing the observed trend in energy consumption, economic growth, and energy price. In this way, we bridge two strands of research, one focused on the statistical characterisation of energy efficiency and the other analysing short-term determinants of energy consumption. Our methodology is based on linear state-space modelling and consists in the systematic comparison of models incorporating alternative sets of regressors. Using this approach, we are able: first, to characterise the nature of the trend in the UK industrial energy demand; second, to quantify the extent to which the observed shape in the trend is due to price effects; and third, to determine how this relationship with price has evolved over time. Applying our methodology to nearly 50 years of UK data, we find robust evidence that price in the short-term period is important for energy efficiency to the extent that it exactly offsets the surge in energy consumption induced by economic growth. However, in the long-term, energy efficiency is predominantly imputable to exogenous technological progress not directly induced by the dynamics of energy prices. When we examine the stability of price elasticity, we conclude that in the UK it has remained constant over the last half a century.

We demonstrate an innovative method to assess the impacts of widespread, long duration (WLD) interruptions to electricity customers served by Commonwealth Edison (ComEd), Illinois’ largest electric utility. We developed surveys to collect ComEd residential and nonresidential customer responses to hypothetical blackouts, identifying and classifying mitigating/resilience behaviors and quantifying their associated costs and benefits, and scaling up the results to the broader regional economy. The latter information is used to specify shocks to an interregional computational general equilibrium (CGE) model, with which we simulate the economy-wide consequences of power interruptions and attendant customer responses including renting backup generators and relocating to other areas. Economic consequences are severe: 1-, 3- and 14-day interruptions reduce the ComEd service area’s 3-month gross domestic product (GDP) by $1.8 Bn (1.3%), $3.7 Bn (2.6%) and $15.2 Bn (10.4%), respectively, These impacts are overwhelmingly attributable to disequilibrium responses, such as backup power generation (71%-88%). Doubling the penetration of this resilience tactic moderates GDP losses by 11%-14%, with the smallest effect associated with the longest interruption duration. The information generated from this type of approach can help utility staff and policymakers estimate the economic benefits—in the form of avoided losses—of proposed investments in power system resilience.