Essays in Energy and Environmental Economics
Date
2018
Authors
Advisors
Journal Title
Journal ISSN
Volume Title
Repository Usage Stats
views
downloads
Abstract
This dissertation includes three papers discussing different aspects of environmental and energy economics and policy. The first paper ("Peaking Interest: How awareness drives the effectiveness of time-of-use electricity pricing") analyzes what factors drive consumer responses to time-of-use electricity pricing. Such pricing is an increasingly common policy that is designed to reduce reliance on high-cost, inefficient, and often polluting power plants. Using both survey and meter data on Irish households, I find that behavioral factors drive consumer responses: consumer awareness and information are key to inducing responses, and marginal prices have minimal effects.
The second paper ("Prices versus Quantities with Policy Updating", with William Pizer) is a theoretical study considering how intertemporal trading ("banking") under cap-and-trade style policies changes the traditional trade-off between price and quantity regulation (Weitzman 1974). Our theoretical model illustrates an unappreciated advantage of quantity regulation: expected policy updates are incorporated immediately through secondary markets via a no arbitrage condition. This helps us understand the welfare implications of observed price volatility in permit markets and has implications for the design of environmental regulations, such as the debate over the relative merits of a carbon tax versus "cap and trade'' policy.
The third paper ("Trophy Hunting vs. Manufacturing Energy: The Price Responsiveness of Shale Gas", with Richard Newell and Ashley Vissing) uses well-level data to estimate how the shale revolution has changed the price responsiveness of U.S. natural gas supply. We find that U.S. natural gas supply is approximately three times more price responsive as a result of the shale revolution, owing entirely to higher production per well. This improves our understanding of the market dynamics around natural gas supply.
Each of these papers has implications for environmental and energy policy. The first paper aims to understand how to improve the effectiveness of time-of-use electricity pricing policies. The second paper addresses an important feature of climate policy design, given high observed volatility in carbon allowance prices in the United States and Europe. The third paper aims to improve understanding of the recent changes in U.S. natural gas markets, with important implications for the fuel mix in electricity generation (in particular, coal-fired versus gas-fired generation) and hence CO2 emissions.
Type
Department
Description
Provenance
Subjects
Citation
Permalink
Citation
Prest, Brian Charles (2018). Essays in Energy and Environmental Economics. Dissertation, Duke University. Retrieved from https://hdl.handle.net/10161/16845.
Collections
Except where otherwise noted, student scholarship that was shared on DukeSpace after 2009 is made available to the public under a Creative Commons Attribution / Non-commercial / No derivatives (CC-BY-NC-ND) license. All rights in student work shared on DukeSpace before 2009 remain with the author and/or their designee, whose permission may be required for reuse.