Economies of scale in Norwegian electricity distribution: a quantile regression approach

In this article, we investigate scale economies in Norwegian electricity distribution companies using a quantile regression approach. To the best of our knowledge, this is the first attempt to apply this estimation technique when analysing scale economies. We estimate the cost elasticities of the two output components: network length and number of customers, to calculate returns to scale. Our results show large potential of scale economies, particularly for the smallest companies. We also find that returns to scale is increasing over time. These findings have important implications for policymakers when they are deciding the structure of the industry in the future.     

Forecasting the diffusion of photovoltaic systems in southern Europe : A learning curve approach

Most analysts disagree upon whether photovoltaic systems (PV) will be able to play an important role in the energy scenarios of the future. A few scholars also question the appropriateness of policies that envisage the use of public subsidies to stimulate the growth of this industry and to accelerate market penetration. This paper contributes to this debate by examining whether carefully designed policies may initiate a process of large-scale diffusion of grid-connected PV, even without the deployment of external subsidies. Building upon a disaggregated characterization of the electricity market, it takes endogenously into account the learning curve phenomenon and simulates the diffusion of PV building-integrated systems in five European countries. The analysis is restricted to crystalline silicon systems and is repeated under four different macroeconomic scenarios corresponding to four different energy policies. The results suggest that already today there are opportunities for PV diffusion in many islands of the Mediterranean region, which may trigger sufficient scale economies to render the technology competitive in larger markets. They also show that the diffusion process could be accelerated through the implementation of carbon-tax policies that support initial penetration. The environmental benefits (net avoided CO₂ emissions over the system life cycle) associated with the forecasted penetration are also evaluated.     

A note on the diffusion of innovation

The paper deals with the process of substitution between technologies in a framework of increasing returns to scale. The approach stresses the interaction between capacity expansion and market demand as explanations of the diffusion of technologies into their niches. The demand and supply sides of the diffusion process are therefore brought together to determine simultaneously patterns of output and prices.It analyzes the dynamics of the substitution path, where a logistic diffusion process for the new technology is assumed, and determines the substitution curve between the old technology and the new one.     

A percolation model of eco-innovation diffusion: The relationship between diffusion, learning economies and subsidies

An obstacle to the widespread adoption of environmentally friendly energy technologies such as stationary and mobile fuel cells is their high upfront costs. While much lower prices seem to be attainable in the future due to learning curve cost reductions that increase rapidly with the scale of diffusion of the technology, there is a chicken and egg problem, even when some consumers may be willing to pay more for green technologies. Drawing on recent percolation models of diffusion, we develop a network model of new technology diffusion that combines contagion among consumers with heterogeneity of agent characteristics. Agents adopt when the price falls below their random reservation price drawn from a lognormal distribution, but only when one of their neighbors has already adopted. Combining with a learning curve for the price as a function of the cumulative number of adopters, this may lead to delayed adoption for a certain range of initial conditions. Using agent-based simulations we explore when a limited subsidy policy can trigger diffusion that would otherwise not happen. The introduction of a subsidy policy seems to be highly effective for a given high initial price level only for learning economies in a certain range. Outside this range, the diffusion of a new technology either never takes off despite the subsidies, or the subsidies are unnecessary. Perhaps not coincidentally, this range seems to correspond to the values observed for many successful innovations.     

Economies of scale in the Australian tourism industry

The measurement of economies of scale in the tourism industry has not been done to this point, as tourism is not a specific industry according to international statistical standards. Among many industries related to tourism, four sectors (accommodation, transport, retail trade and recreational services) across six states and two territories from 1997 to 2007 are studied as they contribute nearly 70% of tourism output in Australia. By comparing regression results from the Cobb–Douglas (C–D) production function and the translog production function, we find that there is evidence of increasing returns in transport, retail trade and recreational services at the industry level. However, accommodation is characterized by constant returns to scale at the industry level. As accommodation is responsible for the biggest share of tourism output, this suggests that overall the tourism sector is not characterized by increasing returns. We also find that the degrees of returns to scale from the C–D and translog production functions are different and that the imposition of input share also influences the empirical results. Both of these factors stress the importance of model specification to the measurement of economies of scale.     

Indeterminacy Arising in Multi-sector Economies

We characterize a large class of constant-returns-to-scale economies with standard Cobb–Douglas production technologies, which, when perturbed to incorporate external effects, exhibit indeterminacy or multiple equilibria. The perturbations are constrained to maintain overall constant returns to scale. We characterize the magnitude of the external effects that yield multiple equilibria in terms of the parameters of the unperturbed economy. We show that it is very easy to construct large and plausible classes of economies that exhibit indeterminacy with constant returns to scale, and with external effects that are arbitrarily small.
JEL Classification Numbers: E00, E3, O40.     

Demand-supply coevolution with multiple increasing returns: Policy analysis for unlocking and system transitions

Currently, there is much concern about how to make a transition away from environmentally unsustainable activities to sustainable ones, notably in agriculture, energy and transport sectors. The success of such a transition depends on whether one is capable of escaping the lock-in of the dominant, unsustainable technology, which is usually due to multiple lock-in factors. Here, we present a formal model to study the likelihood of market lock-in in the presence of multiple increasing returns. The proposed framework describes coevolving populations of boundedly rational consumers and innovating firms. On the demand side, we focus attention on the interdependence of consumer preferences. We examine the impact of alternative demand side specifications on the direction of innovative activities of firms. On the supply side, a technological trajectory arises from the interplay of incremental innovation, search for a new product design and marketing activities. Our framework provides a general and complete account of increasing returns on supply and demand sides, as well as their synergetic interactions. The model is used to study a number of policy instruments aimed at escaping lock-in.     

Technological change in energy systems: Learning curves, logistic curves and input-output coefficients

Learning curves have recently been widely adopted in climate-economy models to incorporate endogenous change of energy technologies, replacing the conventional assumption of an autonomous energy efficiency improvement. However, there has been little consideration of the credibility of the learning curve. The current trend that many important energy and climate change policy analyses rely on the learning curve means that it is of great importance to critically examine the basis for learning curves. Here, we analyse the use of learning curves in energy technology, usually implemented as a simple power function. We find that the learning curve cannot separate the effects of price and technological change, cannot reflect continuous and qualitative change of both conventional and emerging energy technologies, cannot help to determine the time paths of technological investment, and misses the central role of R&D activity in driving technological change. We argue that a logistic curve of improving performance modified to include R&D activity as a driving variable can better describe the cost reductions in energy technologies. Furthermore, we demonstrate that the top-down Leontief technology can incorporate the bottom-up technologies that improve along either the learning curve or the logistic curve, through changing input-output coefficients. An application to UK wind power illustrates that the logistic curve fits the observed data better and implies greater potential for cost reduction than the learning curve does.     

中国碳锁定效应的测度指标体系构建与实证分析

从固定投入、技术、制度、社会行为四个维度构建碳锁定效应的测度指标体系,并建立实码加速遗传算法的投影寻踪模型(RAGA-PP模型),进而测度并实证分析中国碳锁定效应水平。与以往研究不同的是:借助评价指标体系有助于更为系统、全面地度量碳锁定效应;运用RAGA-PP模型有助于克服权重判定的主观性、早熟收敛等问题。主要研究结论为:除社会行为锁定程度不断加强外,中国的总碳锁定水平、技术锁定水平、制度锁定水平均呈现显著下降的趋势;东部省份碳锁定整体最弱,西部地区最强,而中部和西部各省份两极分化严重;提升低碳技术推广与运用成效,加大政府对于节能减排科技的投入力度,增加碳科技创新和技术转移与经济社会发展结合的紧密度等是碳解锁的首要路径。     

EXTERNAL ECONOMIES IN TAIWAN'S MANUFACTURING INDUSTRIES

This paper presents estimates of indexes of internal returns to scale and external economies for two-digit manufacturing industries in Taiwan. Estimating the returns to scale indexes involves using both SUR and 3SLS estimation procedures. The data strongly support the presence of external increasing returns to scale. The findings indicate no evidence of internal increasing return in all two-digit manufacturing industries. According to the endogenous growth literature, the existence of externalities in production bears important economic implications in some aspects of economic growth, even though the data cannot distinguish the transmission mechanism.