Scenarios on European energy security: Outcomes of natural gas strategy in 2020

This paper adopts a futuristic methodology and analyzes the role of natural gas in European energy security in order to transform economic and policy uncertainties into meaningful scenarios. It implements “trend analysis” to forecast the volume of gas needed until 2020 by elaborating the estimates of the EU Commission and “scenario building” to come up with alternative futures forging different regional implications. The economic analysis stems from four scenarios as introduced by the EU Commission: (1) baseline scenario with average oil price of 61$/bbl; (2) baseline scenario with average oil price of 100$/bbl; (3) New Energy Policy scenario with average oil price of 61$/bbl; (4) New Energy Policy scenario with average oil price of 100$/bbl. The policy analysis is derived from the options, restraints, priorities and strategies of the concerned actors which include the EU Commission, selected EU members, suppliers and transit countries. The analysis on actors results in four policy scenarios: (1) Russia first; (2) Russia everywhere; (3) security first; (4) each for itself. The matrix, which excludes the possibility of unprecedented developments such as a drastic increase in European shale gas production or continuing global recession, clusters 16 contingencies. The paper, within this context, gives an idea on how alternative policy options of European energy security may lead to different futures based on oil prices, environmental commitments and strategic initiatives of the concerned actors.     

The first five years of the EU Impact Assessment system: a risk economics perspective on gaps between rationale and practice

In 2003, the European Commission (EC) started using Impact Assessment (IA) as the main empirical basis for its major policy proposals. The aim was to systematically assess ex ante the economic, social and environmental impacts of European Union (EU) policy proposals. In parallel, research proliferated in search for theoretical grounds for IAs and in an attempt to evaluate empirically the performance of the first sets of IAs produced by the EC. This paper combines conceptual and evaluative studies carried out in the first five years of EU IAs. It concludes that the great discrepancy between rationale and practice calls for a different theoretical focus and a higher emphasis on evaluating empirically crucial risk economics aspects of IAs, such as the value of statistical life, price of carbon, the integration of macroeconomic modelling and scenario analysis.     

Carrot or stick: Impacts of alternative climate and energy policy scenarios on agriculture

The climate and energy strategy of the European Union presents the aims for all economic sectors to cut carbon dioxide emissions. In this paper, we studied what kind of conflicts, synergies, opportunities and control measures the climate and energy policy brings to farms in Finland. We used the Delphi method to assess possible outcomes of three scenarios based on the strength of mitigation policy. The scenarios scrutinised were (1) Baseline, (2) Tight Control and (3) Energy Plus Food. These scenarios create different adaptive needs and measures on farms. Baseline scenario follows the present and forthcoming development in agriculture and Tight Control scenario, in turn, constitutes all possible mitigation measures recently introduced in the scientific discussion. In Energy Plus Food scenario, farms increasingly produce renewable energy in addition to food and, therefore, have new opportunities to develop their businesses. The Delphi panel estimated how the farms would cope with different future developments represented by the scenarios. Based on our results, it is evident that interdisciplinary analysis in research and inter-sectoral cooperation between agricultural and energy policies are required.     

The evolution of emissions trading in the European Union – The role of policy networks,knowledge and policy entrepreneurs

This paper starts with a recapitulation of how emissions trading became a cornerstone of the European Union’s climate policy. While a whole bouquet of reasons can be identified the major reasons why the EU Commission decided to pursue the establishment of an emissions trading scheme within the EU are: (1) the integration of international emissions trading into the Kyoto Protocol; (2) the failure of the 6th Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC) and the withdrawal of the United States from the Kyoto Protocol negotiations; and (3) the unsuccessful attempt to introduce an EU-wide CO₂-tax. Other reasons were the fact that emissions trading did not need unanimity in the European Council like the CO₂-tax; the economic efficiency of emissions trading which appealed not only to the Commission but also to industry and Member States; the danger of a fragmented carbon market as the United Kingdom and Denmark had already set up domestic emissions trading schemes that were incompatible; the incentive a European emissions trading scheme would be for the formation of a global carbon market; and the possibility to influence investment strategies of power companies towards a sustainable modernisation of the EU’s power generation infrastructure.Drawing upon these preconditions, this paper analyses the development of the European Union Emissions Trading Scheme (EU ETS). Based on the fact that the EU is embedded in a multi-level policy-making architecture which encourages the emergence of policy networks it is argued that the EU ETS has been shaped by an (informal) issue-specific policy network established by some staff members from DG Environment, including individuals knowledgeable on emissions trading – such as experts from consultancies, environmental NGOs and the business sector. It is argued that within this European policy network on emissions trading the European Emissions Trading Directive – as adopted on 13 October 2003 – has been negotiated and developed. It is concluded that the sharing of knowledge about this relatively new and largely unknown regulatory instrument and about design options for a potential European emissions trading scheme was the key momentum for the establishment and continuity of this policy network and that the ability of managing knowledge generation processes was the main factor to allow for a few staff members from DG Environment to play a dominant role as policy entrepreneurs in developing the European Emissions Trading Directive, even beyond their formal role of proposing the scheme as representatives from the EU Commission.     

The territorial futures of Europe: ‘Trends’, ‘Competition’ or ‘Cohesion’

The ESPON 2006 scenario project generated three integrated roll-forward scenarios (A roll-forward scenario is a scenario in which the hypotheses define the parameters at the start of the covered time period and the scenario then explores the unfolding of events based on theses hypotheses. This is opposed to a roll-backward scenario in which the situation at the end of the time period is defined and the scenario then explores the path to reach this situation.). In the trend scenario renewed efforts are made for the Lisbon strategy, demanding extra investments in R&D and education. Regional policy will also be continued with vigour. In the Competition Scenario bold decisions are made regarding Europe's continued prosperity. The Lisbon strategy takes precedence over institutional reform and other sectoral policies. In the Cohesion Scenario Europe is confronted with the challenge of fully integrating the various regions in Europe. The budgets for Regional Policy and Rural Development Policy are enhanced and targeted to the most needy regions. The scenarios are described as stories about the future, supported by model calculations and visualised by various maps. They concentrate on urban and rural development and on territorial developments in different parts of Europe, like North-West Europe, the Alpine Space and Central and Eastern Europe. In addition, a proactive, roll-back scenario explores the possibilities to combine competitiveness, cohesion and sustainability. A message, derived from the scenarios, is that independent of the explored policy options the European territory will be confronted with large challenges like a (rapid) decline of fossil energy resources and increasing impacts of climate change. The scenarios appear particularly helpful in the context of the current paradigm shift in European regional policy from a policy for balance to a policy for aggregate growth.     

Scenarios on the spatial and economic development of Europe

Countless autonomous, self-reinforcing and countervailing forces impact the future competitiveness of Europe and its spatial structure. Poignant examples include globalization, ageing and climate change, but also policy decisions taken by nation-states or the European Union. Scenarios are an appropriate method by which to explore possible future developmental pathways in a dynamic context. This contribution describes and discusses four economic policy scenarios produced by the ESPON 3.2 project and link these to the Lisbon Strategy and the European Social Model. In each scenario, a policy package is assembled from existing EU policy areas according to a particular ideological context. Afterwards, its territorial consequences are discussed in terms of socioeconomic disparities, migration and the environment. In so doing, some observations will be made regarding possible spin-offs, trade-offs and side effects of European policy when placed in a spatial context. These scenarios should hold interest for policy discussions on territorial cohesion, a concept which seeks to integrate economic development and spatial planning, as well as on European competitiveness and cohesion.     

Tax Evasion and Equity Theory: An Investigative Approach

Traditional economic theory assumes rational individuals with stable preferences who, given an array of options and probabilities, maximize their expected utility. However, experimental research finds that individuals make systematic mistakes when attempting to maximize their expected utility. The economic psychology approach includes aspects of the traditional economic approach and the psychological approach that emphasizes values, attitudes, norms, conformity and morals.This paper investigates equity theory and tax evasion using the framework of prospect theory pioneered by Tversky and Kahneman. We design an investigation to identify if individual behavior follows the usual results of prospect theory, given a scenario that frames a perception of inequity. The investigation frames a scenario to invoke a controlled tax regime. The frame varies according to which inequity is being measured, exchange or social. Once the scenario is established, a questionnaire is designed to determine how the individual responds when filing taxes. The responses to the control questions are consistent with prospect theory. However, in general the responses to the framed questions, depicting inequity, are more consistent with expected utility theory.     

Systemic scenarios of nanotechnology: Sustainable governance of emerging technologies

The economic and social promises of emerging technologies, especially nanotechnology, are assumed to be outstanding due to radical innovative features of materials, products and services. However, preliminary studies indicate that these very same features, e.g. high chemical reactivity, could entail adverse impacts on human health and the environment. Calls for appropriate regulation and societal formation of nanotechnology developments have been made, resulting in the concept of sustainable nanotechnology governance. The required anticipatory knowledge supporting these efforts seems so far to lack a sound methodological basis as well as an integrated perspective on nanotechnological applications. We present a scenario study on possible future developments of nanotechnology in Switzerland (reference year 2020). The study employed a formalized and functional scenario methodology, featuring system analysis, consistency analysis and transdisciplinary collaboration. The results indicate five different future constellations of contextual aspects, such as public awareness, profit potential and legal regulations, which are assumed to consistently correspond to five distinct market situations for nanotechnological applications. Going beyond the specific nanotechnology scenarios, the article argues for a rigorous scenario methodology as a valuable tool for the sustainable governance of emerging technologies.     

A comment on De Grauwe's, “The legacy of the Eurozone crisis and how to overcome it”

De Grauwe (2016) argues that it has been the asymmetric economic policies of the European Commission where credit nations have benefited at the expense of debtor nations that have fueled the Euro Crisis. In this short comment I provide an alternative explanation for the amplification and persistence experienced by the Eurozone economy during the double-dip recessions of 2008 to 2009 and 2011 to 2013. The Euro crisis can be traced back to contractionary monetary policies made by the European Central Bank at a time when the Eurozone required expansionary monetary policy.     

European territories confronted with climate change: Awaiting the events or timely preparation?

Today, climate change is viewed as one of the main global challenges. The EU has become a major player in the political arena and seeks to reach worldwide agreements on ‘mitigation’ policies to reduce greenhouse gas emissions. Despite speaking with one voice at the global scale, the effects of climate change on European territories vary widely according to local circumstances. The ESPON scenarios explore what those impacts could be, and what effect EU climate change adaptation policies would have. The first scenario envisions an EU policy limited to emergency funds following extreme events like floods and droughts. In the second scenario, the EU takes a much more proactive stance by funding radical and costly adaptation strategies. The exercise demonstrates the difficulty in identifying the cost-effectiveness of each approach. Territorial effects are often indirect and affect a variety of economic, social and ecological systems. Moreover, a great deal of uncertainty exists surrounding their magnitude and timing.     

Exploring long-term business climates and strategies with interax

A major objective of corporate strategic planning is to minimize the surprises the future may bring, and INTERAX (developed at the Center for Futures Research with industrial sponsorship) draws on cross-impact matrices and scenario generation to allow alternative futures to be explored. This paper outlines the method, and summarizes part of the present database—a Delphi study of possible social, economic, and political developments, internationally and within the USA.     

The Cascade of Fear: Policy Implementation and Financial Management Reform in the European Commission

The complexity of managing European Union (EU) spending programmes is the subject of much comment but relatively little academic analysis. Using a multi‐disciplinary analytical framework drawn from the management, policy and social sciences, this fieldwork‐based case study examines the reform of financial management within the European Commission. In constructing an agent focussed narrative of a specific reform episode, it contributes to a growing literature on public management reform analysed from this perspective and also to the lightly developed field of EU financial management.     

The High‐Frequency Response of the EUR‐USD Exchange Rate to ECB Communication

We investigate the impact of the European Central Bank's monetary policy communication during the press conference held after the monthly Governing Council meeting on the EUR‐USD exchange rate in high frequency. Based on the method of Content Analysis, we construct communication indicators for the introductory statement and find that communication with respect to future price developments is most relevant. In response to statements about increasing risks to price stability the EUR appreciates on impact. To the contrary, communication about economic activity and monetary aggregates does not generate significant exchange rate reactions.     

India’s strategic future: 2025

Based on the geopolitical developments in India’s neighbouring countries and India’s response to them, this paper depicts four scenarios—Storms and Fires, Rainbow in the Sky, Light and Shadows and Across Space. Each scenario explores a set of possible events and the consequences triggered by it. While Storms and Fires is based on the rise of a sharp nationalist Indian sentiment in the face of heightened security tensions in the region, Across Space outlines the future of India’s worldview shaped by the present government’s policy of US primacy. Light and Shadows is based on differential policy towards neighbours—conflict with Pakistan and cooperation with other neighbours. This scenario is predicated on the supremacy of economic objectives whereas Rainbow in the Sky is based on the regional cooperation as the primary guiding force of the Indian foreign policy. Though major geopolitical events in its neighbourhood will impact the immediate future of India, India’s response and internal strengths and weaknesses will determine its long-term future. It is therefore essential for the country to develop a well considered trajectory of its strategic options for the next 25 years.     

货币、财政和宏观审慎政策的协调搭配研究

本文通过构建包含多部门和多元宏观政策的DSGE模型,对货币政策、财政政策和宏观审慎政策的最优反应规则及其协调组合问题进行了分析。分析结果显示:(1)从社会福利最大化的角度,货币政策可继续盯住通胀和产出的稳定,政府支出和税收政策可分别重点盯住产出稳定和债务稳定,而宏观审慎政策则可重点关注以信贷利差和信贷波动为代表的关键金融变量;(2)货币政策、财政政策和宏观审慎政策,通过合理的搭配和组合使用,能比任何单一政策工具都具有更好的经济金融稳定效应;反之,政策之间的不协调将显著削弱彼此的调控效应,加大经济和金融波动,从而导致显著的社会福利损失;(3)从多种政策协调搭配产生“合力”的内在机制来看,财政政策主要通过增加对产出、通胀、就业和债务等变量的稳定效应,对货币政策产生额外助力,而宏观审慎政策则主要通过稳定金融体系和降低金融风险对货币政策产生助力。上述结论表明,在多种经济金融政策并存的情况下,基于良好设定的政策规则,同时加强政策各部门之间的协调合作,是确保多元政策产生积极合力的重要基础。     

经济政策不确定性、声誉机制与信用评级

本文以2007-2019年我国企业债券为样本,采用有序Probit回归模型探讨经济政策不确定性对信用评级的影响,研究结果表明：(1)经济政策不确定性的增加会促使评级机构显著降低信用评级,这种影响因产权性质存在显著差异,而且在债券市场刚性兑付被打破后更为显著;(2)声誉机制对上述影响产生积极的调节效应,声誉受损或声誉水平较高的评级机构会更加谨慎地评估经济政策不确定性的影响效应。基于此,政府应合理管控政策的出台和调整以增强社会预期,监管机构要不断强化对评级机构的监管,促使评级机构提高信用评级的质量。     

Impacts of Immigration on an Ageing Welfare State: An Applied General Equilibrium Model for France

Immigration is often seen as an instrument of adaptation for ageing countries. In this paper, we evaluate, using a dynamic general equilibrium model, the contribution of migration policy in reducing the tax burden associated with the ageing population in France. Four alternative scenarios, compared with a baseline scenario based on official projections, are simulated with the aim of quantifying the effects of immigration on French social protection finances. We show that the age and, to a lesser extent, the skill structure of immigrants are the key features that mainly determine the effects on social protection finances. Overall, these effects are all the more positive in the short to medium term if the migration policy is selective (in favour of more skilled workers). In the long term, the beneficial effects of a selective policy may disappear. But whatever the degree of selectivity of the migration policy, the financial gains from higher consequent migration flows are relatively moderate compared with the demographic changes implied by ageing.     

Use of explorative scenarios in environmental policy-making—Evaluation of policy instruments for management of land, water and the built environment

In order to achieve the Swedish Environmental Quality Objectives (EQOs), three action strategies have been adopted by the Swedish parliament. The strategy addressed in this paper deals with the management of land, water and the built environment. The paper reports on a project involving authorities and researchers in which policy measures required for achieving relevant targets for the strategy were gathered, structured and analysed regarding their potential assuming alternative futures. Measures with proposed policy instruments were qualitatively evaluated against one business as usual scenario and four explorative scenarios varying along two dimensions; level of governance and level of embeddedness. The results show a heavy predominance of administrative policy instruments. This policy strategy depends on a future development where such policy instruments are accepted. In order to achieve the EQOs regardless of future developments, more robust packages of measures including a larger variation in policy instruments need to be developed.     

Using scenarios to explore UK upland futures

Uplands around the world are facing significant social, economic and environmental changes, and decision-makers need to better understand what the future may hold if they are to adapt and maintain upland goods and services. This paper draws together all major research comprising eight studies that have used scenarios to describe possible futures for UK uplands. The paper evaluates which scenarios are perceived by stakeholders to be most likely and desirable, and assesses the benefits and drawbacks of the scenario methods used in UK uplands to date. Stakeholders agreed that the most desirable and likely scenario would be a continuation of hill farming (albeit at reduced levels) based on cross-compliance with environmental measures. The least desirable scenario is a withdrawal of government financial support for hill farming. Although this was deemed by stakeholders to be the least likely scenario, the loss of government support warrants close attention due to its potential implications for the local economy. Stakeholders noted that the environmental implications of this scenario are much less clear-cut. As such, there is an urgent need to understand the full implications of this scenario, so that upland stakeholders can adequately prepare, and policy-makers can better evaluate the likely implications of different policy options. The paper concludes that in future, upland scenario research needs to: (1) better integrate in-depth and representative participation from stakeholders during both scenario development and evaluation; and (2) make more effective use of visualisation techniques and simulation models.