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A Note on Measuring Household Welfare Effects of Time-of-Use (TOU) Pricing

Chi-Keung Woo

Year: 1984
Volume: Volume 5
Number: Number 3
DOI: 10.5547/ISSN0195-6574-EJ-Vol5-No3-12
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Abstract:
Several recent studies address the issue of household welfare effects caused by the implementation of time-of-use (TOU) pricing of electricity (for example, see Aigner and Lillard, 1982; Aigner and Learner, 1982; Parks, 1983; and Caves et al., 1983). In these studies, the historical average price is used to assess the household welfare change. Implicit in their approach is the assumption that the original electricity rate structure is a flat one. In fact, however, the common rate structure is multitier, frequently an inverted block. While the literature on demand for electricity includes extensive discussions of whether the average price or the marginal price is the correct price signal to a residential customer (e.g., Taylor, 1975; Nordin, 1976; Terza and Welch, 1982; and Billings, 1982), little attention has been given to evaluating welfare change resulting from TOU pricing.



Incomplete International Climate Agreements: Optimal Carbon Taxes, Market Failures and Welfare Effects

Rolf Golombek and Jan Braten

Year: 1994
Volume: Volume15
Number: Number 4
DOI: 10.5547/ISSN0195-6574-EJ-Vol15-No4-7
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Abstract:
This paper provides an empirical study of optimal carbon taxes and welfare effects under incomplete international climate agreements when there are market failures in the cooperating countries. The objective of the group of countries taking part in the international climate agreement is to design carbon taxes that maximize their aggregate net income, subject to a constraint on global CO2 emissions. We use a numerical energy model to study scenarios that differ with respect to types of CO2 taxes and countries taking part in the climate agreement. We also discuss the impact on regional net income following from different international climate agreements.



Costs Savings of a Flexible Multi-Gas Climate Policy

Asbjorn Aaheim, Jan S. Fuglestvedt and Odd Godal

Year: 2006
Volume: Multi-Greenhouse Gas Mitigation and Climate Policy
Number: Special Issue #3
DOI: 10.5547/ISSN0195-6574-EJ-VolSI2006-NoSI3-25
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Abstract:
Current climate policies are based on the use of Global Warming Potentials (GWPs) to compare emissions of various greenhouse gases. Yet, from an economic point of view, more efficient methods exist. We compare the potential costs of implementing some long-term goal for stabilization of the climate in three cases: Reduce CO2 emissions only, reduce emissions of the four greenhouse gases CO2, CH4, N2O and SF6 using the standard IPCC GWPs and reduce emissions of the same four gases with efficient and flexible, time dependent metrics. A multi-gas approach with GWPs reduces the costs by 8 percent when compared with CO2 reductions only, whereas the costs may be reduced by an additional 2 percent if using flexible metrics. If compared with the use of GWPs, we find that efficient weights increase the cost savings of including non-CO2 gases in climate policy by 15-40%, depending on the stabilization goal.





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