Gerard Duchene

The Factors Behind CO2 Emission Reduction in Transition Economies

Les pays en transition ont considerablement reduit leurs emissions de CO2 entre 1995 et 2003. Cette performance est-elle due a l’application d’une politique volontariste de la part des gouvernements, ou bien est-elle un simple effet collateral de la transformation industrielle majeure subie par ces pays ? Nous tentons de repondre a cette question en developpant deux equations structurelles pour la demande (emissions) et l’offre (politique) de pollution. L’equation de l’offre prend en compte la qualite institutionnelle du pays, aussi bien que les preferences des consommateurs pour la qualite de l’environnement. Nos resultats montrent que, toutes choses egales par ailleurs, l’effet d’echelle de la production seul aurait explique une augmentation de 31 % des emissions industrielles de CO2 dans les pays en transition entre 1995 et 2003, et l’effet de structure de la production aurait contribue a une augmentation de 8,4 % de ces emissions. Cependant, l’effet technique, qui decoule de la severite de la politique environnementale, s’est traduit par une reduction de 58 % des emissions industrielles de CO2, et a permis ainsi une reduction nette des emissions industrielles de CO2 de 18 % en 2003 par rapport a 1995. Enfin, notre etude confirme l’importance des facteurs institutionnels dans l’explication des emissions dans les pays en transition.The Central and Eastern European countries significantly reduced their CO2 emissions between 1995 and 2003. Was this emission reduction just the fortuitous result of the major economic transformation undergone by countries in transition? Or is it rather a result of more stringent environmental policy? The objective of the article is to answer this question through a simultaneous equation model of the demand (emissions) and supply (environmental stringency) of pollution. The supply equation takes into account the institutional quality of the country as well as consumer preferences for environmental quality. The results indicate that, all else equal, output growth would have increased CO2 industrial emissions in the Central and Eastern European countries in our sample by 31% between 1995 and 2003, and the composition effect corresponded to an increase of 8.4% of these emissions. Nevertheless, the technique effect, induced by more stringent environmental policy, reduced industrial CO2 emissions by 58%, and allowed for a final beneficial result for the environment, i.e., -18% of industrial CO2 emissions in 2003 compared to 1995. Finally, our study confirms the importance of institutional factors in the explanation and further prediction of pollution reduction in transition economies.

An Integrated Levelized Cost model for power generation

This study aims to explore the overall cost of electricity generation in the connected network of power plants and propose a financial framework for its calculation. Although, cost calculations are often run by each individual power plant investor, such calculations are not usually conducted with a holistic view of a nation-wide network of power plants. The proposed model is based on Levelized Cost Method, which can be extended to other countries by substituting the underlying data.