Jevgenijs Steinbuks

Paying the Price for Unreliable Power Supplies: In-House Generation of Electricity by Firms in Africa

This paper documents the prevalence of in-house generation of electric power by firms in Sub-Saharan Africa and attempts to identify the underlying causes. The analysis is based on two data sources. The UDI World Electric Power Plants Data Base (WEPP), a global inventory of electric power generating units, provides a detailed inventory of in-house generation at the country level. The World Banks Enterprise Survey Database captures business perceptions of the obstacles to enterprise growth for 8,483 currently operating firms in 25 African countries. Overall, so-called own generation by firms-which has been on the rise in recent years-accounts for about 6 percent of installed generation capacity in Sub-Saharan Africa (equivalent to at least 4,000 MW of installed capacity). However, this share doubles to around 12 percent in the low-income countries, the post-conflict countries, and more generally on the Western side of the continent. In a handful of countries own generation represents more than 20 percent of capacity. Rigorous empirical analysis shows that unreliable public power supplies is far from being the only or even the largest factor driving generator ownership. Firm characteristics have a major influence-in particular, the probability of owning a generator doubles in large firms relative to small ones. Our model predicts that the prevalence of own generation would remain high (at around 20 percent) even if power supplies were perfectly reliable, suggesting that other factors, such as emergency back-up and export regulations, play a critical role in the decision to own a generator.

Assessing uncertainties in land cover projections

Understanding uncertainties in land cover projections is critical to investigating land-based climate mitigation policies, assessing the potential of climate adaptation strategies and quantifying the impacts of land cover change on the climate system. Here, we identify and quantify uncertainties in global and European land cover projections over a diverse range of model types and scenarios, extending the analysis beyond the agro-economic models included in previous comparisons. The results from 75 simulations over 18 models are analysed and show a large range in land cover area projections, with the highest variability occurring in future cropland areas. We demonstrate systematic differences in land cover areas associated with the characteristics of the modelling approach, which is at least as great as the differences attributed to the scenario variations. The results lead us to conclude that a higher degree of uncertainty exists in land use projections than currently included in climate or earth system projections. To account for land use uncertainty, it is recommended to use a diverse set of models and approaches when assessing the potential impacts of land cover change on future climate. Additionally, further work is needed to better understand the assumptions driving land use model results and reveal the causes of uncertainty in more depth, to help reduce model uncertainty and improve the projections of land cover.

Energy prices will play an important role in determining global land use in the twenty first century

Global land use research to date has focused on quantifying uncertainty effects of three major drivers affecting competition for land: the uncertainty in energy and climate policies affecting competition between food and biofuels, the uncertainty of climate impacts on agriculture and forestry, and the uncertainty in the underlying technological progress driving efficiency of food, bioenergy and timber production. The market uncertainty in fossil fuel prices has received relatively less attention in the global land use literature. Petroleum and natural gas prices affect both the competitiveness of biofuels and the cost of nitrogen fertilizers. High prices put significant pressure on global land supply and greenhouse gas emissions from terrestrial systems, while low prices can moderate demands for cropland. The goal of this letter is to assess and compare the effects of these core uncertainties on the optimal profile for global land use and land-based GHG emissions over the coming century. The model that we develop integrates distinct strands of agronomic, biophysical and economic literature into a single, intertemporally consistent, analytical framework, at global scale. Our analysis accounts for the value of land-based services in the production of food, first- and second-generation biofuels, timber, forest carbon and biodiversity. We find that long-term uncertainty in energy prices dominates the climate impacts and climate policy uncertainties emphasized in prior research on global land use.

Estimating Market Power in Homogenous Product Markets Using a Composed Error Model: Application to the California Electricity Market

This study contributes to the literature on estimating market power in homogenous product markets. We estimate a composed error model, where the stochastic part of the firm’s pricing equation is formed by two random variables: the traditional error term, capturing random shocks, and a random conduct term, which measures the degree of market power. Treating firms’ conduct as a random parameter helps solving the issue that the conduct parameter can vary between firms and within firms over time. The empirical results from the California wholesale electricity market suggest that realization of market power varies over both time and firms, and reject the assumption of a common conduct parameter for all firms. Notwithstanding these differences, the estimated firm-level values of the conduct parameter are closer to Cournot than to static collusion across all specifications. For some firms, the potential for realization of the market power unilaterally is associated with lower values of the conduct parameter.

What Is the Social Value of Second Generation Biofuels

What are second generation (2G) biofuel technologies worth to global society? A dynamic, economic model is used to assess the impact on crops, livestock, biofuels, forestry, and environmental services, as well as GHG emissions of introducing 2G biofuels technology. Under baseline conditions, this to amounts to

The Effect of Climate and Technological Uncertainty in Crop Yields on the Optimal Path of Global Land Use

64.2 billion at today’s population or an increase of roughly 0.3% in the valuation of the world’s land resources. Under GHG regulation this global valuation more than doubles, whereas a flat energy price scenario essentially eliminates the value of 2G technology to society.

Urbanization and property rights

The pattern of global land use has important implications for the worlds food and timber supplies, bioenergy, biodiversity and other eco-system services. However, the productivity of this resource is critically dependent on the worlds climate, as well as investments in, and dissemination of improved technology. This creates massive uncertainty about future land use requirements which compound the challenge faced by individual investors and governments seeking to make long term, sometimes irreversible investments in land conversion and land use. This study assesses how uncertainties associated with underlying biophysical processes and technological change in agriculture affect the optimal profile of land use over the next century, taking into account the potential irreversibility in these decisions. A novel dynamic stochastic model of global land use is developed, in which the societal objective function being maximized places value on food production, liquid fuels (including bio-fuels), timber production, and biodiversity. While the uncertainty in food crop yields has anticipated impact, the resulting expansion of crop lands and decline in forest lands is relatively small.

Governors Matter: A Comparative Study of State-Business Relations in Russia’s Regions

Since the industrial revolution, the economic development of Western Europe and North America was characterized by continuous urbanization accompanied by a gradual phasing-in of urban land property rights over time. Today, however, the evidence in many fast urbanizing low-income countries points towards a different trend of “urbanization without formalization”, with potentially adverse effects on long-term economic growth. This paper aims to understand the causes and the consequences of this phenomenon, and whether informal city growth could be a transitory or a persistent feature of developing economies. A dynamic stochastic equilibrium model of a representative city is developed, which explicitly accounts for the joint dynamics of land property rights and urbanization. The calibrated baseline model describes a city that first grows informally, with the growth of individual incomes leading to a phased-in purchase of property rights in subsequent periods. The model demonstrates that land tenure informality does not necessarily vanish in the long term, and the social optimum does not necessarily imply a fully formal city, neither in the transition, nor in the long run. The welfare effects of policies, such as reducing the cost of land tenure formalization, or protecting informal dwellers against evictions are subsequently investigated, throughout the short-term transition and in the long-term stationary state.

Land-Use Change and Food Supply

This study uses the latest 2011 round of Business Environment and Enterprise Performance Survey for the Russian Federation to take a closer look at regional-level factors influencing the business environment in Russia. Specifically, the study explores the role of regional administrations and variables of administrative continuity and governor origin in shaping regional business environment. The findings reveal that regional businesses in Russia are (1) acutely anxious about administrative transitions (as expressed in gubernatorial replacements) and favor administrative continuity, and (2) favor government officials that are locally embedded. The analysis suggests that many localities in Russia have witnessed the emergence of mutually beneficial state-business arrangements that are inimical to economic competition.

Effect of climate policies on labor markets in developing countries : review of the evidence and directions for future research

Large-scale deployment of biofuels has a profound effect on allocation of land resources. The expansion of biofuels industry requires a greater amount of crop lands for producing biofuel feedstocks. This additional crop lands could be supplied through (1) reallocation of existing crop lands from other crops (e.g., rice, fruits and vegetables, tobacco, cotton) towards production of biofuel feedstocks (e.g., corn, sugarcane, jatropha, rapeseed), (2) conversion of forest and pasture lands to crop lands. The land-use change thus occurs directly and indirectly. For example, when forest land is converted to produce sugarcane, such conversion is termed as direct land-use change. When biofuels displace existing crop lands in one part of the world, and production of food crops increases in other parts of the world (e.g., by converting forest lands to crop lands), this conversion is termed as indirect land-use change.