Jihyo Kim

Causal relationship between renewable energy consumption and economic growth: comparison between developed and less-developed countries

This study aims to analyze and compare the long-run causal relationship between renewable energy consumption and economic growth for developed countries with that for less-developed countries to derive implications for long-term renewable energy policy. This study uses 1990–2010 data on 31 OECD countries (developed countries) and 49 non-OECD countries (less-developed countries) in the multivariate panel vector error correction model. The results show that the conservation hypothesis of a causal relationship between renewable energy consumption and economic growth is valid in the long run for OECD countries, and the feedback hypothesis, for non-OECD countries. This finding indicates that for developed countries, renewable energy has not played an important role in economic growth but has instead been growing by leaning on economic growth. By contrast, for less-developed countries, renewable energy has been playing an important role as a production input; similarly, economic growth has led to increased renewable energy consumption. As their economies grow, renewable energy consumption will increase in both developed countries and less-developed countries. However, policies to increase renewable energy consumption will encourage economic growth only in less-developed countries. Consequently, developed countries need to adopt a selection and concentration strategy, and less-developed countries need to adopt intensive promotion policies for renewable energy.

Effect of ICT Capital on the Demands for Labor and Energy in Major Industries of Korea, US, and UK

We investigate the effect of ICT capital on the demands for labor and energy in manufacturing and electricity gas water industries of Korea, US, and UK. Assuming ICT capital, non-ICT capital, labor, electricity, fuel, and material as input factors for manufacturing and ICT capital, non-ICT capital, labor and energy material as input factors for electricity gas water industry, we estimate the Morishima elasticities of substitution. Considering the relative price changes of input factors, ICT capital has substituted labor in manufacturing and electricity water gas industries of the three countries. ICT capital has substituted both electricity and fuel in US and UK manufacturing. Although ICT capital has substituted electricity and fuel each other in Korean manufacturing, ICT capital is unlikely to decrease the demands for electricity and fuel when considering their relative price changes. ICT capital has substituted energy material in electricity gas water industries of the three countries.

Evolution of the international crude oil market mechanism

This study explains how the international crude oil market mechanism has evolved. It suggests a systematic approach to analyse the hypothesis of the integration of the international oil market, the structural changes in oil price movements and the benchmark role of specific crude, which have been separately discussed in previous studies. We analyse weekly spot prices of Dubai, Brent and West Texas Intermediate (WTI) from January 1997 to July 2012. First, the empirical results of the cointegration test taking a structural break into account show that all the bivariate combinations of these three crude oil prices are cointegrated and that most of the structural breaks occur in 2009. These cointegrating relationships thus indicate that the international crude oil market is integrated. Second, considering the structural breaks suggested by the cointegration test results and the timing of the price reversal between different crudes, the causal relationships before 2009 and those afterwards are compared. Before 2009, bidirectional causality is observed for all the bivariate combinations of the Dubai, Brent and WTI prices. However, the Dubai price unidirectionally causes the Brent and WTI prices thereafter. This result implies that the Dubai price has played a benchmark role in the international crude oil market since 2009.

The effects of South Korea's conditional loan system in promoting foreign oil and gas exploration projects

Since 1983, the South Korean government has implemented a conditional loan system to push private firms to participate in foreign oil and gas exploration projects, ultimately to secure the countrys energy supply. In this study, we empirically investigate whether South Koreas conditional loan system successfully contributed to the promotion of foreign oil and gas exploration projects. First, we analyze how the amount of conditional loans has affected the number of exploration projects. Our empirical results show that a 1% increase in loans yielded both a 0.8% increase in the number of total exploration projects and a 0.5% increase in the number of newly launched exploration projects. The economic conditions of the exploration and production business have been insignificantly effective. Second, we analyze how the contribution of conditional loans to total investment has affected the number of exploration projects that have taken place. The empirical results show that the lower the contribution of conditional loans is, the greater the number of newly launched exploration projects. However, the contribution of conditional loans has significantly affected neither the number of total exploration projects nor the number of exploration projects that feature operational responsibility.

Effects of government policies on deploying geothermal electricity in 35 OECD and BRICS countries

Various government policies to promote geothermal electricity have been implemented worldwide, but their effectiveness remains to be investigated. Therefore, this study investigates the impacts of such policies on the deployment of geothermal electricity through a panel analysis of 35 OECD and BRICS countries from 1980 to 2010. First, we show that investment incentives and obligations are efficient in increasing the share of geothermal electricity to total electricity generation. Second, we show that the deployment of geothermal electricity cannot be easily explained in terms of technology-push and market-pull policies, because the components of the policy groups redeem each other. Finally, we show that country-specific factors such as the per capita energy consumption, international oil prices, domestic electricity prices, and oil and gas exploration and production costs are relevant to the deployment of geothermal electricity. As it is the first to identify the impacts of the various determinants of geothermal electricity, this study is expected to provide useful information to policy-makers intending to promote geothermal electricity.