M. Ozgur Kayalica

Strategic Environmental Policies in the Presence of Foreign Direct Investment

We analyze strategic environmental standards in the presence of foreign direct investment. A number of foreign firms located in a host country compete with a domestic firm in another country to export a homogeneous good to a third country. When the number of foreign firms is exogenous, the host country applies a stricter environmental regulation than the other producing country. However, under free entry and exit of foreign firms, the host country may apply a less severe standard under both non-cooperative and cooperative equilibrium. We also find that the nature market structure does not affect the equilibrium values of total pollution if export subsidies are also used.

Domestic lobbying and foreign direct investment. The role of policy instruments

Abstract Following the Common Agency approach to political equilibrium, we examine how domestic interest groups can influence national policies toward FDI and how the choice of instrument by the government can affect lobbying activities. Domestic firms lobby for lower subsidies when a discriminatory subsidy on FDI is applied. However, when a subsidy is applied uniformly to both groups, they may lobby for higher subsidies. The nature of lobbying is also different for proportional and lump-sum profit subsidies when uniformly applied. The qualitative effect of the number of domestic firms or the degree of corruption on the equilibrium depends on the choice of instruments. Finally, with the help of numerical simulation, we examine whether there is any potential conflict between the government and the lobby groups on the choice of the instrument.

Energy Demand Side Management in the Lack of Smart Grids

The aim of this study is minimizing the negative effects on grid instability of districts caused by high power demanding industrial users, where a unique electricity-generating center supplies power. To achieve this, we propose a MINLP model that in turn, will fill the gap of two-way communication in the grids. This is how the users of developing countries who have no smart electricity grids can make contributions to energy management following the developed DSM programs. Most balanced power consumption schedules can be delivered without violating existing production plans of the sample factories and without changing total daily energy consumption. Thus, grid instability originated from power usage is minimized.

Life Long Economic Analysis for Industrial Microgrids: A Case Study in Turkey

Microgrids are used prevalently in isolated sites as a solution for multiple resource usage and distributed energy generation. Industrial Zones are constructed as isolated sites, where expectations include reducing the energy costs, providing local energy supply with fewer fluctuations and reducing greenhouse gas emissions. To encourage the microgrids in a developing country of Small and Medium-sized Enterprises (SMEs) placed in industrial zones, pre-investment studies are to be run. This article aims at minimizing the total energy costs of an organized industrial zone in parallel with mitigation of emission for climate change. The costs depend on the number and power of the Wind Turbines (WT) and the capacity of Photovoltaic (PV) panels when renewable energy sources and power storage construct the resources. A Mixed Integer Nonlinear Programming (MINLP) model is proposed to optimize the number of installations to satisfy the current demand. Lifelong carbon emission and cost analysis are performed to minimize the total cost of ownership. In this initial study, uncertainties caused by the renewable energy supply are smoothed by limited use of one gas tribune and grid connection. A case study of the model is implemented for Gebze Industrial Zone. This project will contribute to the researches on microgrids for a long term optimization model.

Multi-Site Energy Use Management in the Absence of Smart Grids

Demand-side management (DSM) allows an energy load to be balanced across multiple consumers. Energy consumption fluctuations cause important costs based on the alternating energy price tariffs. DSM creates opportunities for consumers to reduce their energy consumption costs by smoothing the daily load curve. An MINLP model is constructed based on power consumption, which aligns with the production schedules of the industrial units. Then, these feasible schedules are used as an input for a cooperative Bayesian game that is designed to balance the hourly loads. A case study of three factories, where the demand-side manager tries to minimize the instability of purchasing electricity from the general grid through load balancing, is considered.

Intra-industry trade with pollution concerned cooperation

The authors develop a two-country, two-firm intra-industry trade model. Each firm is operating at its home country and producing homogeneous goods to be consumed in both countries. Governments apply quantity restriction on pollution. Every individual country is affected from the pollution generated during the production process of its own firm. The model shows that efficiency in pollution abatement technology plays a crucial role on welfare maximizing effort of governments. A critical level of pollution abatement technology determines the preponderance of environmental misgivings in welfare maximizing behavior. The more efficient the firms in pollution abatement technology, the less stricter the governments will be in their policies to reduce negative environmental externalities.