Rossana Riccardi

The steel industry: A mathematical model under environmental regulations

In this work, a spatial equilibrium problem is formulated for analyzing the impact of the application of the EU-ETS on the steel industry that has historically seen Europe as one of its major producers. The developed model allows us to simultaneously represent the interactions of several market players, to endogenously determine output and steel prices and to analyze the investment in the Carbon Capture and Storage (CCS) technology. In addition, the proposed model supports the evaluation of the CO2 emission costs on the basis of Directive 2009/29/EC, the “20-20-20” targets, and the Energy Roadmap 2050. In this light, two main processes for steelmaking have to be considered: integrated mills (BOF) and Electric Arc Furnace (EAF) in minimills.

A Spatial Competitive Analysis: The Carbon Leakage Effect on the Cement Industry Under the European Emissions Trading Scheme

The European Emissions Trading Scheme (ETS) is a cap and trade system to curb CO2 emissions. It has caused both direct costs (CO2 allowances) and indirect costs (higher electricity prices) to energy-intensive industries. Moreover, as there is no global CO2 agreement, the ETS could distort the European economy, prompting energy-intensive industries to relocate production to unregulated countries: the i?½carbon leakagei?½ effect. This paper investigates the impact of ETS on the cement industry, focusing on Italy, the second European producer, analyzing a Cournot oligopolistic partial equilibrium model with a detailed technological representation of the market. Simulation results show that the European and Italian cement markets are subject to carbon leakage, especially where carbon regulation is more stringent and where plants are located near the seacoast. Further, transportation costs - particularly high in the cement sector - significantly affect the rate of carbon leakage.

Spatial equilibrium problems: the carbon leakage effect on cement sector under different environmental policies

Abstract This paper proposes a Generalized Nash Game problem (GNEP) to study the possible cement production relocation from countries subject to environmental regulation to areas where environmental policies are not applied or are more lenient. This phenomenon takes the name of “carbon leakage” effect. This analysis is based on an oligopolistic partial equilibrium model with a detailed technological representation of the cement market. An existence result for this GNEP is also provided.

The cement industry: Eco-eciency country comparison using data envelopment analysis

Abstract An increasing consciousness on climate change problems has recently induced countries to apply environmental regulations, either on voluntary or compulsory basis, in order to curb greenhouse gas emissions generated by human activities. The European Emission Trading Scheme (EU-ETS) is the widest cap and trade system in the world. As other environmental systems, the EU-ETS aims at monitoring CO2 emissions from specific industrial sectors and cement is one of them. In this paper, we analyze the environmental performance of cement industry operating in 21 worldwide countries taking into consideration both the desirable (cement) and the undesirable (CO2 emissions) outputs of its production process. Three DEA models with undesirable outputs and a directional distance function approach are compared in order to measure the environmental performance of cement industry under different points of view. The analysis, carried out for the years 2005–2008, points out the changes in efficiency levels within these years and the effects of emission regulations on the global performance of cement industry.

A General Nonconvex Multiduality Principle

We introduce a (possibly infinite) collection of mutually dual nonconvex optimization problems, which share a common optimal value, and give a characterization of their global optimal solutions. As immediate consequences of our general multiduality principle, we obtain Toland–Singer duality theorem as well as an analogous result involving generalized perspective functions. Based on our duality theory, we propose an extension of an existing algorithm for the minimization of d.c. functions, which exploits Toland–Singer duality, to a more general class of nonconvex optimization problems.

On an equilibrium problem with complementarity constraints formulation of pay-as-clear electricity market with demand elasticity

We consider a model of pay-as-clear electricity market based on a Equilibrium Problem with Complementarity Constraints approach where the producers are playing a noncooperative game parameterized by the decisions of regulator of the market (ISO). In the proposed approach the bids are assumed to be convex quadratic functions of the production quantity. The demand is endogenously determined. The ISO problem aims to maximize the total welfare of the market. The demand being elastic, this total welfare take into account at the same time the willingness to pay of the aggregated consumer, as well as the cost of transactions. The market clearing will determine the market price in a pay-as-clear way. An explicit formula for the optimal solution of the ISO problem is obtained and the optimal price is proved to be unique. We also state some conditions for the existence of equilibria for this electricity market with elastic demand. Some numerical experiments on a simplified market model are also provided.

Evaluating the strategic behavior of cement producers: An equilibrium problem with equilibrium constraints

Abstract This paper investigates the equilibria reached by a number of strategic producers in the cement sector through a technological representation of the market. We present a bilevel model for each producer that characterizes its profit maximizing behavior. In the bilevel model, the upper-level problem of each producer is constrained by a lower-level market clearing problem representing cement trading and whose objective function corresponds to social welfare. Replacing the lower level problem by its optimality condition yields a Mathematical Program with Equilibrium Constraints (MPEC). Then, all strategic producers are jointly considered. Representing their interaction requires solving jointly the interrelated MPECs of all producers, which results in an Equilibrium Problem with Equilibrium Constraints (EPEC). A parametric analysis concerning cost, capacity and demand fluctuations has been conducted. Our analysis shows that the European cement sector is mature and has lost its competitiveness; African cement market can assume a prominent role in international markets in the coming future if investments in new and efficient capacity are carried out. Finally, the Far East will remain the reference exporter of cement at worldwide level.

An equilibrium model for the cement sector: EU-ETS analysis with power contracts

The gradual relocation of part of the energy-intensive industries (EIIs) outside of Europe is one of the possible consequences of the combination of emission charges and higher electricity prices entailed by the EU-Emission Trading System (EU-ETS). The geographical distribution of cement plants is a relevant factor in relocation decisions because cement sector is characterized by high transportation costs. In order to mitigate this effect, EIIs have asked for CO

Eco-efficiency of the world cement industry: A data envelopment analysis

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