Valeria Di Cosmo

Decomposing patterns of emission intensity in the EU and China: how much does trade matter?

We use data from the World Input-Output Database to examine channels through which CO2 emissions are embodied within, and imported into, the European production in 2005 and in 2009. We use an input–output price model to simulate the effect that a rise in the price of emissions trading system (ETS) allowances would have on the final price of goods. We find a reduction in emission intensity, which was greatest in those sectors regulated under ETS. Finally we examine the trade between China and the EU to study possible increases in carbon leakage. Results show that emissions embodied in imported intermediate goods have increased in all sectors.

Disentangling Water Usage in the European Union: A Decomposition Analysis

The Water Framework Directive (WFD) defines common objectives for water resources throughout the European Union (EU). Given this general approach to water preservation and water policy, the objective of this paper is to analyse whether common patterns of water consumption exist within Europe. In particular, our study uses two methods to reveal the reasons behind sectoral water use in all EU countries. The first method is based on an accounting indicator that calculates the water intensity of an economy as the sum of sectoral water intensities. The second method is a subsystem input-output model that divides total water use into different income channels within the production system. The application uses data for the years 2005 and 2009 on water consumption in the production system of the 27 countries of the EU. From our analysis it emerges that EU countries are characterized by very different patterns of water consumption. In particular water consumption by the agriculture sector is extremely high in Central/Eastern Europe, relative to the rest of Europe. In most countries, the water used by the fuel, power and water sector is consumed to satisfy domestic final demand. However, our analysis shows that for some countries exports from this sector are an important driver of water consumption. Focusing on the agricultural sector, the decomposition analysis suggests that water usage in Mediterranean countries is mainly driven by final demand for, and exports of, agricultural products. In Central/Eastern Europe domestic final demand is the main driver of water consumption, but in this region the proportion of water use driven by demand for exports is increasing over time. Given these heterogeneous water consumption patterns, our analysis suggests that Mediterranean and Central/Eastern European countries should adopt specific water policies in order to achieve efficient levels of water consumption in the European Union.

The Effect of Increased Transmission and Storage in an Interconnected Europe: An Application to France and Ireland

A longstanding goal of the European Union (EU) is to promote efficient trading between price zones via electricity interconnection to achieve a single electricity market between the EU countries. This paper uses a power system model (PLEXOS-EU) to simulate one vision of the 2030 EU electricity market based on European Commission studies to determine the effects of a new interconnector between France and the Single Electricity Market of Ireland and Northern Ireland (SEM). We use the same tool to understand the effects of investment in storage, and the effects of the interaction between storage and additional interconnection. Our results show that both investments in interconnection and storage reduce wholesale electricity prices in France and Ireland as well as reduce net revenues of thermal generators in most scenarios in both countries. However, France is only marginally affected by the new interconnector. Renewable generators see a modest increase in net revenues. The project has the potential for a positive impact on welfare in Ireland if costs are shared between countries and remain below 45 million €/year for the scenarios examined. The owners of the new interconnector between France and SEM see increased net revenues in the scenarios without storage. When storage is included in the system, the new interconnector becomes less profitable.

How Much Does Wind Power Reduce \(\text {CO}_{2}\) Emissions? Evidence from the Irish Single Electricity Market

This paper evaluates the effect of wind generation on

Wind, Storage, Interconnection and the Cost of Electricity

\text {CO}_{2}

Irish Energy Policy: An Analysis of Current Issues

CO2 emissions using 2008–2012 historical data for the Irish Single Electricity Market. Wind generation displaces

Competition and the Single Electricity Market: Which Lessons for Ireland

\text {CO}_{2}