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Abstract:
The European electricity market is in the middle of a transformation from monopolistic state-owned production and distribution to privatized markets, with various competing firms. The speed of privatization differs widely across Europe from full trade of electricity at the wholesale market in Scandinavian countries, to partial trade on the wholesale market in The Netherlands and Germany, and no trade on the wholesale market in France and Belgium. Hence, the market and its rules are no longer fixed, and the electricity market is in the middle of a dynamic and complex process of change.

This report discusses whether the liberalization process can result in more efficient electricity production in Europe. In addition, the environmental impacts of the liberalization process are studied. Efficiency of electricity production is analyzed with a static computational game theoretic model, which compares strategic options of and interactions among energy suppliers. This model is calibrated to the European electricity market in eight countries, namely Belgium, Denmark, Finland, France, Germany, The Netherlands, Norway, and Sweden. In a liberalized market, large firms are most likely to behave strategically and exercise market power in order to maximize profits. As a result, wholesale prices might increase, partially or fully off-setting the purpose of liberalization, namely to decrease wholesale prices. Also, a potential market leader may emerge, who by anticipating on the reaction of followers, could acquire higher profits by increasing production and market share. Finally, firms can also acquire passive ownership in other firms. Passive cross-border ownership can increase a firm's market power and profits, resulting in even higher wholesale prices.

The environmental impacts of different scenarios of producer behavior are ambiguous. Under full competition, greenhouse gas emissions decline compared to the initial situation, while acidification and smog formation increase. In the case where large firms act strategically, the levels of emission decrease due to higher electricity prices and lower levels of electricity demand. In the case with a potential first-moving market leader, the levels of emission increase substantially. This result, however, depends on the technology mix of the electricity capacity of the market leader.

game theory, liberalized electricity market, EU, strategic behavior, greenhouse gas emissions, acidification, smog formation

Abstract:
Nowadays, a process can be observed in Germany where electricity producing and trading firms react to the electricity market liberalisation by merging market shares, since the year 2000, which reduces the number of suppliers and influences production and consumer prices. This paper discusses whether the liberalisation process will have positive or negative impacts on the environmental situation and whether this process together with a phase out of nuclear power can guarantee the intended improvement of environmental conditions without governmental regulation in Germany. This is done by modelling different strategic options of energy suppliers and their impacts on the economic and environmental situation in the liberalised German electricity market by a computational game theoretic model. Calculations with this model show that when German firms act strategically (e.g. a change in action of one firm affects the electricity price and, hence, the payoffs of other firms), the environment is better off at the cost of higher electricity prices. This result is robust to perturbations as shows by performing a sensitivity analysis.

Electricity Market Liberalisation, Game Theoretic Model, Environmental Effectiveness

Abstract:
Tourism, being volatile and situation-specific, is responsive to climate change. A cross-section analysis is conducted on destinations of OECD tourists and a factor and regression analysis on holiday activities of Dutch tourists, to find optimal temperatures at travel destination for different tourists and different tourist activities. Globally, OECD tourists prefer a temperature of 21 deg.C (average of the hottest month of the year) at their choice of holiday destination. This indicates that, under a scenario of gradual warming, tourists would spend their holidays in different places than they currently do. The factor and regression analysis suggests that preferences for climates at tourist destinations differ among age and income groups.

Tourist demand, climate change, factor analysis, regression analysis, cross-section analysis

Abstract:
The climate change issue has been widely studied. To add to this literature, this paper focuses on the role of environmental non-governmental organisations in the Netherlands in raising public awareness. Besides, their role in relation to the Dutch government's climate policies is researched as well. The findings of this research indicate that, with respect to the climate change issue, environmental NGOs in the Netherlands may not always be active and systematic, as it is generally perceived, in raising public awareness and putting pressure on the Dutch government for implementing the targeted measures at the national level.

Abstract:
Free-riding is a major problem for international climate policy. A country can take advantage of other countries' emission reduction without contributing to abatement policies itself. Game theory suggests that issue linkage may help to overcome free-riding. Earlier studies suggest that if negotiations on greenhouse gas emission reduction are coupled to negotiation on technology transfer, the incentives to co-operate increase. This study confirms that finding. A country has less reason to free-ride if free-riding implies that the countries loses access to desirable, foreign technologies. We also show that, in many cases, it hurts to deny another country access to domestic technologies, if that country retaliates by withholding its technologies. We further show that the losses of withholding abatement technologies are small relative to the gains of free-riding. So, linking greenhouse gas emission reduction with technology diffusion helps to deter free-riding, but only a little bit, and only if the two issues are automatically linked.

Abstract:
We develop an economic partial equilibrium model for energy supply and demand with capital and labor as production factors, and endogenous technological change through learning by research and learning by doing. Our model reproduces the learning curve typical for (bottom-up) energy system models. The model also produces an endogenous S-curved transition from fossil fuel energy sources to carbon-free energy sources over the coming two centuries. We use the model to study changes in fossil fuel and carbon-free energy use and carbon dioxide emissions induced by carbon taxes. It is shown that induced technological change accelerates the substitution of carbon-free energy for fossil fuels substantially, and can increase by factor 5 the cumulative emission reductions achieved through a carbon tax over the period 2000-2100.

Induced technological change, Environmental taxes, Partial equilibrium, Learning by doing

Abstract:
This paper applies the theory of social situations to international environmental agreements on greenhouse gas emission reduction. The usual pessimism on the size of stable coalitions among world regions is challenged for two alternative cases, namely by introducing farsightedness and by introducing coalitional moves with commitment. This is an extension of stability in the cartel game, where a cartel symbolises a coalition among world regions for reducing greenhouse gas emissions. It is a special case of the commitment situation, which has been proposed in the theory of social situations. The results are obtained by restricting the move rules in the game among world regions.

Coalitions, coalitional moves, cooperation, theory of social situations, international negotiations, climate change

Abstract:
People have a marginal role in managing forests located in the vicinity of their villages in Northern India. This situation is scrutinised in this paper by studying strategic play of forest users. Thereto, a 1 versus n - 1 game of people's participation in forest management is estimated for three institutional and historical distinct cases at the state and village level. Critical discount factors are derived to verify whether incentives exist for villagers to mutually participate in managing commonly used forests. This paper find such incentives in varying degrees for games at the state level and for games in 28 of the considered 32 villages.

Game Estimation, Repeated Games, People's Participation, Forest Management, Rural India

Abstract:
There is a multi-dimensional need for studying the energy situation in Turkey and to obtain insight into the development of CO2 emissions. On the one hand, recent projections of the OECD show that Turkey has a yearly GDP growth potential of over 7%. On the other hand, recent projections of UNDP and World Bank indicate that the level of CO2 emission is going to rise six-fold by 2025 with respect to the level of emissions in 1990. It is a great challenge to both meet the growth target and keep the CO2 under control. Thereupon, this paper tries to unfold factors that explain CO2 emissions by undertaking a complete decomposition analysis for Turkey over the period 1980-2003. The analysis shows, as is common to relatively fast growing economies, that the biggest contributor to the rise in CO2 emissions is the expansion of the economy (scale effect). The carbon intensity and the change in composition of the economy, which nearly move in tandem, also contribute to the rise in CO2 emissions, albeit at a slower rate. The energy intensity of the economy, which is decreasing, is responsible for a modest reduction in CO2 emissions. Hence, in congruence with the scale effect, we do not find a decoupling of carbon emissions and economic growth in Turkey over the period 1980-2003.

Decomposition analysis, Turkey, Energy, CO2 emissions, Economic growth

Abstract:
Historically, the Spanish water management model's predominate goal has been resource augmentation. This mindset has had important consequences for the system's capacity to cope with droughts. It has impacted the system's overall vulnerability, the discourse of scarcity, the conceptualisation of risk and the stakeholders' interests and their approach to risk. The aim of this article is to present the traditional hydraulic paradigm, its current crisis and implications for present and future risk management, and to explore stakeholder and institutional reactions and adaptation to changing risk scenarios. The adaptation process will be framed within the wider context of macro-trends, such as marketisation and re-scaling of institutions and global warming.