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Abstract:
Producers or consumers faced with an increase in taxes are usually able to shift parts of it to other levels in the value chain. We examine who is actually bearing the burden of increased energy taxes in the EU-area - consumers or exporters. Traditional tax incidence theory presumes spot markets. Natural gas in the EU-area, however, is to a large extent regulated by incomplete long-term contracts. Still, spot market forces could be indicative for tax shifting, by determining the ex post bargaining power in contract renegotiations. By examining tax shifting in actual gas sales contracts we test whether this is the case. To calculate tax incidence we derive demand elasticities, income elasticities and cross price elasticities for natural gas, oil and electricity, for different market segments (households, industry, power generators) in EU countries. Particular focus is on tax incidence in gas markets regulated by incomplete long-term contracts. Based on our findings we discuss normative energy tax issues related to revenue, environmental obligations and security of supply.

Energy Markets, Incomplete Contracts, Tax Incidence

Abstract:
Gas exports to the Continent are regulated by long term take-or-pay contracts. The contracts are described and analyzed. We thereafter examine whether the most central European gas market, the German market, is integrated. Are there substantial price differences between gas from different export countries, and do prices move together? Time series of Norwegian, Dutch and Russian gas export prices to Germany in 1990-1998 are examined. Cointegration tests show that the different border prices for gas to Germany move proportionally over time, indicating an integrated gas market (the Law of One Price holds). We find differences in mean prices, with Russian gas being sold at prices systematically lower than Dutch and Norwegian gas. Among the explanatory factors for price discrepancies are differences in volume flexibility (swing) and perceived political risk.

Market integration, gas markets, cointegration test

Abstract:
Following the Brent Spar controversy, the OSPAR countries reached a unanimous agreement in 1998 for the future rules for disposal of petroleum installations. The vast majority of existing offshore installations will be re-used or returned to shore for recycling or disposal. For installations where there is no generic solution, one should take a case-by-case approach. We provide a survey of international economic and regulatory issues pertaining to disposal of petroleum installations, and provide specific examples by analysing the Norwegian decommissioning and disposal policy. Optimal disposal policy can be analysed by cost-benefit analyses with distributional effects, subject to environmental and goodwill constraints.

Petroleum installations, decommissioning, disposal, externalities

Abstract:
Despite the large literature on plant exit behavior, little attention has been paid to the vintage capital theory as an alternative hypothesis to learning. Learning models predict that exit rates decrease with plant age and the vintage capital theory predicts that exit rates increase with the age of capital. We use a panel of Norwegian manufacturing plants and construct an index of capital age to distinguish between the effects on exit rates. The empirical results imply that there is both a learning effect and a vintage capital effect. We also find that exit rates depend on the business cycle, and increase in severe downturns.

Abstract:
We present a model of fishers' gear choice, which allows for heterogeneity both in production technology and risk preferences and apply it on a panel of Swedish trawlers. Stochastic revenue functions are estimated and used to predict the mean and standard deviation of revenue for each trip. In a random-parameters logit model, we test if these predicted values explain gear choice. A majority of fishers respond positively to increased mean and negatively to increased variability of expected landing values, indicating risk aversion, but also show a strong tendency to choose the same gear used on the previous trip.

Abstract:
Agglomeration externalities can have positive effects on both the production possibility frontier and technical inefficiency of firms. Increased levels of localized knowledge spillovers and substitution of internal inputs with external inputs may lead to fewer errors in decision-making and execution of production tasks, thus causing firms to become technically more efficient relative to the production frontier. When we estimate a stochastic frontier production model on a large panel of salmon aquaculture farms, we find econometric support for positive agglomeration externalities on both the production frontier and technical inefficiency.