Essays in energy and environmental markets
Name
746654459-MIT.pdf
Description
Full printable version
Size
15.05 MB
Format
Adobe PDF
Checksum (MD5)
d394f3e6721117e47310991050c2b47b
Author(s)
Reguant-Rido, Mar
Advisor(s)
Stephen P. Ryan and Nancy L. Rose.
Date Issued
2011
Publisher
Massachusetts Institute of Technology
Abstract
In this thesis, I explore issues related to energy and environmental markets. In the first chapter, I examine the benefits of complementary bidding mechanisms used in electricity auctions. I develop a model of complex bidding and estimate its structural parameters in the context of the Spanish electricity market. I then perform a counterfactual analysis in which the original mechanism is compared to one in which complex bids are not allowed. I find that, while firms do exercise market power through complex bids, the positive coordination benefits of complex bidding dominate. In the second chapter, I explore the impacts of cap-and-trade in the Spanish electricity market, quantifying the rate at which firms internalized the costs of the emissions as well as the rate at which they passed it through. I find evidence that supports a full internalization rate at the firm-level, which results in a partial pass-through due to both demand and supply factors. Finally, in chapter 3, in joint work with Meredith Fowlie and Stephen Ryan, we explore the long run dynamic implications of subjecting an imperfectly competitive industry to market-based pollution regulation. Using two decades of panel data on the US Portland cement industry, we estimate a fully dynamic model of firms' strategic entry, exit, production, and investment decisions. We then use the model to simulate counterfactual outcomes under three general classes of allocation regimes: auctioning, grandfathering, and contingent updating. We find that the imposition of a carbon trading program would lead to large social losses at low to medium carbon prices.
Description
Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2011.
Cataloged from PDF version of thesis.
Includes bibliographical references (p. 145-150).
Subjects
Economics.
MIT Department
Massachusetts Institute of Technology. Department of Economics
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