Incentives For Private Investment Research Articles

Rate design with distributed energy resources and electric vehicles: A Californian case study

The high penetration of distributed energy resources and electric vehicles is changing the way the electricity system is managed. In turn, the way utilities have been recovering their expenditures through tariffs needs reformulation. We investigate the impact of different retail tariff designs from a Californian scenario on private investment incentives and cost-shifting using solar PVs, stationary batteries, and electric vehicles. The private commercial facilities studied do not own the vehicles, and the vehicle owners are remunerated for energy services provided; this remuneration strongly depends on the connection hours of the vehicles and the type of tariff applied. EV net income varies annually from $57 to $218 per vehicle, reaching the highest values when stationary batteries are present and significant demand charges are applied. We found that an energy-based tariff incentivizes the adoption of solar PVs, bringing high private gains, but often with high cost-shifting. A shift toward coincident peak tariffs in the short term and capacity-based tariffs in the long run, if the cost of DERs continues to fall quickly, can alleviate cost-shifting caused by strong DER penetration. Finally, we derive policy implications from the results and earmark more sophisticated tariff designs for further investigation.

Rate design with distributed energy resources and electric vehicles: A Californian case study

The high penetration of distributed energy resources and electric vehicles is changing the way the electricity system is managed. In turn, the way utilities have been recovering their expenditures through tariffs needs reformulation. We investigate the impact of different retail tariff designs from a Californian scenario on private investment incentives and cost-shifting using solar PVs, stationary batteries, and electric vehicles. The commercial private facilities studied do not own the vehicles and the vehicle owners receive compensation for energy services provided, which strongly depends on the type of tariff applied. We found that energy-based tariffs with on-peak periods synchronized with solar PV production brought the highest private gains, but with high cost-shifting. On the other hand, the capacity-based tariffs reduced the economic benefits and cost-shifting concomitantly, mainly when on-peak periods defined by the rate matched the most constrained grid time window. Batteries are incentivized mostly to offset maximum demand charges rather than to arbitrage energy, but this will strongly depend on the spread between on-peak and off-peak periods. Coincident peak rates, coupled with EVs, can bring high remuneration for EV owners, second-highest net present value, and second-lowest cost-shifting among all rates. Finally, we derive policy implications from the results and earmark more sophisticated tariff designs for investigation.

Intraregional (Local) Fiscal Decentralization and Investment in Fixed Assets in Russia

The article shows that the effect of local fiscal decentralization on investment is characterized by an inverted U-shaped relationship. According to data for 2009–2016, the greatest incentives for private investment in the regions of Russia appeared with expenditure and revenue decentralization equal to 33–36%. However, the overall level of investment is higher precisely with revenue decentralization. The loss of private investment due to a lack of local authority could reach 6.5 thousand rubles/person.

Political dynamics, public goods and private spillovers

Positive and negative spillovers from private activities onto aggregate economic outcomes are empirically significant. How might politics interact with private investment incentives and their externalities? Our theory connects politics to policies which distort private spillovers. This has implications for empirical identification. In our model, for large negative externality there is a unique equilibrium with perpetually high tax rates and majority poor voters. This is a consequence of political manipulation that anticipates private spillovers on forward-looking investment decisions. When positive spillovers are sufficiently large, individuals can coordinate on policies that encourage private investment. This sustains an equilibrium with perpetually low tax rates and majority rich voters. The resulting multiple equilibria can be used to interpret existing conundrums in empirical findings. We can also rationalize an observed cross-country empirical regularity in terms of public funding for knowledge goods and income inequality.

Public Versus Private Investment in Determining Child Health Outcomes: Evidence from India

This article examines the relationship among access to drinking water, sanitation facilities and health outcomes for children in India. We use the NFHS 2005–2006 household-level survey data to construct the nutritional distribution for two anthropometric health measures for children between ages 6 months and 2 years: the weight-for-height (‘wasting’) and height-for-age (‘stunting’) z-scores. Using a quantile regressions approach, we find that public goods such as piped water are not associated with improving child health outcomes. On the other hand, private investments within the home such as pit latrines and flush toilets do have a strong influence on health outcomes, with the magnitude of the effects being the largest in the middle of the respective nutritional distributions. Further, rural children at the lower end of the nutritional distribution benefit much more than their urban counterparts. Also, the educational attainment of the mother has a strong association with better health outcomes, both in the short run as well as in the long run. Overall, our results provide evidence against ‘one-size-fits-all’ policies, and point towards incentives for private investments in sanitation and mother’s education, especially in rural areas and for children in the middle of the conditional nutritional distribution.

The valley of death, the technology pork barrel, and public support for large demonstration projects

Moving non-incremental innovations from the pilot scale to full commercial scale raises questions about the need and implementation of public support. Heuristics from the literature put policy makers in a dilemma between addressing a market failure and acknowledging a government failure: incentives for private investments in large scale demonstrations are weak (the valley of death) but the track record of governance in large demonstration projects is poor (the technology pork barrel). These arguments are reassessed in the literature, particularly as to how they apply to supporting demonstration projects for decarbonizing industry. A new data set is built of 511 demonstration projects in nine technology areas and characteristics for each project are coded, including timing, motivations, scale, and the share of public funding. The literature and the results from the case studies have five main implications for policy makers in making decisions about demonstration support. Policy makers should consider: prioritizing learning, iteratively upscaling, engaging the private sector, disseminating knowledge widely, and making demand pull robust.

The Valley of Death, the Technology Pork Barrel, and Public Support for Large Demonstration Projects

Moving non-incremental innovations from the pilot scale to full commercial scale raises questions about the need and implementation of public support. Heuristics from the literature put policy makers in a dilemma between addressing a market failure and acknowledging a government failure: incentives for private investments in large scale demonstrations are weak (the valley of death) but the track record of governance in large demonstration projects is poor (the technology pork barrel). We reassess these arguments in the literature, particularly as to how they apply to supporting demonstration projects for decarbonizing industry. Conditions for the valley of death exist with: low appropriability, large chunky investments, unproven reliability, and uncertain future markets. We build a data set of 511 demonstration projects in nine technology areas and code characteristics for each project, including timing, motivations, and scale. We argue that the literature and the results from the case studies have five main implications for policy makers in making decisions about demonstration support. Policy makers should consider: 1) prioritizing learning, 2) iterative upscaling, 3) private sector engagement, 4) broad knowledge dissemination, and 5) making demand pull robust.

Government Regulation, Technology and Development of SME-s

The aim of the paper is to analyze the factors that determine business growth and the impact on the GDP of the country. The paper analyses Albania, as one of the countries in the South East Europe. Albania is still passing through a transition period at all levels, economic and political. Albania has made serious steps in the development of the state of law, of the financial system and it is working on the achievements of goals, such as: becoming an EU member, stabilization of the fiscal and monetary policies, stability of prices, fighting against corruption, incentives for private investments, reduction of business’s taxes etc. The achievement of these goals will bring more motivation and incentives for growth, an increase in domestic and foreign direct investments. The government of Albania is still working on the future strategies that will bring Albania near to the European countries. The partial achievement of the above goals has created a positive environment, but still there is enough room for change and stabilization. The Albanian governments have improved the business climate, in order to create easier methods in the way of doing business, by attracting more foreign investors and creating a positive climate. Albania has experienced an increase of interest from foreign companies, which have invested in the main fields of economic such as: banking, energy, telecommunication, gas-oil, supermarkets, construction etc. However, some fiscal policies have changed during the last three years, which has caused a tightening of credit, investment, growth and income. Nowadays, Albania is not in a good position compare to neighborhood countries and it is facing recession problems that need immediate solution to overcome the crisis.

Public versus Private Investment in Determining Child Health Outcomes in India: A Quantile Regressions Approach

This paper examines the relationship between access to drinking water, sanitation facilities, and health outcomes for children in India. We use the NFHS 2005-2006 household-level survey data to construct the conditional nutritional distribution for two anthropometric health measures for children between ages six months to two years that capture both short term and longer term health outcomes: the weight-for-height (wasting - short term) and height-forage (stunting - long term) z-scores. Using a quantile regressions approach, we find that public goods such as piped water and access to healthcare facilities are not associated with improving child health outcomes. On the other hand, private investments within the home such as pit latrines and flush toilets do have a strong influence on health outcomes, with the magnitude of the effects being the largest in the middle of the respective conditional nutritional distributions. Further, rural children at the lower end of the nutritional distribution benefit much more than their urban counterparts. We also find that the educational attainment of the mother has a strong association with better health outcomes, both in the short run as well as the long run. Finally, access to well water and boiling drinking water also matter, though their effects depend on whether the underlying health measure is a short term or long term one, and the child's relative position in the conditional nutritional distribution. Over all, our results provide evidence against one size fits all policies, and point towards incentives for private investments in sanitation and mother's education, especially in rural areas and for children in the middle of the conditional nutritional distribution.

State-led or market-led green revolution? Role of private irrigation investment vis-a-vis local government programs in West Bengal's farm productivity growth

We estimate the role of private investments in irrigation in farm productivity growth in West Bengal, India between 1982 and 95. Using a state-wide farm panel, we find that falling groundwater costs generated significant growth in value added per acre for farms. These resulted from investments in minor irrigation which was stimulated by tenancy registration programs implemented by local governments. This helps account for substantial spillover effects of the tenancy reform on non-tenant farms noted in an earlier study. Hence the West Bengal Green Revolution of the 1980s benefited from complementarity between private investment incentives and state-led institutional reforms.

An Analysis of Incentives for Network Infrastructure Investment Under Different Pricing Strategies

The Internet is making a significant transition from primarily a network of desktop computers to a network variety of connected information devices such as personal digital assistants and global positioning system-based devices. On the other hand, new paradigms such as overlay networks are defining service-based logical architecture for the network services that make locating content and routing more efficient. Along with Internet2's proposed service-based routing, overlay networks will create a new set of challenges in the provision and management of content over the network. However, a lack of proper infrastructure investment incentive may lead to an environment where network growth may not keep pace with the service requirements. In this paper, we present an analysis of investment incentives for network infrastructure owners under two different pricing strategies: congestion-based negative externality pricing and the prevalent flat-rate pricing. We develop a theoretically motivated gradient-based heuristic to compute maximum capacity that a network provider will be willing to invest in under different pricing schemes. The heuristic appropriates different capacities to different network components based on demand for these components. We then use a simulation model to compare the impact of dynamic congestion-based pricing with flat-rate pricing on the choice of capacity level by the infrastructure provider. The simulation model implements the heuristic and ensures that near-optimal level of capacity is allocated to each network component by checking theoretical optimality conditions. We investigate the impact of a variety of factors, including the per unit cost of capacity of a network resource, average value of the users' requests, average level of users' tolerance for delay, and the level of exogenous demand for services on the network. Our results indicate that relationships between these factors are crucial in determining which of the two pricing schemes results in a higher level of socially optimal network capacity. The simulation results provide a possible explanation for the evolution of the Internet pricing from time-based to flat-rate pricing. The results also indicate that regardless of how these factors are related, the average stream of the net benefits realized under congestion-based pricing tends to be higher than the average net benefits realized under flat-rate pricing. These central results point to the fallacy of the arguments presented by the supporters of net neutrality that do not consider the incentives for private investment in network capacity.

Aid for Trade-Harnessing Globalization for Economic Development

Aid for trade can support countries trying to further benefit from the expanding global market place by helping to address poorly performing infrastructure and institutions. Needless to say, good policies also matter: trade liberalization, improving incentives for private investment in trade, and reducing the costs and improving the quality of services. Market access also matters; accordingly, a successful conclusion to the Doha Round remains a top policy objective. The paper highlights three challenges and suggests some areas for further consideration/action: making competitiveness a pillar of country growth strategies; filling the remaining gaps in trade-related assistance; and expanding the overall aid envelope and making full use of opportunity to replenish the International Development Association.

Thailand: Opportunities and risks in a fast‐changing business environment

Thailand's business environment is changing dramatically in the wake of the worst financial crisis and economic recession in the country's recent history. Some of these changes may be ephemeral, and Thailand will return to old business practices once the crisis eases, but many of the economic and political reforms now being implemented can make trade and investment in Thailand easier, more transparent, and less affected by corruption. Some of the reforms will not deliver the expected results. Others may increase uncertainty that will be counterproductive in the short run. But some of the constitutional changes—the restructuring of family controlled conglomerates, better regulation of the financial sector, demands for stronger corporate governance, and new incentives for private investment—can have profound impacts on the country's business climate and the way American companies do business in Thailand. © 2001 John Wiley & Sons, Inc.

Thailand: Opportunities and risks in a fast‐changing business environment

AbstractThailand's business environment is changing dramatically in the wake of the worst financial crisis and economic recession in the country's recent history. Some of these changes may be ephemeral, and Thailand will return to old business practices once the crisis eases, but many of the economic and political reforms now being implemented can make trade and investment in Thailand easier, more transparent, and less affected by corruption. Some of the reforms will not deliver the expected results. Others may increase uncertainty that will be counterproductive in the short run. But some of the constitutional changes—the restructuring of family controlled conglomerates, better regulation of the financial sector, demands for stronger corporate governance, and new incentives for private investment—can have profound impacts on the country's business climate and the way American companies do business in Thailand. © 2001 John Wiley & Sons, Inc.

Private investment in livestock breeding with implications for public research policy

The private sector is playing an increasingly important role in livestock genetic improvement. Specialized breeding firms now supply virtually all commercial poultry breeding stock and growing market shares of improved genetic material for swine, beef, and dairy cattle. This article examines how incentives for private investment in livestock breeding are affected by consumer demand, market structure, intellectual property protection, new technologies, and market globalization. Survey results collected by the authors provide new evidence on the extent of private spending on livestock breeding. Implications of the findings for public and private roles in research on animal genetic improvement are discussed. © 2000 John Wiley & Sons, Inc.

Forest Research Priorities in Canada, 1993: An Overview for the Canadian Council of Forest Ministers

The Forestry Research Advisory Council of Canada in cooperation with provincial and territorial forest research advisory committees has prepared this fifth annual review of forest research priorities for the Canadian Council of Forest Ministers.The top five priorities from each committee were scored from 5 points for highest priority down to 1 point for lowest. The resulting 11 research topics in descending order of priority are:1. Integrated forest landscape management systems and decision support.2. Inventory, growth and yield, ecological site classification.3. Ecosystem functioning, soil and biodiversity conservation.4. Pest and weed management and alternatives to chemicals.5. Ecological effects of natural and human-caused disturbances.6. Lower-cost silviculture and harvesting, natural regeneration.7. Forest fire management and control.8. Socio-economic knowledge and resolution of resource use conflicts.9. Mixedwood management.10. Incentives for private investment.11. Planting stock quality and tree improvement.Eight issues likely to affect future research priorities were identified by more than one respondent, as follows:1. Global trade, competition, and world public opinion.2. Concern and input about sustainable forestry and the environment.3. Public participation.4. New policies on forestry, tenure, sales, and forest protection.5. Lack of long-term research funding, communication, and coordination.6. Shortage of fiber, long-term viability of the industry.7. Land claims and forestry on aboriginal lands.8. Increasing need for information at all levels.Other concerns include climate change, government debt, population growth and shifts, and protected and old-growth forests.Discussion of these priorities and issues at a meeting of FRACC and representatives from the provincial and territorial committees produced some general conclusions, as outlined below.To resolve resource use conflicts and to manage forests sustainably for all benefits, managers need better information that only research can provide. The goal is management systems that produce a blend of outputs from the forest and maintain the diversity and mosaic structure of naturalforest ecosystems. This kind of forestry will meet the desires of most Canadians and go far to restore public confidence in forest management.In short, research must provide additional knowledge to enable forest managers to:• Sustain the diversity and resilience of the forest ecosystems.• Improve forest health and resistance to pests.• Increase forest productivity for all values.• Reduce forest management and fire protection costs.• Access all available knowledge and data in making decisions.• Determine the socio-economic value of Canadian forests.• Improve profits and competitiveness in the forest industry.Many feel that forestry research in Canada is quite well focused on these questions, but more effort is required to ensure sufficient long-term funding and to improve local application of research results.The usefulness of this annual survey of research priorities was reviewed. It was concluded that the annual meeting of FRACC with representatives of provincial and territorial research advisory committees and the annual presentation to CCFM are very useful. However, a survey of priorities every year is, in the light of experience, unnecessary. A biennial review of priorities is recommended, with presentation to CCFM and subsequent publication. In the alternate years, a workshop of FRACC and provincial and territorial committee representatives is suggested, which would examine a major research topic in depth and present the results and conclusions to CCFM. A report could be published if appropriate.