Consumer Subsidies Research Articles

INVESTIGATING THE EFFICIENCY OF GOVERNMENT EXPENDITURE ON ENERGY CONSUMPTION (FUEL) SUBSIDY POLICY IN INDONESIA: AN APPLICATION OF STOCHASTIC FRONTIER MODEL

The energy consumption is projected to improve living standards and the economy of society. However, for achieving this objective, the government should spend much money in kind of subsidies especially in fuel oil. In several previous studies, they stated that the Indonesia government was experiencing a budget deficit due to their policy about fuel oil subsidy policy. Thus, the purpose of this study is to examine the efficiency of government spending regarding fuel oil subsidy policy in Indonesia. This study designed by using quantitative analysis collected from three data sources, namely Bank Indonesia, Central Bureau of Statistics, and the Ministry of Energy and Mineral Resources. The quarterly data for 21 years which consists of 1996 to 2017 analysed using the stochastic frontier model by assisting statistical software, namely Eviews 10. In this study, we examine the relationship government expenditure via fuel subsidy policy (FUELsubs) on economics growth (GDPpc). Also, the relationship between unemployment (UNEMPLY) and inflation rates (INFL). Besides, for analysing the efficiency of government expenditure on energy consumption (FUEL) subsidy policy in Indonesia, we use the estimation values of the stochastic frontier model through error components, vi and ui. The results of this study found the fuel subsidy policy does not meet the energy subsidy target for the Indonesian economy. Then, there is inefficiency in subsidies that impacts the tradeoff between unemployment and inflation. Keywords: Energy Consumption (Fuel), Fuel Policy, Fuel Subsidy, Government expenditure, Unemployment, Economic Growth.JEL Classifications: Q41, Q43, Q48, E62, E24, O11DOI: https://doi.org/10.32479/ijeep.9507

A Bilevel Optimization Model of Infrastructure-Dependent Technology Adoption: Overcoming the Chicken-and-Egg Problem

Many technologies in energy, transportation, and telecommunications require large infrastructure systems to deliver benefits to adopters and society. Policymakers seeking to promote the diffusion of infrastructure-dependent technologies are often confronted with the ``chicken-and-egg problem: consumers are reluctant to adopt the technology without adequate infrastructure available, and firms are reluctant to invest in infrastructure without a sufficient number of adopters. This chicken-and-egg problem can hinder the diffusion of new technologies and prolong the timeframe over which existing technological systems remain locked-in. In this paper, we formulate a stylized model of technology policy decision-making from the perspective of a policymaker who seeks to stimulate the market penetration of an infrastructure-dependent technology. Our model is a multi-level optimization problem in which a policymaker (first level) maximizes net social benefits by setting the levels of two incentives: a subsidy for a profit-maximizing firm (in equilibrium with two other firms, the second level) to invest in infrastructure that raises the benefit of adoption to consumers, and a direct subsidy for consumers to adopt the technology (third level). We analytically derive the firms' and consumers' optimal responses to the first-level policy decisions. Then, we analytically establish the optimal additional adoption — beyond the laissez-faire level — that the policymaker should stimulate by setting the subsidies. Finally, we present a case study on electric vehicle diffusion and obtain insights into how a policymaker should allocate resources to charging infrastructure and vehicle incentives. We also uncover a counterintuitive possibility where adoption can decrease with a technology's benefits.

Effectiveness of China's plug-in electric vehicle subsidy

Abstract Subsidies for promoting plug-in electric vehicle (PEV) adoption are a key component of China's overall plan for reducing local air pollution and greenhouse gas emissions from the light-duty vehicle sector. In this paper, we explore the impact and cost-effectiveness of the Chinese PEV subsidy program. In particular, a vehicle choice model is estimated using a large random sample of individual level, model year 2017 Chinese new vehicle purchases. The choice model is then used to predict PEV market share under alternative policies. Simulation results suggest that the 2.5% PEV market share of Chinese new vehicle sales in 2017 resulted in China's new vehicle fleet fuel economy improving by roughly 2%, reducing total gasoline consumption by 6.66 billion liters. However, the current PEV subsidy in China is expensive, costing $1.90 per additional liter of gasoline saved. This is due to a large number of non-additional PEV buyers, particularly high income consumers, who would have purchased the PEV regardless of the subsidy. Eliminating the subsidy for high income consumers and increasing it for low income consumers could result in a substantially lower cost per additional PEV ($13,758 versus $24,506). This would allow for greater PEV adoption (3.11% versus 2.47% market share) for the same budget. In terms of the impact of the recently announced subsidy reduction, results suggest that the PEV market share in China would have declined by 21% had the subsidy been halved without any countervailing measures. Using the same reduced budget, had zero PEV subsidies been given to high-income consumers and higher subsidies been given to low-income consumers, the PEV market share would have declined by only 8%.

Transitioning to high efficiency air conditioning in Saudi Arabia: A benefit cost analysis for residential buildings

This paper assesses the benefits of transitioning to high efficiency air conditioning (AC) equipment for existing units specific to the residential building stock in the Kingdom of Saudi Arabia (KSA). The analysis is based on a calibrated residential building stock model for Saudi Arabia supported by national statistics regarding the characteristics of AC systems. Various housing prototypes, vintages, and locations are included in the analysis. Specifically, the analysis considers the scaling up of the government's High Efficiency AC (HEAC) program which offers 900 Saudi Riyals (240 USD) per unit to consumers for up to 6 split system units with an energy efficiency rating (EER) of 13.0 or more per household. The main findings of the study suggest that upgrading the existing old stock of window units and split systems currently in place to the requirements of HEAC program would generate a reduction in electricity consumption of around 33 TWh/year and 24 million tons of CO2. Due to the effect of the HEAC consumer subsidy, purchasing a high efficiency unit has a simple payback period for the consumer of 5 years which is faster than less efficient AC options. This would come at a cost to the government of approximately 6 Billion USD resulting in an annual income of 3.0 Billion USD from the sale of avoided fuel associated with the saved electricity consumption.

Coordinating Electric Vehicle Charging Station Installation between the Government and Automakers

Accessibility of Electric Vehicle (EV) charging stations is an important factor for adoption of EV, which is an effective green technology for reducing carbon emissions. Recognizing this, many governments are contemplating ideas for achieving EV adoption targets, such as constructing extra EV charging stations directly or offering subsidies to entice automakers to construct more EV charging stations. To achieve these targets, governments need to coordinate with automakers to ensure that the total number of charging stations is planned optimally. We study this coordination problem by considering the interactions among the government, automakers, and consumers, our equilibrium analysis yields three major results. First, both the government and the automaker should build extra EV charging stations when their construction costs are independent. Simultaneously, the government should offer a per-station subsidy to the automaker only when the adoption target and the construction cost are both high. However, when the construction costs are dependent, the government should delegate the construction to the automaker by offering a per-station subsidy. Second, when the government considers consumer purchase subsidy as an extra lever, we find that the purchase subsidy for consumers is more cost-effective than offering a per-station subsidy to the automaker. Third, the structure of the optimal government policy remains the same regardless of whether the government's goal is to improve EV adoption or consumer welfare. Our results can serve as guidelines for governments when contemplating coordination with automakers for the construction of EV charging stations to improve EV adoption as well as consumer welfare further.

Optimal Pricing Strategy and Government Consumption Subsidy Policy in Closed-Loop Supply Chain with Third-Party Remanufacturer

Due to the increasing awareness of sustainable manufacturing, remanufacturing has been widely accepted by enterprises in many countries. In the process of Closed-Loop Supply Chain (CLSC) development, to stimulate the demand for remanufactured products, the Chinese government’s interventions such as the “Trade old for Remanufactured” program cannot be ignored. However, prior research has not answered the questions of whether governments should offer consumption subsidies and how to determine the optimal subsidy value. This paper investigates the optimal government consumption subsidy policy and its impact on the operation of Closed-Loop Supply Chain (CLSC) where an Original Equipment Manufacturer (OEM) produces new products, while a Third-Party Remanufacturer (TPR) remanufactures the used products collected from consumers. A game model with a leader (government) and two followers (OEM and TPR) is then introduced. The government determines the consumption subsidy to maximize the social welfare, while the TPR and OEM attempt to maximize their own profit functions. Game theoretic models are proposed to explore and compare the scenarios, i.e., CLSC with a consumption subsidy policy and without a consumption subsidy policy. The equilibrium characteristics with respect to the government’s consumption subsidy decisions and the price decisions for chain members are derived. Based on the theoretical and numerical analysis, the results show that: (1) governments should not always offer a consumption subsidy; (2) the consumption subsidy cannibalizes demand for new products while boosting the demand for remanufactured products; (3) the consumption subsidy should be shared between the TPR and consumers when the TPR raises the sales price of remanufactured product; (4) the members of the CLSC do not always benefit from the consumption subsidy policy.

Subsidizing mass adoption of electric vehicles with a risk-averse manufacturer

This paper explores how a risk-averse electric vehicle (EV) manufacturer responds to the government’s two types of subsidy mechanism: purchase subsidy for consumers and production subsidy for the EV manufacturer. This study develops a Stackelberg framework: the government, as the leader, designs the subsidy policy to reach the EV adoption target while the risk-averse EV manufacturer, as the follower, determines the production quantity and selling price. Using an analytical model that focuses on an additive demand function, we generalize closed-form solutions and present managerial insights. Results show that the risk aversion decreases the production quantity and increases consumer surplus, however, the manufacturer’s profit does not necessarily decrease with risk aversion because the production subsidy improves profit effectively. For the government, demand uncertainty costs the government more. With regard to consumer surplus, consumers tend to benefit under the condition of demand uncertainty; however, the shortage cost hurts them. Comparing the EV manufacturer’s profit, the shortage cost and demand uncertainty decrease profit. More importantly, we assess the different effects of the two subsidies by numerical experiments. Taken the government’s subsidy expenditure and social welfare as the performance metrics, the purchase subsidy is more effective with a less risk-averse manufacturer while the production subsidy is more effective with a more risk-averse manufacturer. Therefore, this paper recommends that the government not ignore the effects of the EV manufacturer’s risk aversion and demand uncertainty when designing subsidy policies.

EXPLORING THE EFFECTS OF INCREASED GOVERNMENT AGRICULTURAL EXPENDITURE ON NIGERIAN ECONOMY USING COMPUTABLE GENERAL EQUILIBRIUM MODELLING APPROACH

The study was conducted to examine the effects of increased government agricultural expenditure on Nigerian economy using computable general equilibrium (CGE) modelling approach. The research used simple, practically-oriented exposition of computable general equilibrium (CGE) modelling. The study relied strictly on secondary data, to estimate parameters of the model before simulation using the Nigerian Social Accounting Matrix (SAM) of 2012 as the base year data in General Algebraic Modelling System developed (GAMS) by IFPRI for this analysis. The 2012 SAM is the most recent SAM data for Nigeria. But after the parameters were estimated, the 2018 SAM data used for the simulation. This 2018 SAM data capture 83 activities, 84 commodities, 18 factors, 15 categories of households, 5 taxes, and 6 other accounts. The result shows that the introduction of 10% on government expenditure affects virtually many sector of Nigerian economy in a different ways. The findings of the study revealed that most macroeconomic variables have shown positive changes except for consumption in government investment which was reduce by 2.00%. The gross domestic product (GDP) at market prices increased by 0.28%, 1.05% on transport and communication and 0.73% for trade margin. On exports increase by 0.98 per cent, 0.36% and 0.59%. Other manufactured products increased by 2.1%, 0.7%, and 0.6%, other capital equally increases by 1.21%, 0.82% and 0.44%. Household income increase for rural for those with primary education at 0.22%, 1.7% and 1.72%. Changes in investment, affect rural labour for the non-school sector, which was reduced by 0.84%, although, the value of the land on government investments equally reduces by 0.69%, capital reduces by 0.76%, livestock equally reduces by 0.71%. The impact of 10.00% shock result in changes in urban household with primary education increases by 3.37% followed by labour household with secondary education with 3.17%. The study concluded, that application of 10.00% shocks impacted both positively and negatively on several sectors of the economy like GDP at market prices, sectoral GDP, prices, nominal household income and export. The study recommended the need for government at all tiers to examine the effect of such policy on other sectors of the economy. It is therefore recommended that Government should enhance expenditure by 10.00% to stimulate productivity, output and consumption, Govt. should support short term agricultural consumption subsidy policy measure, increase government investment on research and development (R&D).

Optimal Innovation Investment: The Role of Subsidy Schemes and Supply Chain Channel Power Structure

We investigate the impact of government subsidy schemes and channel power structure on the level of innovation in a two-tier supply chain. Our results indicate that consumer subsidies are more effective than producer subsidies in promoting innovation investment for a given channel power structure. Regardless of the power structure, supply chain members, consumers and society benefit more from consumer subsidies. If government subsidies are absent, innovation investment is higher when neither member of the supply chain dominates, and consumer surplus and social welfare are also higher in the Nash game. Under the consumer subsidy scheme, although government expenditures are higher in the manufacturer-led game, innovation investment is the same under different power structures, and consumer surplus and social welfare are also, in turn, the same. Under the producer subsidy scheme, the manufacturer invests more in innovation, and government expenditure is also higher when the retailer dominates the supply chain. Under producer subsidies, consumers and society benefit from the presence of powerful retailers when the investment cost is lower, and consumer surplus and social welfare have an inverted U-shaped relationship with the retailer’s power otherwise.

Cronyism as an outcome of institutional settings: the case of pre-2011 Egypt

PurposeWhy are state business relations in Egypt characterized by widely acknowledged high levels of cronyism? The purpose of this paper is to investigate the institutional factors explaining this research question with a focus on pre-2011 Egypt.Design/methodology/approachBased on a general theoretical discussion, certain institutions were proposed as being responsible. A game theoretical model is then introduced. It explains why cronyism was the best strategy for various business players in contrast to aggregating and lobbying their efforts to obtain government available resources, whether these resources are energy subsidies, public banks’ credit or regulations. Then pre-2011 Egypt is discussed as a case study. This discussion is enriched by the available literature and empirical data.FindingsChoosing cronyism was attributed to the presence of a weak and dependent private sector, where businesspeople are unable to aggregate their power; a relatively stronger government; poor governance performance; higher levels of regime legitimization practices, such as providing generous consumer subsidies; and economic growth caused by an increase in resources rather than by governance institutional improvement. A discussion of the available literature and empirical data on pre-2011 Egypt, going over the various proposed institutional factors, helped to support these arguments.Research limitations/implicationsFurther empirical evidence is needed to support and modify the suggestions of this paper. More detailed indicators would have further helped this research. Moreover, more case studies, other than the case of pre-2011 Egypt, are also needed. It is hoped that this paper would encourage further research endeavors that would cover these limitations.Practical implicationsGovernance institutional reform is needed to minimize cronyism, especially institutions such as voice and accountability, rule of law, regulatory quality and control of corruption.Social implicationsThis paper can explain why high levels of cronyism are witnessed in many countries of the world, including the countries of the Middle East and North Africa (MENA). The region shares many institutional factors with Egypt. Governments in the MENA region have various sources of power with regard to their dependent private sectors added to the general poor performance in various governance indicators in the region.Originality/valueThe deep analysis conducted in this paper for the causes of Cronyism in Egypt has not been done elsewhere. This is also true for the whole MENA region. The introduced theoretical model is the first trial of this sort and should be important for future works on this topic in the MENA region and developing countries.

State Patronage on Heat and Electricity Markets of the Russian Far East

The paper examines the conditions and goals of state patronage on heat and electricity markets of the Russian Far East. The distinct characteristic of market organization in the region is the lack of a unified energy system, high share of districts with decentralized energy supply, and segmentation of the electricity market. Based on the technological and institutional similarities, scale and form of state patronage, three zones of electricity market were established: market, semi-market, and regulated. The forms of state patronage on heat and electricity markets of the Far East are the following: state regulation of heat and electricity tariffs, setting the tariffs below actual costs, subsidies for providers and consumers of energy, state-sponsored construction of energy capacities. The paper evaluated the scale of patronage on heat and electricity markets and reached the conclusion that without state patronage the Far Eastern consumers of heat and electricity will not be able to purchase energy in market conditions.

Yours is Bigger than Mine! Could an Index Like the Pse Help in Understanding the Comparative Incidence of Industrial Subsidies?

State support remains a leading cause of tension in international commercial relations. Governments can see trade distortions that look like they were caused by industrial subsidies, but they lack the data to illuminate that state support. In the 1980s at the height of the farm wars the Organisation for Economic Co-operation and De-velopment (OECD) developed an index that helped countries to see the overall incidence of agricultural subsi-dies, initially called the Producer Subsidy Equivalent (PSE) and the Consumer Subsidy Equivalent (CSE). Are there lessons for today in the PSE approach? In this paper I try to answer that question from the standpoint of economics: how did the PSE evolve, what is it, is the concept relevant to industrial subsidies? And of politics: how was OECD able to create the tool, and do present conditions permit something similar? The brief answer is that the PSE was a response to a shared perception of crisis, but it was pushed by finance not trade or agricul-ture ministers. It drew on well-established concepts in the agricultural economics and trade literatures. And it works best in a context where market power is sufficiently diffuse that a price gap between domestic and world prices can be calculated. Only some of those conditions can be met when applying the approach to concentrat-ed industries dominated by large firms that operate in multi-country supply chains.

For politics, people, or the planet? The political economy of fossil fuel reform, energy dependence and climate policy in Haiti

The uneven effects of the climate crisis and the need for decarbonization by reducing fossil fuel exploitation and eliminating subsidies create critical trade-offs and tensions for low-income developing countries. Recent reform of fuel consumption subsidies has shown a perennial mitigation bias largely imposed by external forces, in particular multilateral agencies and foreign governments in the context of the Paris accord. Contradictorily, external pressures to reduce subsidies have created competitive markets for multinationals to have a disproportionate role in supplying energy products which foreground the inequities in Haitian society that have spurred social and political resistance. Empirical work on energy-subsidy reform and climate policy do not sufficiently interrogate the interplay and implications of underlying assumptions, power imbalances between domestic and foreign actors, the challenging infrastructural and political context of renewable energy promotion, and immediate concerns to address worsening social conditions and development priorities. Drawing upon these policy debates, this paper considers the recent experience of Haiti to reform its energy subsidies required by the International Monetary Fund to enforce austerity. The paper takes a more integrated and critical approach to these policy discussions in a context of interconnecting political and socio-ecological crises and climate policy in Haiti. By inductively analyzing Haiti's main climate and energy policies and evidence drawn from field experience, the paper offers a more nuanced understanding of decarbonization and energy debates in this extremely vulnerable context. This approach gives priority to a more dynamic historical analysis of the socio-political context and factors that seek to advance climate justice.

Redefining the social contract in the wake of the Arab Spring: The experiences of Egypt, Morocco and Tunisia

Abstract The social contract is the deal between the state and its citizens by which the latter agree the rule of the former in return for deliverables Over time, the state’s deliverables have evolved from simple law and order to a set of social rights, such as the social contract in North African countries like Egypt, Morocco and Tunisia –in the 1950s and 1960s. State-led development, including state-led industrial development, provided jobs to many, with state provision of health and education and a range of consumer subsidies. Deteriorating economic performance led to the collapse of this model as the state could no longer provide these deliverables. Instead, an ‘unsocial’ social contract emerged under liberalisation in which the state used trade, industrial and other economic policies to favour an emerging group of crony capitalists who in turn provided support for the regime. The growing inequality and diminishing benefits for the masses undermined its sustainability resulting in the Arab Spring. The trajectory of the social contract has differed in the three countries. In Egypt, the ‘unsocial’ social contract is further entrenched. The army is taking the role of a leading business-group using industrial policy to political ends. Its strong engagement in the economy makes it an interested party rather than an impartial arbiter. In Morocco, the King still retains a prime position but has accommodated some pressures for a more inclusive industrial policy in domestic markets, which may lay the basis for a more broadly based social contract. Tunisia is finding its way to an even more inclusive development model, but is still struggling for consensus for a clear economic policy direction and remains threatened by extremist elements. International efforts to support democratic development in these countries need to be conditioned on the differing nature of the ongoing transitions in the social contract.

For Politics, People, or the Planet? The Political Economy of Fossil Fuel Reform, Energy Dependence and Climate Policy in Haiti

The uneven effects of the climate crisis and the need for decarbonization by reducing fossil fuel exploitation and eliminating subsidies create critical trade-offs and tensions for low-income developing countries. Recent reform of fuel consumption subsidies has shown a perennial mitigation bias largely imposed by external forces, in particular multilateral agencies and foreign governments in the context of the Paris accord. Contradictorily, external pressures to reduce subsidies have created competitive markets for multinationals to have a disproportionate role in supplying energy products which foreground the inequities in Haitian society that have spurred social and political conflict. Empirical work on energy-subsidy reform and climate policy do not sufficiently interrogate the interplay and implications of underlying assumptions, power imbalances between domestic and foreign actors, the challenging infrastructural and political context of renewable energy promotion, and immediate concerns to address worsening social conditions and development priorities. Drawing upon these policy debates, this paper considers the recent experience of Haiti to reform its energy subsidies required by the International Monetary Fund to enforce austerity. The paper takes a more integrated and critical approach to these policy discussions in a context of interconnecting political and socio-ecological crises and climate policy in Haiti. By inductively analyzing Haiti’s main climate and energy policies and evidence drawn from field experience, the paper offers a more nuanced understanding of decarbonization and energy debates in this extremely vulnerable context. This approach gives priority to a more dynamic historical analysis of the socio-political context and factors that seek to advance climate justice.

Global fossil-fuel subsidy reform and Paris Agreement

The recent downward trend in the international energy prices, combined with the rapid transition in the national energy mix and widespread efforts towards national energy market liberalization have challenged the mitigation potential of the global fossil-fuel subsidy reform. In this paper, we focus on 25 countries with large fossil-fuel consumption subsidies and estimate the impacts of fossil-fuel subsidy reform on achieving country-specific emissions reduction targets defined by the Nationally Determined Contributions (NDCs) under different oil price projections. Our results suggest that the elimination of the fossil-fuel consumption subsidies could be an effective mechanism for meeting NDC targets for an important subset of countries, even if only leading to global emissions reduction of between 1.8 and 3.2% in 2030 depending on the oil price scenario. Out of 17 countries with binding unconditional NDC targets, nine overreach their 2030 commitments under high oil price scenario and six under low global oil prices. Furthermore, eleven countries reach at least 50% of their NDC reduction targets following subsidies elimination under low global oil price path.

Energy Efficiency Obligations and Subsidies to Energy Intensive Industries in Latvia

Abstract The European Union’s climate and energy policy for 2030 sets ambitious targets and will challenge current energy use patterns. At the same time, policy objectives are to maintain energy affordable for business and consumers, which means that energy and climate goals should be achieved in the most cost-effective way. There is a well-known energy efficiency gap between effectively implemented energy efficiency measures and potentially economically viable ones. The authors have made a statistical analysis of the energy costs intensity of manufacturing industries in Latvia compared to other Baltic Sea countries and have consented that the three most energy consuming manufacturing industries in Latvia show a higher share of energy costs in total production costs than in their peers over a long period of time, indicating the clearly visible possibilities for energy efficiency improvements. At the same time, Latvian energy policy provides subsidies for energy-intensive manufacturing consumers by reimbursing part of their actual electricity costs. The paper analyses the amounts of reimbursements and their breakdown by manufacturing industries, identifying the most important beneficiaries of subsidies. The authors argue that beneficiaries should direct these subsidies to further energy efficiency improvements.

Examining the relative influence of animal movement patterns and mortality models on the distribution of animal transported subsidies

Active subsidies are animal-transported consumption (e.g., predators, pathogens, parasites) and resources (e.g., prey, detritus, nutrients) moved between ecosystems. Animal movement behavior has the potential to mediate the extent and intensity of active subsidies and corresponding ecosystem responses. Animal movement behaviors could interact with mortality risk to affect active subsidy distributions and ecosystem impacts but have rarely been examined in existing ecosystem models of spatial subsidies. Movement ecologists typically simulate animal dispersal and foraging movements using stochastic random walk models such as correlated random walk (CRW) and Lévy walk (LW) models. Movement models generally implement mortality as an instantaneous mortality rate (i.e., probability of death per step). Variation in CRW and LW movement patterns, in combination with mortality rate level and model, can likely change emergent subsidy distributions and impact. Using a spatially explicit individual-based model (IBM), we quantify how variation in the straightness (i.e., CRW) and step length (i.e., LW) of animal movement patterns with variation in mortality rate and model (i.e., distance-dependent versus time-dependent function) alter the intensity and extent of consumer and nutrient subsidy distributions. Movement pattern was a dominant determinant of subsidy displacement with more pronounced effects on consumer (i.e., living) subsidy (e.g., predators) patterns. Mortality rate and mortality model (i.e., distance-dependent versus time-dependent on LW) strongly predicted subsidy density with stronger effects on nutrient (i.e., dead) subsidy (e.g., feces) patterns. Consumer subsidies were deposited farther and at lower densities than nutrient subsidies. Given lower mortality rate, movements with more variable step lengths displaced both nutrient and consumer subsidies farther and at lower densities than straighter movements. Movements with more variable step lengths also resulted in greater nutrient subsidy numbers at lower densities with higher mortality rate in distance-dependent compared to time-dependent mortality models. We conclude that ecosystem modeling frameworks that incorporate interaction between animal movement behavior and mortality conditions will enhance insights into active subsidy distributions.

Continued firewood use after decades of access to low-cost LPG

PDS 64: Health impact assessment and environmental justice, Johan Friso Foyer, Floor 1, August 26, 2019, 1:30 PM - 3:00 PM Background: Household air pollution, one of the world’s largest environmental health hazards, is a modifiable risk factor amenable to intervention through cleaner cooking. Over the last 40 years, large direct consumer subsidies for LPG have facilitated the national transition of Ecuador’s population from cooking with biomass and kerosene to cooking with LPG. Now, more than 90% of households cook primarily with LPG. Methods: We administered 808 surveys to primary household cooks in eight rural and peri-urban communities across four provinces in the coastal and Andean regions of Ecuador to identify current fuel use patterns, fuel costs and accessibility, and motivations for observed patterns. A sub-sample of 160 primary cooks across four communities received 48-hour time-resolved PM2.5 exposure monitoring, with a 20% subset receiving a co-located gravimetric filter PM2.5 monitor. All stoves were monitored using temperature loggers. Results: Over 99% of households reported daily LPG use and most more than once a day. Households reported more than 20 years of historic LPG use and unconstrained access to cylinders. Nevertheless, 40% of households reported using firewood as a cooking fuel, nearly always as a secondary alternative to LPG (20% peri-urban; 52% rural), and 60% of rural firewood users reported at least weekly use. Mean 48-hour PM2.5 exposure was estimated to be 35 µg/m3 and 20% of estimates were above the WHO Interim-I guideline of 35 µg/m3. Conclusions: By leveraging the unique conditions of Ecuador, we offer novel assessments of cooking fuel use patterns and personal exposure to PM2.5 in the context of decades of low cost, accessible clean cooking fuels in a middle-income country. Our data suggest that cessation of traditional biomass use is a separate behavioral transition from the adoption of clean fuels, potentially limiting the health benefits of adoption-focused clean cooking efforts.

Dual credit policy: Promoting new energy vehicles with battery recycling in a competitive environment?

Abstract New energy vehicles have been recognized as the future direction of development in automobile industry. This paper investigates the issue of the impacts of subsidy policy and dual credit policy on new energy vehicle and fuel vehicle production decision considering battery recycling, in a competitive environment, where the market demand is determined by heterogeneous consumers' utility. Due to that the market size of new energy vehicles is swiftly expanding, used battery is ushering in a period of renewal and replacement, but the performance efficiency of two policies is unclear in the presence of battery recycling. Considering the market of three primary players, the new energy vehicle manufacturer, the fuel vehicle manufacturer and government, non-cooperative game models are formulated in which the battery recycling rate and consumers' environmental awareness are taken into accounts. Both the optimal policy decision for the government and the manufacturer is analyzed under three scenarios: subsidy policy, dual credit policy with single credit, and that with two credits, respectively. The results show battery recycling rate is the most crucial element influencing the new energy vehicle manufacturer's competitive status under both policies. Meanwhile, no matter how changes in values of consumers' environmental awareness, recycling rate, and subsidies for consumers, the new energy vehicle manufacturer stays a vulnerable position unless the government offers a new financial subsidy for the new energy vehicle manufacturer, rather than for consumers. Additionally, only in case of dual credit policy with two credits, increasing battery rate yields a demand spillover effect with a maximum percentage of 20.59%, which further verifies the efficiency of dual credit policy over subsidy one.