This paper estimates how retail fuel prices and cross-border price differentials affect recorded domestic road-fuel sales in the European Union, using harmonized monthly panel data for 24 countries from January 2008 through December 2025. We use tax-induced variation in retail prices, instrumenting domestic prices and relative price gaps with statutory fuel-tax variables in two-stage least squares models with country and month fixed effects. We complement the country-month analysis with directed dyadic IV specifications that compare home and neighbouring countries within land-border pairs. The outcome is recorded domestic fuel sales, not physical fuel consumption within national borders, so the estimates capture both changes in fuel use and shifts in the location where purchases are recorded. For diesel, the preferred country-month IV estimate implies an own-price elasticity of approximately −1.40 for recorded domestic road-diesel sales. For gasoline, the preferred estimate is also negative, approximately −0.78, although it is less stable across demanding sensitivity specifications. The clearest evidence of cross-border reallocation comes from the dyadic IV design. When the dyadic price differential is defined as the neighbour's log price minus the home country's log price, the cross-border coefficient is positive and close to +0.53 for both diesel and gasoline. This means that recorded domestic sales increase when neighbouring countries become more expensive relative to the home country. The findings imply that uncoordinated national fuel-tax changes can shift where purchases are recorded, potentially eroding domestic tax bases and complicating the interpretation of national fuel-sales statistics in integrated markets.
Maritime transport, responsible for roughly 3% of global greenhouse gas emissions, faces overlapping carbon-pricing regulation as the EU Emissions Trading System extends to shipping and the International Maritime Organization develops a prospective Net-Zero Framework with tradeable Remedial Units. This raises a central question: whether instrument interaction, rather than the stringency of any one measure, changes firm-level investment when carbon prices are held fixed, and how it shapes investment policy and the value of flexibility under uncertainty. We develop a correlated three-factor real-options framework using Longstaff–Schwartz continuation-value estimation with independent validation and test-sample policy evaluation, jointly modelling freight, fuel and carbon prices with calibrated cross-correlations and a Poisson hazard model for regulatory activation. We apply it to a Long Range 2 product tanker across four regimes: EU ETS phase-in, sustained regional fragmentation, and EU ETS plus IMO under netted or stacked interaction rules. Three findings emerge. First, regulatory architecture is economically material: netted versus stacked rules shift strategy NPVs by approximately $1 million at unchanged carbon prices. Second, the efficiency-first ranking is preserved across all regimes, including fragmentation where effective carbon exposure nearly doubles. Third, direct fuel-price support of about $200–300 per tonne substantially improves staged alternative-fuel pathways but does not eliminate the structural advantage of low-CAPEX efficiency retrofits, indicating that per-tonne support narrows but does not close the remaining economic gap. Results are robust across sixteen sensitivity dimensions and Capesize and feeder cross-segment checks.
China's emissions trading system (ETS) is a key market-based strategy to meet its ambitious “dual‑carbon” targets of peaking emissions and reaching neutrality. Unlike “cap-and-trade” markets that limit total pollution, China's “rate-based” system adjusts permits based on production intensity. To understand how this unique design and “allowance banking”—saving permits for future use—influence long-term stability, this paper develops a discrete-time equilibrium model for the power sector. Theoretically, we show that China's rate-based approach better balances industrial growth with emissions abatement than traditional caps. The numerical simulations show that, under the rate-based approach, allowance prices rise steadily, carbon emissions decline continuously, thermal power output contracts moderately, and trading volume exhibits an overall upward trend. These results remain robust across alternative discount-rate assumptions. A comparison between cap-and-trade and rate-based approach further reveals that, when cumulative allowance allocation is held constant across regulatory regimes, rate-based approach results in higher allowance prices and greater thermal power output in most periods. These findings clarify the dynamics of intensity-based markets, providing a vital roadmap for policymakers to manage price stability and ensure the market's long-term success.
AbstractThis study examines how oil price shocks (supply, demand, and risk) are transmitted to private markets (Private Equity and Unicorns), an area largely absent from the literature that has focused almost exclusively on public financial markets. To test the hypothesis, we utilize Morningstar private market indices, including developed market private equity and unicorn indices across Asia, Europe, the United Kingdom, the United States, India, and China, and apply vector autoregressions, Markov-switching models, and wavelet quantile methods. Overall, oil price shocks transmit asymmetrically across private market segments, with developed market private equity exhibiting systematic sensitivity while unicorn markets remain largely insulated. Results show that developed market private equity is systematically responsive across all three shock types: supply and demand shocks lower returns, while risk shocks deepen losses during crisis regimes, with transition probabilities confirming prolonged distress following supply disruptions. Impulse response functions confirm demand shocks produce the broadest immediate effects, while wavelet analysis reveals short-term vulnerabilities in unicorn markets that dissipate over longer horizons. Only China and US unicorns register partial sensitivity under supply shocks, suggesting that growth dynamics and appraisal-based valuation dampen oil shock transmission broadly. For practitioners, the findings indicate that oil shocks alter private equity risk premia but carry limited implications for unicorn assets, offering novel insights for asset allocation, diversification, and systemic risk monitoring.
Against the backdrop of advancing high-quality development and green transition, the construction of cross-regional power transmission projects has emerged as a pivotal initiative for fostering a green, low-carbon, and high-quality spatial pattern. This study focuses on Chinese industrial enterprises, treating the commissioning of the West-to-East Power Transmission (WEPT) project as a quasi-natural experiment of cross-regional power resource allocation. Employing a multi-period difference-in-differences (DID) model, we empirically investigate the mechanism by which cross-regional power resource allocation through the WEPT project affects enterprises' green productivity. The findings indicate that the WEPT project has a significant positive effect on enterprises' green productivity, primarily through improved efficiency in allocating green resources. This project alleviates the cost burden on enterprises by mitigating regional electricity price distortions and facilitating industrial agglomeration, thereby stimulating their investment in emission-reduction equipment and enhancing their green productivity. Meanwhile, the impact of the WEPT project on enterprises' green productivity is asymmetric: it primarily improves green productivity in power-importing regions, at the terminals of thermal power transmission lines, and among state-owned and small- and medium-sized enterprises. Furthermore, the capacity enhancement enabled by the technological iteration of the WEPT project and the expansion of the layout scope facilitated by its technological selection have notably propelled the green transformation and development of enterprises. This driving effect not only fosters enterprises' green development through energy-saving effects but also operates via emission-reduction effects, with the latter being more prominent.
Rural hybrid renewable energy systems (RHRES) are the primary means of achieving a low-carbon energy transition in rural areas. However, existing RHRES have paid insufficient attention to the application potential of green ammonia, failing to fully leverage its green value in energy utilization and agricultural production. To address this, we constructed an agricultural park hybrid renewable energy system (APHRES) based on the diverse synergistic utilization of green ammonia. It employs Power-to-Ammonia to convert surplus green electricity into green ammonia, which is then used for seasonal energy storage (SES), zero-carbon power generation, and green fertilizer production, thereby expanding the application scenarios of green ammonia in rural areas. We constructed a low-carbon operation optimization model for APHRES based on cost minimization, incorporating energy supply and demand fluctuations observed on typical days across seasons, and conducted simulation analysis using seven progressive scenarios. The results indicate that: (1) integrating biogas power generation with bioenergy with carbon capture and storage (BECCS) improves economic efficiency and carbon reduction, compared with the baseline scenario, total costs are reduced by 27.90%, and carbon emissions decreased by 37.75%; (2) the green ammonia-driven green fertilizer pathway can replace traditional high-carbon fertilizers and increase energy sales revenue by an additional 17.14%; (3) ammonia use in SES mitigates mismatches between renewable energy fluctuations and seasonal agricultural loads, enhancing standalone system operation; and (4) carbon market mechanisms, green product prices, equipment investment costs, and green ammonia subsidies are critical determinants of APHRES adoption and the market competitiveness of green ammonia and green fertilizers. This study proposes a sustainable production model for agricultural parks that combines green electricity, green ammonia, and green fertilizers, offering a replicable and innovative pathway for the low-carbon transition of rural energy.
The Rural Hydropower Primary Electrification (RHPE) program, implemented during the 1980s and 1990s, marked an important transition from traditional energy sources to electricity in rural China. This paper employs a cohort difference-in-differences (DID) strategy to examine the long-term effects of the RHPE program on women's labor market outcomes. We find that preschool exposure to the RHPE program significantly improved girls' later-life labor market performance, whereas no comparable effect is observed for boys. We find little evidence that this effect operated through a reduction in household labor burdens. Instead, gender-differentiated improvements in human capital accumulation appear to be the main mechanism. Our findings highlight the gender-specific and long-lasting effects of rural electrification on individual economic outcomes.
This paper examines the impact of carbon futures and geopolitical conditions on the derivative segment of the energy market. We sourced data from January 4, 2017, to March 31, 2024, and bifurcated it into subperiods, with the second period coinciding with the Russia-Ukraine crisis, to analyze connectedness, risk embeddedness, and tolerances. We used time-varying parameter vector auto-regression (TVP-VAR) and a double-layer network framework to unveil the structural transformation of energy markets under geopolitical constraints. The study indicates that geopolitical risk is a significant contributor to spillover in both periods, with spillover being more pronounced in the second moment than in the first, particularly during the escalation of the war. Second, the double-layer network reveals that future market factors geopolitical distress resulting uncertainty. The tolerance for energy futures under geopolitical constraints declined during the Russia-Ukraine war, underscoring the vulnerability of energy assets during periods of war. These findings have significant implications for policymakers, investors, and risk managers. The results indicate that growing intensification can disrupt the functioning of energy markets and increase the risk of embeddedness in the interwoven markets.
This paper makes two original contributions. First, it introduces the concept of the natural level of oil prices, defined as the real price consistent with long-run supply and demand fundamentals in the absence of transitory shocks. Based on a cointegration framework linking oil prices to global industrial production, OPEC production, and non-OPEC production, the natural level provides a long-run anchor for oil prices, distinguishing temporary dislocations from permanent changes in oil markets.Second, splitting oil production between OPEC and non-OPEC producers in cointegration analysis is essential for identifying the natural level of oil prices, since their respective long-run impact on oil prices is not homogeneous.Empirical evidence indicates that transitory deviations from the natural level typically dissipate within 18–24 months. When we evaluate the out-of-sample forecasting performance of the proposed framework against the random walk, Hodrick–Prescott and Hamilton filters, and futures prices, the cointegration-based error-correction model consistently delivers the most accurate medium-term forecasts, reducing RMSE and MAE by 13%–22% relative to the random walk at 12–24-month horizons. We also derive a tractable decomposition of the oil risk premium as a function of the gap between observed and natural prices, showing how the natural level shapes expectations through the futures term structure.The proposed framework helps policymakers to distinguish persistent from transitory oil-price movements. It also provides investors and energy-market firms with a benchmark for assessing commodity-price risks, investment decisions, and long-term capital planning.
The pandemic has exposed significant vulnerabilities within the U.S. supply chains. To enhance the resilience of lithium-ion battery supply chains, the Biden administration has implemented a series of policies. This study comprehensively examines the U.S. policy framework, which includes a domestic policy structure consisting of a “Vertical Policy Hierarchy-Cross-Cutting Strategies-Policy Instrument” model, international cooperation, and tariffs. It also provides a holistic depiction of the lithium-ion battery supply chain risk assessment matrix and conducts an in-depth analysis of both domestic production and international supply chains. Lastly, this study offers preliminary correlational evidence of the effectiveness of these policies in strengthening supply chain resilience. Key findings include: 1) the overall resilience of the U.S. lithium-ion battery supply chain has not substantially improved; 2) domestic investments and jobs have increased, yet demand gaps persist; 3) import diversification coexists with concentrated dependency on critical minerals, the reliance on China for upstream resources has decreased through friend-shoring, but downstream dependency has intensified, accompanied by declining HDI and EPI scores and elevated climate and conflict risks; 4) international cooperation has reduced disruption risks, but high tariffs have been positively correlated with import concentration, supply chain distance, and geopolitical risks, failing to resolve explicit and implicit dependencies on China.
