Irrespective of the analytical methods used, RIA can assist to avoid the implementation of poorly designed regulations, even when it is not particularly complicated. For example, in 2012, Australia enacted the Road Safety Remuneration Act. This proved to be an example showing the potential shortcomings of ill-designed RIAs (Deighton-Smith, 2016). The Act aimed to alleviate a stagnation in annual fatalities involving articulated trucks. Allegedly, there was a correlation between drivers’ remuneration and unsafe driving behaviours. To address the issue, the Act established a quasi-judicial tribunal with price setting powers in relation to minimum road freight rates. While RIA was conducted in conjunction with theintroduction of the Act, a subsequent review revealed a number of deficiencies. First, theRegulatory Impact Statement assessingthe effects of the proposed legislation was only drafted a year after the political decision to introduce minimum rates was made. Secondly, the technical quality of the RIA was low. There was, at best, limited evidence of stagnation in annual fatalities or the existence of a link between remuneration and safety. Also, the original RIA did not provide a comprehensive account of economic benefits and costs, even in a qualitative manner. The subsequent review, together with protests from those the Act most directly affected, led to the Act being repealed before the tribunal’s decision took effect. This illustrated the importance of quality RIA, even after regulation has been introduced, to ensure policy effectiveness and prevent unnecessary cost or damage to competition.
Energy integration across electricity, heating & cooling
and thetransportsector – Sector coupling 1
1 IntroductionThe EU plans to cut Greenhouse-Gas (GHG)-emissions to 80% below 1990-lev- els by 2050 and to 40% by 2030. In the frame of the European Green Deal the European Commission in 2020 announced a comprehensive plan to increase the European Union's emissions reduction target for 2030, from 40 % towards 55 %, (see European Commission (2019)). In order to achieve climate targets, renew- able energy sources (RES) are required to replace fossil fuels. This includes the substitution of fossil fuels with RES not only in the power sector, but also in other sectors and applications such as heating, industry or transport. However, the cur- rent use of RES in certain industry branches, heating & cooling as well as in thetransport sectors is rather limited. In addition, potentials for the direct use of RES e.g. in thetransportsector are limited or its development is not desirable for cer- tain reasons. In case of thetransportsector, a further development of first gener- ation biofuels made from food crops and grown at arable land (e.g. bioethanol, biodiesel) is considered critically due to several concerns such as sustainability issues and the "food vs. fuel" debate. Instead, electric cars using renewables- based electricity (RES-E) are one alternative decarbonisation option for thetransportsector. Generally speaking, new technologies and applications using renewables-based electricity can contribute to decarbonising sectors or applica- tions with a low GHG-reduction potential.
1. INTRODUCTIONThe global financial crisis in 2008 can be attributed to a number of factors, but the main root causes were (i) inadequate supervision, including a large unregulated shadow banking sector; and (ii) systemic risks originated from financial imbalances in several economies and the interconnectedness of financial institutions’ balance sheets through leverage and the creation of opaque products. In response, the Basel Committee on Banking Supervision (BCBS) developed a new financial regulatory framework to reform, improve, and strengthen the finance sector, as well as to reduce systemic risks and enhance financial stability, taking into account the lessons learned from the crisis. The G20 nations have also called for international financial institutions to work on a number of reforms to strengthen the stability of the global financial system. These proposals, collectively called Basel III, released in December 2010, are extensive, with multiple dimensions and components. The implementation of capital requirements, a major component of Basel III, is due to start from January 2013 according to a phase-in timetable. In addition, there are already some regulatory and legislative changes at the national level, such as the United States (US) Dodd-Frank Wall Street Reform and Consumer Protection Act and the European Market Infrastructure Regulation, which will no doubt have implications beyond their respective borders. Because of the extensive coverage and implications, Basel III is expected to substantially change the global financial regulatory landscape.
The problem of the unknown set of the relevant explanatory variables is solved with the use of the BMA algorithm. However, we do make an assumption that the process of GDP beta conver- gence does take place and do not wish to check for it and so the lagged GDP is included in every regression. The reason for this treatment is the fact that there exists hardly any research pointing to nonexistence of the relative convergence process in longer time horizon and so the lagged GDP can be almost surely treated as a relevant variable in the regression. Dropping it from the esti- mated models would thus almost surely mean making an omitted variable bias error. Naturally, that is a nature of the BMA algorithm itself; however, it is unnecessary if for a given variable there exist suf ﬁcient reasons to undoubtedly treat it as relevant and just keep it inside every esti- mated equation. We follow a similar procedure with regulatory environment measures; however, in their case the reason does not come from the certainty regarding their relevance but is due to limiting the attention to the equations in which regulatory environment measures are present since the study is pro ﬁled at estimating their inﬂuence on economic growth. While a given indicator is included in an equation, its square is included as well for the above-mentioned reason. However, since the set of considered environment indicators differs between particular models, we provide the more detailed explanation on which indicators were included and what the algorithm of their selection was separately for every estimated model. In general, the number of considered candi- date variables was low enough to enable estimation of every possible M j without restricting the
Internationally agreed environmental and social stan- dards must be met in the medium term. The German government should considerably expand such tools as raw material partnerships, certification, and internatio- nal cooperation and in this context better coordinate the work of the respective ministries responsible for diffe- rent aspects of environmental protection, economy, and economic cooperation and development. In addition, it should strive for the establishment of a raw material in- ventory at the national and European level so that the business sector can plan the establishment of recycling structures prospectively and make long-term estimates about the volumes of secondary raw materials expected. The need for research for innovative treatment and re- cycling technologies could be derived from that inven- tory, as could deficits in the creation of needed infra- structures. In the medium term, the inventory should not only cover vehicles, but also other products, in particular technologies installed to generate and store energy – but also consumer items such as electrical and electronic equipment. In this way, it can be determined whether there are similar, simultaneous waste flows for different products that can be joined together for re- cycling. The inventory could be hosted at the German Institute for Geosciences and Natural Resources (BGR) in cooperation with the German Environment Agency (UBA) in order to be directly connected to the topic of raw material demand.
Framroze Møller (2008) discusses how to bridge the gap between the ‘theory first’ and the ‘reality first’ approaches by starting from a simple theoretical model and then showing how this model could be analyzed in a cointegrated VAR model. By doing this he shows that there is a close correspondence between basic economic and econometric concepts: the economic relations (or rather observed deviations from these, the equilibrium errors) correspond to cointegration relations; an economic equilibrium corresponds to the long-run value in a CVAR model; the comparative statistics are given by the long-run impact matrix in the CVAR; the exogenous variables are the common trends in the CVAR. While exogeneity in an economic model has no exact statistical correspondence in the CVAR, it can be given an empirical interpretation in terms of weak and strong exogeneity. Also the adjustment parameters of the CVAR are interpretable in terms of expectation formation, market clearing, nominal rigidities. This article illustrates that it is possible to bridge the gulf between economic models and the CVAR and that it is not even very difficult. Giese (2008) finds strong evidence that two stochastic trends are driving the term structure of zero coupon bond rates of 1, 3, 18, 48, and 120 months maturities. Consistent with this she finds that the term spreads are nonstationary, but pairwise cointegrated. The economic interpretation is that shocks to the level and the slope of the yield curve are driving the interest rates, while the curvature of the yield curve is stationary. This is yet another illustration that stable relations can be found in a nonstationary world, but on a higher level. The finding of two stochastic forces, one originating from the long end of the term structure and the other from the shorter end, has strong implications for the effectiveness of monetary policy. The latter is usually based on the assumption of one stochastic trend originating from monetary policy shocks, which works their way through the term structure until they affects the very long rates. With two stochastic trends, this transmission mechanism is no longer straightforward.
We study the impact of different regulatory designs on the cost efficiency of operators providing a public service, exploiting data from the French transport industry. The distinctive feature of the study is that it considers regulatory regimes as endogenously determined choices, explained by economic, politi- cal, and institutional variables. Our approach leans on a positive analysis to study the determinants of regulatory contract choices, which, in turn, affect the costs of operating urban public transport. Our results show that given similar network characteristics, networks operated under fixed-price contracts exert lower costs than those regulated under cost-plus contracts. This find- ing is in line with the theoretical prediction of new regulatory economics that fixed-price contracts provide more incentives for efficiency. Importantly, ignoring the endogeneity of contractual choices would lead to significantly underestimating the impact of contract type on cost efficiency. Our find- ings provide useful policy implications suggesting that the move toward more high-powered incentive schemes is indeed associated with significant cost ef- ficiencies. Moreover, they highlights the importance of accounting for the endogeneity of regulatory contract choices.
the potential, for predictability can in particular be realised when the stratosphere is actively coupled with the troposphere, i.e. in the Northern Hemisphere winter and the Southern Hemisphere spring. The downward coupling is characterised by the annular mode
The shocks to the logistic curve are calibrated to achieve the desired reductions of 9 cpl for S1 and 18 cpl for S2. Relative to the February 2020 benchmark, this implies a targeted cumulative reduction of 0.57 per cent under S1 and 1.15 per cent under S2 in the final purchase price of fuel. The calibrated reduction in the required rate of return by refineries under S2 amounts to 0.018 per cent. That is, if the refineries were willing to supply capital at, for example, an RoR of 10 per cent under business-as-usual conditions, the shock now implies that they will be willing to supply the same required amount of capital at 9.982 per cent. This strategy allows refineries to be willing to satisfy higher future demand for their outputs of refined petroleum despite receiving 18 cpl less at a lower RoR on capital investment. The subsequent drop in the final purchase price of petrol, which will increase demand over time, will therefore not lead to an excess demand situation. The standard UPGEM does not explicitly account for the foreign ownership of capital, but instead assumes that all capital is owned by South Africans, with any investment requirements in excess of domestic savings financed through foreign debt. Subsequent interest payments on foreign debt are then modelled to affect the current account deficit. Whilst this mechanism is adequate to capture the basic macroeconomic implications of foreign capital ownership, debt, and subsequent interest payments, it not sufficiently nuanced to capture the benefit to South Africa’s GNP of cutting the pure profits of local refineries when there is a substantial foreign ownership share. Foreign ownership of petrol refineries in South Africa stands at roughly 50 per cent based on available information.
The authors explore the interdepend- ence between demographic changes and transport network centrality, using Saint Petersburg as an example. The article de- scribes the demographic data for the peri- od 2002—2015 and the transportation net- work data of 2006. The authors employ several methods of demographic research; they identified the centre of gravity of the population, produce the standard devia- tional ellipsis and use the kernel density estimation. The street network centrality of Saint Petersburg was analyzed using the Multiple Centrality Assessment Model (MCA) and the Urban Network Analysis Tool for ArcGIS. The analysis of the popu- lation distribution in Saint Petersburg shows that each area of the city has seen their population grow over the last thirteen years. However, the population of subur- ban areas increased the most. The core area of the city has the tendency of outward diffusion, and the population gravity centre has been moving northwards. Spatial char- acteristics of the population growth, changes in the population gravity centre, the standard deviational ellipse and char- acteristics of the street network centrality show that Saint Petersburg is at the final stage of urbanization and its development pattern is similar to that of other major cities.
handled by managers directly. This notion is supported by the observation that spa- tial dependence is not attenuated in municipalities with a politically stable electorate: If politicians mimic their neighbors´ policies in order to gain votes, they should be less inclined to do so in municipalities where small changes in electoral support does not matter for political power. Also, the covariates reecting the nancial situation of the municipalities only have a minor eect on pricing decisions. The view that utilities are largely independent entities is conrmed by Haraldsson (2013) in a recent government report about accounting standards of Swedish water utilities. He argues that Due to weak external control and a lack of interest from politicians, the quality of nancial accounting is largely dependent on the individual [utility] ocial´s knowledge and ambitions (p.6, freely translated from Swedish). While it is certainly possible to interpret politicians´ disinterest as a general aversion towards external auditing, the fact remains that since utilities are not nanced by tax revenues, politicians´ incen- tives for keeping track of the utilities´ budgets are reduced. Even if managers cannot be voted out of oce directly, their job will be at stake if they are considered to run the utility ineciently, or if consumers believe that utilities abuse their monopoly power. Consumers may exercise their power either by complaining to the local au- thorities directly, or to the Swedish Water Supply and Sewage Tribunal. Whether consumers are motivated by rational or behavioral reasons, a strategic response for managers is to set prices that conform to the prices of neighboring utilities.
• Transparency of Information: Transparency of information is relative easily secured for direct, in-house impacts. Indirect and systemic aspects are more based on case stud- ies, where the same limitations noted above apply. Reported data can to some extent be compared where the GRI reporting principles are followed. On a procedural level, the question of technical protocols for the GRI Guidelines is prominent. At present technical protocols are only available for some selected indicators while protocols for the whole set of indicators are still under development. Until the GRI Boundary Pro- tocol is fi nalised and applied, uncertainty in setting boundaries will persist. Technical Protocols for GRI sector supplements are completely missing although standardised accounting methods for greenhouse gases has been well developed, for instance under the GHG Protocol initiative. Despite the lack of standards, external evaluation is devel- oping, either through external verifi cation procedures or through systematic screening by stakeholders, e.g. by the SRI community (see box above) 25 .
2. ASSESSMENT OF INDIVIDUAL MEASURES
By assessing each measure individually for this study, this chapter primarily aspires to provide an overview of the most relevant considerations regarding each included measure. These considerations predominantly reflect views found in the academic literature. Available theoretical and empirical work will be considered. When appropriate, other sources such as industry reports, studies from consulting firms, as well as surveys – including the ZEW questionnaire for this study – will be included. However, the heterogeneity of the measures does not allow for a consistent approach. Costs and benefits of the measures included will be discussed. Considering the different dimensions of costs and benefits illustrated in Figure 1, the following assessments will concentrate on intended benefits (i.e. an increase in financial stability) as well as unintended 'costs' (i.e. a decrease in financial stability) of regulatory initiatives. Direct costs (i.e. costs incurred on banks) will be addressed if contained in the literature. In other words, whereas most assessments will be of a qualitative nature, some indications of quantitative impacts will be given when available. It should also be noted that for most discussed measures academic literature referring directly to the respective regulatory initiatives is not available. Impacts will therefore have to be inferred from available arguments and related empirical evidence if available.
paratively low as a result of different barriers, e.g. limited availability of low-cost electricity and sustainable biomass. If the decarbonisation efforts rather focus on full electrification, this also leads to lower demand for hydrogen and synthetic fuels (and gases) compared to a pathway concentrating on indirect electrification by synthetic energy carriers. Overall, based on a study by the Wuppertal Institut (2017), we esti- mate that between 20 and maximal 100 million tonnes of methanol could be import- ed into Germany by 2050. These numbers rest on the assumption that all feedstock as well as the remaining transport activity would be supplied by imported methanol. As Rotterdam oil and oil product shipment roughly equal the size of German external trade, we use these numbers as proxy for Rotterdam imports of synthetic fuels – as- suming that neighbouring regions such as BENELUX will follow similar decarbonisa- tion routes.
It is already said that excessive and imprudent risk taking in financial sector led to the collapse of a great number of financial institutions, which as a consequence of systemic risk trigger caused the financial crisis and recession in 2008. Although root causes for such a behaviour towards risk are numbered and of complex nature, there is general consensus of theregulatory bodies and supervisors of the financial system that the inadequate compensation systems played crucial role. Despite the fact that compensation systems did not have direct impact on the emergence of the crisis, their weaknesses determined to a great extent its scope and depth. Namely, compensation policies that nurture risk appetite over capacity for risk taking jeopardize effective risk management and foster so-called “aggressive” risk taking. In order to mitigate potentially damaging impact of badly created compensation systems on the risk appetite, the regulation in the EU implies establishment of the compensation policy and practice for key personnel in the organization (top management, risk takers in the organization, employees on the control functions, employees with high variable share in compensation and other employees who might influence the risks in the organization with their behaviour) which are consistent with the effective risk management practice (CRD III - Directive 2006/48/EC). The implementation of the previous requirement is facilitated with the emergence of numerous documents that take the form of guidelines for an adequate modelling of the compensation system in the financial sector.
followers. We explicitly test this logical extension from our first hypothesis in our empirical analysis.
While the idea that domestic environmental regulations should drive the transfer of ESTs across borders is far from novel, less widely entertained is the thesis that “foreign” environmental regulations in important trading partners may have a similar effect. Yet it is conceptually plausible. With the growth of international production networks and the spatial dispersion of supply chains across national borders, firms not only produce products for the domestic market, but also for export to foreign markets (Dicken 2010). What is more, export markets may have different environmental standards to those in the exporting country, possibly both more and less stringent. An important corollary is that ESTs may not only be transferred to comply with environmental standards in the domestic market, but also in order to be incorporated into products destined for export. To take one example: a parent company of a transnational automobile producer may transfer particular ESTs to a subsidiary in a lower-regulating country j so that its vehicles and components are capable of complying with environmental standards in its higher-regulating export market k. Entirely novel to the literature is our proposition that, as with regulatory distance between the foreign source country i and the recipient country j, what matters more than absolute stringency in foreign export markets k for transfers into country j is theregulatory distance between these export markets and the foreign source country i. This is because compliance technologies are developed to meet specific environmental regulatory standards and a likely source of these technologies will therefore be countries with similar standards to those in the recipient country’s export markets, resulting in inflows from these countries.
15 complexes, facilitating a variety of RNA-RNA and RNA-protein interactions (Wilusz and Wilusz, 2005). In prokaryotes, the binding of the homohexameric apo-Hfq, which seems to be a quiet heterogeneous process (Sobero and Valverde, 2012), can stabilise an sRNA and promote its interaction with an mRNA target and thereby subsequently alters the stability or translation (reviewed in Vogel and Luisi, 2011). The binding of sRNAs to Hfq was identified to occur to all four exposed regions of the protein: the proximal and the distal face, the rim and the C-terminal tail (reviewed in Sobrero and Valverde, 2012). After it had become evident that the interplay of Hfq with different sRNAs can mediate gene regulation, the physiological role of Hfq was the subject of various studies in several model organisms. In the majority of the described cases an hfq deletion led to pleiotropic phenotypes, including increased stress sensitivity (Berghoff et al., 2011; Geng et al., 2009) and reduced virulence (Sousa et al., 2010; Fantappie et al., 2009), arguing for a global role of Hfq in bacterial physiology. Recent findings support the idea that Hfq acts on multiple steps in the sRNA- mRNA interaction: changing the structure of RNAs, bringing RNAs in proximity, neutralising the negative charge of the pairing RNAs, stimulating the nucleation of the first base pairs, and facilitating the further annealing of the two RNA strands (reviewed in Updegrove et al., 2016). Despite all this knowledge on Hfq, for a long time, it remained elusive how Hfq “finds” distinct RNAs in the cell to act in the short timeframes known for stress responses involving sRNAs. Over the last three years, more and more data was generated trying to answer this question. Three distinct states of Hfq with different diffusion rates were found by single-molecule monitoring: free unbound Hfq (fastest diffusion), Hfq bound to RNA, and/or other proteins (intermediate diffusion) and Hfq bound to RNA during transcription in the transcription complex (slowest diffusion) (Persson et al., 2013). Moreover, modelling studies indicated that the maximum sRNA-dependent regulation occurs at a specific Hfq concentration, which varies for each RNA pair and can be affected by competition for Hfq with other sRNAs, mRNA levels, and so-called sponge RNAs (unspecific binding to Hfq by e.g. unprocessed tRNA fragments) (Sagawa et al., 2015). Taken together, Hfq represents an effective and flexible RNA- chaperone involved in manifold sRNA-dependent processes, with binding surfaces and mechanisms varying profoundly between different organisms.
AnAlyticAl frAmework for policy AnAlysis
certain MPIs (e.g. loan-to-value ratio caps, margin and haircut requirements) should be catered for in conjunction with the macro-prudential objectives from the supranational perspective. With respect to the macro-prudential propagation channels, while some attempts have already been made to model macro-prudential policy in both dynamic stochastic general equilibrium (DSGE) frameworks (see e.g. Kannan et al., 2009; Darracq Pariès et al., 2011; Angelini et al., 2011; Beau et al., 2012; Lambertini et al, 2012; Angeloni and Faia, 2013) and static general equilibrium frameworks (e.g. Goodhart et al., 2012), the importance of different propagation channels and their intertwining needs further exploration. 2 In addition, while some attempts have already been made to include more than one policy instrument in a general equilibrium framework (e.g. Goodhart et al., 2012; and Kawata et al., 2013), most research has so far concentrated on analysing the impact of a single macro-prudential instrument. This makes it challenging to assess the impact of a combination of the instruments in a general equilibrium set-up. Moreover, as macro-prudential policymaking is largely uncharted territory and its theoretical underpinnings are relatively less explored than, say, monetary policy theory, it is prudent to apply a range of tools/models when carrying out impact assessments. A complementary tool to existing general equilibrium models mentioned above is the top-down stress-testing framework, which could provide valuable information about the relative impact of various MPIs, or a combination of those, on individual banks’ capital shortages. While the stress testing framework cannot provide a comprehensive picture of how propagation channels function, such a partial equilibrium set-up can provide a useful input to the overall assessment and calibration of MPIs. Exploring the framework’s granular information about banks’ balance sheet structure can provide an immediate quantitative assessment of the direct (or ‘first order’) impact of a given MPI on banks in the cross section. The outcome of such an exercise could subsequently be used as an input to other macro models in order to quantify possible risks arising from macro-feedback effects or contagion. The framework could hence contribute, for instance, to the calibration of the optimal level of countercyclical capital buffers on a country, euro area, or EU level.
• Relevance of Information: Companies extended scope and boundaries over time, with direct aspects getting supplemented by indirect ones and reporting efforts covering increasing parts of the value chain. This has led to an improved relevance of infor- mation. Regarding systemic effects, however, most reports struggle with displaying a balanced approach that quantifi es ICT impacts and benefi ts in production and con- sumption integrating different sustainability dimensions and going beyond a case study level. Reports by single companies cannot evaluate issues where the combined impact of companies is relevant. While individual companies can report on their efforts towards resolving these problems, the effectiveness of measures undertaken can only be evaluated from a wider point of view. Looking at procedures to secure the relevance of information, companies in the ICT sector do undertake stakeholder dialogues to identify information demands, both when preparing a report and when collecting feedback. A number of companies apply the 2002 GRI Guidelines, commit- ting themselves to a standardised set of indicators legitimised by a broad stakeholder basis. In the telecommunications sector, some companies have even started to work on the implementation of the GRI telecommunication supplement.