This December France will play host to crowds of diplomats as the United Nations holds make-or-break talks on climate change. The challenge for delegates in Paris is to achieve a binding agreement that will limit the increase in the world’s temperature to no more than 2°C. It is an incredibly difficult task. But economics can shed light on which strategies have the best chance at success. 

The French transmission system operator, RTE, has recently started implementation of an electric power capacity mechanism, to be operational on 1 January 2017,which aims at ensuring France’s generation adequacy, i.e., ensuring that installed generation capacity will exceed demand under almost every circumstance. Other European countries are implementing or considering implementation of capacity mechanisms.  This post describes the genesis of these mechanisms, then examines their pros and cons.

The recent visit of President Hollande to French West Indies is an opportunity to discuss one of the components of France’s Contribution to the Public Electricity Service, namely the compensation for higher cost of production in zones that are not connected to the continental French power grid (Corsica, overseas departments, Saint Martin, Saint Barthélemy, Saint Pierre and Miquelon, the Brittany Islands of Molène, Ouessant, and Sein, the Glénan archipelago and the Chausey Channel Islands).

Mating strategies to suicide bombing: which is the better sex and which more likely to want to know?

There is a birth defect that is surprisingly common, due to a change in a key pair of chromosomes”, writes Melv

In this post we will defend the idea that the drop in oil prices is not due to an increase in supply, but rather to 9 years of stagflation resulting in a decrease in the market. The drop in oil prices signifies that we have entered the contraction phase of oil production: a paradigm change.

In France, while the Energy Transition for Green Growth legislation remains in draft form due to disagreements between the Senate and the National Assembly, the Senate is debating draft legislation on promoting Growth, Activity and Equal Economic Opportunities (known as the Loi Macron), which the government passed through the Assembly using Constitutional Article 49-3. In the course of this debate seventeen senators have tabled an amendment to regulate the access of big industrial consumers of energy to megawatt hours generated by renewable energy sources. To not use the Energy Transition bill as the vehicle for this initiative is part of a parliamentary strategy, an analysis of which does not fall within the remit of the authors of this blog. However, because yet again the issue of distorting market mechanisms has been raised, economic discussion is warranted.

The European Commission has just published its strategy to strengthen the European Energy Union. Many issues are addressed, in particular proposals to further the integration of European electricity markets. While the objective is obviously very important for Europe’s citizens, the proposed approach, which relies on numerical goals for construction of new electricity transmission infrastructure between Member States, is difficult to implement. This paper advocates a different approach: the focus should be instead on increasing the coordination of the operations of the existing grids.

 

Embroiled with the Greek crisis, European policymakers will soon have to step back and reflect on the broader question of the future of the Eurozone. Before calling for an exit or, on the contrary, for further integration, it is worth pondering over the consequences of each option.

Oversimplifying, one could say that there are two strategies for managing the Eurozone: the current one which builds on the 1992 Maastricht treaty and its Fiscal Compact update in 2012; and a more ambitious federalist alternative. Federalism would be my preferred arrangement, but I am not convinced Europeans are ready to do what it takes to make it work.

In its simplest form, price discrimination is selling the same product at different prices according to the buyers, volumes, locations, dates, payment methods, and so forth. This commercial practice has very bad press, as well as being prohibited under competition law. And yet, it also has qualities of efficiency and fairness that merit consideration. To understand the difference of opinion between economists and lawyers on the subject, let’s take a closer look at the example of the British retail energy market.

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