Transcript Renewable Energy, Technology Transfer and International Trade

DIW BERLIN
International Trade with Solar
Energy Technology Components
Evidence on the Structure and Determinants?
34th IAEE International Conference
Wednesday June 22nd 2011
Session 63
Felix Groba
German Institute of Economic Research Berlin
Department of Energy, Transport and Environment
Supported by Heinrich Böll Foundation
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Motivation & Research Hypotheses (1)
Figure 1. Development of Solar energy technology component exports by country group 1996-2008 and market structure 2008
2.8 bn. $
24.7 bn. $
1.4 bn. $
12.5 bn. $
2.3 bn. $
1.9 bn. $
1.8 bn. $
.9 b
1.1 bn.$ 2
n. $
b
3.2
n. $
1.5bn.$
3.1 bn. $
Source: own calculations, Data retrieved from UN COMTRADE, WITS DATABASE
• Trade not respected in description and analysis global market development.
• Significant trade increase since 2001 (+600% since 1996).
• OECD (EU) countries dominant exporting and importing markets.
 Increasing importance of China and India.
 Dominant trade directions North-North and South-North.
 North-South and South-South trade remains limited.
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Motivation & Research Hypotheses (2)
What determines trade with solar energy technology components ? Is there
evidence on the Porter hypothesis?
H1: Stringent environmental regulation and renewable energy policy
frameworks explain high exports of solar energy technologies.
What role do regulation and trade barriers in importing countries play in
determining solar energy technology exports?
H2: A regulatory environment supportive of renewable energies
increases imports of solar energy technology goods.
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Table of Content
I.
Literature on Environmental Regulation and Trade
II.
Empirical Model and Estimation Method
III.
Data and Descriptive Statistics
IV.
Estimation Results
V.
Conclusion
Backup
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Literatur on Environmental Regulation and Trade
Porter Hypothesis [Porter, van der Linde (1995)]
• Regulation triggers technological innovations and increases competitiveness
(strong version).
• Ambiguous empirical results: Antweiler, Copeland [2001]; Harris [2002]; Jug,
Mirza [2005].
Weak Porter Hypothesis [Jaffe et. al (1995)]
• Environmental regulation stimulates innovation (no focus on competitiveness
impact).
• Positive empiricial results: Popp [2006]; Devries, Withagen [2005].
• Sectoral analysis.
Research gap:
• Detailed analysis of trade with renewable (solar) technology components.
• Analysis of policy environment in importing countries.
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Table of Content
I.
Literature on Environmental Regulation and Trade
II.
Empirical Model and Estimation Method
III.
Data and Descriptive Statistics
IV.
Estimation Results
V.
Conclusion
Backup
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Empirical Model and Estimation Method (1)
(1) X  ß0
ijt
Yitß1Y jtß2
ß3
ij
D
ijt
Xijt = trade flow
Yijt = economic mass j
ß = coefficients
Dij = distance
(2) ln X  ln ß0  ß1 ln Yit  ß2 ln Yjt  ß3 ln Rit  ß4 ln Iit  ß5 ln R jt  di  d j  dt  ln ijt
ijt
FEGLS: •
•
Inconsistent under error heterogeneity.
Inconsistent under persistent zero trade flows.
(3) X  ln ß0  ß1 ln Yit  ß2 ln Yjt  ß3 ln Rit  ß4 ln Iit  ß5 ln R jt  di  d j  dt  lnijt
ijt
Poisson Pseudo Maximum Likelihood:
•
•
•
•
Provides consistent estimators (Santos Silva and Tenreyro 2006).
Respects zero trade flow.
Successfully implemented (e.g. McGee 2008, Siliverstovs 2009).
fixed effects on exporter and importer countries (di, dj) to account for
multilateral trade resistance.
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Empirical Specification
• Balanced panel of bilateral export flows from 1999-2007.
Estimated Model:
SolarEXPijt   0  1 ln(GDPit )   2 ln(GDPjt )  3 ln( POPit )   4 ln( POPjt )  5 ln(distanceij )   6languageij
  7 IndexEnvregit  8 ln( SolarElectShareit )  9 ln( RDsolarPOPit )  1013 REPolicy
 14 Import _ Tariff jit  15 IndexEnvreg jt  16 ln( REElectShareit )
 di  d j  dt  ln  ijt
•
•
•
•
•
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Solar technology exports (21 OECD countries  129 importing countries).
General trade controls.
Proxies of environmental regulation and renewable energy supportiveness.
Importing country policy proxies.
Fixed effect dummies and error component.
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Table of Content
I.
Literature on Environmental Regulation and Trade
II.
Empirical Model and Estimation Method
III.
Data and Descriptive Statistics
IV.
Estimation Results
V.
Conclusion
Backup
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Data and Descriptive Statistics
H1: Stringent environmental regulation and renewable energy policy
frameworks explain high exports of solar energy technologies.
Output oriented measures:
Figure 2: Share of solar electricity generation from total electricity
generation for selected OECD countries 1996 - 2007
Broad Environmental Regulation Index
•Based on energy intensity and change in energy
intensity.
•van Beers & van den Bergh (1997)
Solar electricity share (+)
•Proxy of demand and policy stringency.
Input oriented measures:
Figure 3: Public R&D expenditure for solar energy in US $ per capita
for selected OECD countries 1996 -2007
Per capita public R&D budget solar energy (+)
•Policy stringency variable (Johnstone 2010).
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Policy of renewable energy policies
•Incentive tariffs, quotas, tax measures,
voluntary agreements, tradable certificates.
•Dummy for introduction.
•Duration of policy.
Sources: IEA(2010), EIA (2011)
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Data and Descriptive Statistics
H2: A regulatory environment supportive of renewable energies
increases imports of solar energy technology goods
Output oriented measures:
Figure 9: Global non-hydro renewable net electricity generation as
share of total electricity generation 1996 - 2008
Broad Environmental Regulation Index (+)
Non-hydro renewable electricity share (+)
• Proxy of demand and policy supportiveness.
Other Variables:
Effectivly applied tariffs on imports (-)
• Proxy of trade costs.
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Figure 10: Development of OECD solar energy exports and
respective mean tariff applied by importing countries.
Sources: UNCTAD TRAINS (2010), EIA (2011)
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Estimation Results
General trade
parameter
(except GDP)
Renewable
energy support
H1
Policy
Framework
H2
(
)
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Findings & Conclusion
• Highly dynamic market dominated by few counties.
• Strict environmental regulation has not impact on export performance.
• BUT: Countries with a strong renewable energy policies framwork export
more solar energy technology components.
• AND: countries that have introduced RE support policies early are
exporting more.
 Evidence on the Porter Hypothesis!
• Policy framework and market size in importing countries decisive to
determine export markets.
• Stong environmental regulation decreases imports (general measure).
• BUT: Strong demand for renewable energies increases imports.
 Market size matters and Policy does matter!
• Trade cost do not matter (depending on fixed effects).
Open Questions:
• Respecting dynamics.
• Identifying the role of innovation.
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Thank You!
Questions?
Comments & Suggestions!
Contact:
Felix Groba
DIW Berlin Mail:
Mail: [email protected]
Tel: +49 30 89189681
……..Backup
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Questions to deal with
(1) Fixed effects problematic
(2) Dependent Variable (what to estimate)
X ijt  ln ß0  ß1 ln Yit  ß2 ln Y jt  ß3 ln Rit  ß3 ln R jt  dij  dt  ln ijt
X ijt  X jit  ln ß0  ß1 ln Yit  ß2 ln Yjt  ß3 ln Rit  ß3 ln R jt  dij  dt  lnijt
(3) Zero inflation of dependent variable
•
•
zero trade flows present especially in the early years of the analysis (27.8%)
How to implement in STATA
(zip depvar [indepvars] [if] [in], ...)
–
–
FE? and panel structure or cross section?
Necessary?
(4) Including other Policy control variables (Graph next slide)
•
Policies introduced to foster RE expansion on national level
–
–
•
BUT: may have and impact on trade performance
Question: do I need to control for it or is it included in other controls already?
If yes:
–
Not the existence of the policy but the duration since implementation might is
of interest
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Backup 1 - Data basis global market analysis
• Databasis:
– UN COMTRADE Databank. 6-digit 1996 HS Codes
– Literature Review identifying PV, Solar Termal, Wind Technology
Components
• Problems: Dual use, data inflation
• BUT: Best Proxy for cross time and cross country analysis
HS Code
Solar Thermal
8419.11
8419.19
8402.19 (ex)
8419.50 (ex)
Table 1: Nomenclature of selected renewable energy technologies, HS 1996
Explaination
Instatantaneous gas water heaters
Other instantaneous or storage water heaters, non-electric
Steam or other vapour generating boilers - Other vapour generating boilers, including hybrid boilers
Heat exchange units [Heat-exchange units for solar-thermal or geothermal applications.]
9002.90 Concentrator systems to intensify solar power in solar energy systems, other optical elements
Solar Photovoltaik
8504.40 (ex) Static converters [Inverters for converting DC to AC power] - change solar energy into electricity
8507.20 (ex) Other lead-acid accumulators [solar batteries], i.e batteries for energy storage in off-grid photovoltaic
8541.40 (ex) Photosensitive semiconductor devices, incl. photovoltaic cells whether or not assembled in modules or made
up into panels; light emitting diodes
Wind Energy
7308.20 Wind Turbine Towers
8412.80(ex) Other Steam engines, windmill, without pumps
8412.90(ex) Parts for Steam engines and windmills
8413.81 Pumps for liquids, whether or not fitted with a measuring device, other pumps
8502.31 Generating sets, electric, wind-powered
8502.39 (ex) Other generating sets
8502.40 Electric generating set and rotary converters - combining electric generator and either hydraulic turbine or
sterling engine
Source: OECD/Eurostat [1999], Steenblik [2005a], Steenblick [2005b], Steenblick [2006], UNCTAD [2005], IPCC [2007]
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I. Motivation
II. Market Analysis
III. Panel
i. Literatur
ii. Variables
iii. Method
iii. Results
Global Market Analysis – Country Specifics
(1)
 X ij /  X ij

i
RXA ij  100 ln 
  X ij /  X ij
ij
 j
China
Germany
Japan
United States
Italy
France
Korea, Rep.
United Kingdom
Sum:
Sum OECD





Country Share of Global Export*
1997
2003
2008
6.4%
13.6%
28.5%
14.1%
13.2%
16.4%
15.1%
17.5%
9.9%
15.2%
9.2%
6.3%
4.7%
3.8%
3.2%
5.7%
4.2%
3.0%
2.3%
2.2%
2.9%
6.4%
4.5%
2.8%
69.9%
68.2%
73.0%
83.6%
73.2%
61.0%
 X ij /  X ij
i
(2) RCAij  100ln 
 M ij /  M ij
i

Export Specialization* (1)
1997
2003
2008
45
69
97
21
12
39
47
87
52
5
-10
-34
-12
-21
-25
-10
-29
-39
-29
-30
-11
3
-7
-21
X = Exports
M = Imports
i = Product Group
j = Country Index





Comparative Advantage*(1)
1997
2003
2008
70
23
83
17
-9
-9
42
50
82
-38
-13
-13
14
13
-22
0
12
5
-31
-90
-43
-1
36
44
RXA > 0: export specialization, market share of global technology export larger than average
RCA > 0: RCA = RXA-RMA comparative Advantage, non-additive and without weighing for the size of product groups
* only for solar PV and solar thermal energy technology (1) Compared to Industrial goods WTO definition
Results:
• Germany is specialized in exporting but does not enjoy a comparative
advantage because off high sector imports
• China and India are increasing their market shares and also gain on
specialization and competitive advantage
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Empirical Model and Estimation Method (2)
Potential effects:
- Country specific time invariant
- Country pair specific time invariant
- country specific time variant
- country specific time variant
Country pair fixed effects
X ijt  ln ß0  ß1 ln Yit  ß2 ln Yjt  ß3 ln Dij  di j  dt  lnijt
• explaining bilateral trade
• controlling for the resistance to trade of a specific country pair
Exporter and importer country fixed effects
X ijt  ln ß0  ß1 ln Yit  ß2 ln Yjt  ß3 ln Dij  di  d j  dt  lnijt
• explaining exports of i independent of specific trade partners
• controlling for the resistance to trade of i and j separately
• De facto: Random effects model
• Computing power problematic
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Data and Descriptive Statistics
H1b: Countries that are more innovative on renewable energies export
more solar energy technologies
• Innovations are relevant for trade [Krugman
1979]
• Patents as indicator of innovation output
• Very dynamic innovative activity in
renewable energies
Figure 5: Innovative activity in total patent applications and
renewable energy patent application in OECD countries
1980 – 2007 (1996 = 100)
Country share in total OECD patent
applications (+)
ShareTotPat it 
total patentsit
Figure 7: Country share in RE OECD patent applications 1990 - 2007
 total patents
it
i
Country share in total OECD renewable energy
patent applications (+)
ShareREPat it 
renewable energy patentsit
 renewable energy patents
it
i
Problem:
• Data not solar energy technology specific
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Sources: OECD(2010)
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Backup 2 - Introduction of renewable energy policies
Figure 4: Introduction of Renewable Energy Policies by country 1978 - 2010
CH
Incentive Tariffs
ES DK
US
PT
UK
AT BE
IT
FR SE
DE
FR
Investment Incentives
DK
DE
IT
US
KR
GR IE
FI
AT
GR
BE
NL
CH
CH
CA
JP
SE
IE
Tax Measures
GR
FR
FI
BE
KR
NL
AU
AT
NL
AT
DK
SE
NL
CH
1980
1985
1990
DE
FR GR
IE
JP
NO
SE
UK
ES
KR IT
Tradable Certificates
Voluntary Programmes
UK
CA
FI
IT
ES
NO
PT
BE
US
CA NL
AU
DK
Obligations
KR
NO
US PT
1995
ES
DE
NO
PT
UK
BE
AT JP
KR
AU
DK
NO
FI SE
UK
IT
DE AU CA IT
JP
2000
2005
2010
Note: AT=Austria, AU=Australia, BE=Belgium, CA=Canada, CH=Switzerland,
DE=Germany, DK=Denmark, ES=Spain, FI=Finland, FR=France, UK=United Kingdom,
GR=Greece, IE=Ireland, IT=Italy, JP=Japan, KR=Republic of Korea, NL=Netherlands,
NO=Norway, PT=Portugal, SE=Sweden, US=United States, Source: IEA (2004), authors
extension
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