Friday, September 23, 2011

First journal submission

In other news...

I finally submitted my (co-authored) paper to a journal yesterday.

Electricity Prices, River Temperatures and Cooling Water Scarcity

Thermal-based power stations rely on water for cooling purposes. These water sources may be subject to incidents of scarcity, environmental regulations and competing economic concerns. This paper analyses the impacts of water scarcity and increased river temperatures on German electricity prices from 2002 to 2009. Having controlled for demand effects, the results indicate that the electricity price is significantly impacted by both a change in river temperatures and the relative abundance of river water. An implication is that future climate change will affect electricity prices not only through changes in demand, but also via increased water temperatures and scarcity.

All told, I'm pretty happy with it. We'll see what the reviewers think, though... As I understand it, these things take their time and I'm only expecting hear back at the start of next year. Still, a big relief to get it out the door.


  1. Congratulations! Where'd you send it to?

    That's an interesting observation.

    Two questions:

    1. I imagine scarcity is a much bigger problem than temperature - would that be correct, or no?

    2. Could scarcity actually be less of a problem with climate change? Aren't we expected to get more precipitation?

  2. Thanks, bud.

    Submitted it to Land Economics. It's a pretty respectable journal, certainly as far as environmental/resource econ goes... I also think that it has the right kind of empirical emphasis i.t.o our paper. (Though I think we've got a nice theoretical model in there as well.)

    Both good questions:

    1) Yes and no. What I suppose you could call "relative" scarcity is a more common issue, although the effect is typically continuous... As opposed to the temperature effect, which kicks in suddenly once the environmental threshold is breached. Plants can suffer big (unexpected) losses in this context. E.g. here and here. (A complicating factor is that water is not always effectively priced, so scarcity regulation may also have a dramatic impact when rivers fall to very low levels.)

    2) It's hard to make a general statement -- indeed, this is part of what I'm proposing to look at for my PhD research -- but for certain regions I'd say "most definitely". However, other regions are going to be much worse off. You can see this figure from Solomon et al. (2009) for a broad strokes indication of how precipitation patterns will change globally. On the balance, most regions appear to lose. (Again there are complicating issues such as regularity of precipitation, extreme weather, etc.) Of course, a number of people are starting to emphasise temperature, since increased incidents of "thermal pollution" is likely to prove the binding constraint.


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