The German Institute for Economic Research is one of the leading economic research institutes in Germany. It is an independent, non-profit academic institution which is involved in basic research and policy advice. DIW Berlin was originally founded in 1925 as Institute for Business Cycle Research and was later renamed to its current name.DIW Berlin presents its research results in science journals, within the scope of national and international scientific events as well as at workshops, symposia and colloquia. The research results provide a basis for the exchange of ideas among experts and other relevant groups. Current economic and structural data, forecasts and advices as well as services in the area of quantitative economics are provided to decision makers in economics and policy and the broad public. DIW Berlin endues a target group specific range of publications, events and data sources. Furthermore, the research results meet with major response in media. Wikipedia.
Schill W.-P.,German Institute for Economic Research
Energy Policy | Year: 2011
We use a game-theoretic model to analyze the impacts of a hypothetical fleet of plug-in electric vehicles on the imperfectly competitive German electricity market. Electric vehicles bring both additional demand and additional storage capacity to the market. We determine the effects on prices, welfare, and electricity generation for various cases with different players in charge of vehicle operations. Vehicle loading increases generator profits, but decreases consumer surplus in the power market. If excess vehicle batteries can be used for storage, welfare results are reversed: generating firms suffer from the price-smoothing effect of additional storage, whereas power consumers benefit despite increasing overall demand. Strategic players tend to under-utilize the storage capacity of the vehicle fleet, which may have negative welfare implications. In contrast, we find a market power-mitigating effect of electric vehicle recharging on oligopolistic generators. Overall, electric vehicles are unlikely to be a relevant source of market power in Germany in the foreseeable future. © 2011 Elsevier Ltd.
Schroeder A.,German Institute for Economic Research
Applied Energy | Year: 2011
Storage devices and demand control may constitute beneficial tools to optimize electricity generation with a large share of intermittent resources through inter-temporal substitution of load. This paper quantifies the related cost reductions in a simulation model of a simplified stylized medium-voltage grid (10. kV) under uncertain demand and wind output. Benders Decomposition Method is applied to create a two-stage stochastic optimization program. The model informs an optimal investment sizing decision as regards specific 'smart' applications such as storage facilities and meters enabling load control. Model results indicate that central storage facilities are a more promising option for generation cost reductions as compared to demand management. Grid extensions are not appropriate in any of the scenarios. A sensitivity analysis is applied with respect to the market penetration of uncoordinated Plug-In Electric Vehicles which are found to strongly encourage investment into load control equipment for 'smart' charging and slightly improve the case for central storage devices. © 2011 Elsevier Ltd.
Schill W.-P.,German Institute for Economic Research
Energy Policy | Year: 2014
I examine the effects of increasing amounts of fluctuating renewable energy on residual load, which is defined as the difference between actual power demand and the feed-in of non-dispatchable and inflexible generators. I draw on policy-relevant scenarios for Germany and make use of extensive sensitivity analyses. Whereas yearly renewable surplus energy is low in most scenarios analyzed, peak surplus power can become very high. Decreasing thermal must-run requirements and increasing biomass flexibility substantially reduce surpluses. I use an optimization model to determine the storage capacities required for taking up renewable surpluses. Allowing curtailment of 1% of the yearly feed-in of non-dispatchable renewables would render storage investments largely obsolete until 2032 under the assumption of a flexible power system. Further restrictions of curtailment as well as lower system flexibility strongly increase storage requirements. By 2050, at least 10. GW of storage are required for surplus integration, of which a sizeable share is seasonal storage. Results suggest that policy makers should work toward avoiding surplus generation, in particular by decreasing the must-run of thermal generators. Concerns about surpluses should not be regarded as an obstacle to further renewable expansion. The findings are also relevant for other countries that shift toward fluctuating renewables. © 2014 Elsevier Ltd.
Grau T.,German Institute for Economic Research
Energy Economics | Year: 2014
This paper reviews the adjustments of the feed-in tariffs for new solar photovoltaic (PV) installations in Germany. As PV system prices declined rapidly since 2009, the German government implemented automatic mechanisms to adjust the remuneration level for new installations in response to deployment volumes. This paper develops an analytic model to simulate weekly installations of PV systems of up to 30. kW based on project profitability and project duration. The model accurately replicates observed market developments and is used to assess different adjustment mechanisms against multiple scenarios for PV system price developments. The analysis shows that responsive feed-in tariff schemes with frequent tariff adjustments and short qualifying periods reach deployment targets most effectively. © 2014 Elsevier B.V.
Marcus J.,German Institute for Economic Research
Journal of Health Economics | Year: 2013
Studies on health effects of unemployment usually neglect spillover effects on spouses. This study specifically investigates the effect of an individual's unemployment on the mental health of their spouse. In order to allow for causal interpretation of the estimates, it focuses on plant closure as entry into unemployment, and combines difference-in-difference and matching based on entropy balancing to provide robustness against observable and time-invariant unobservable heterogeneity. Using German Socio-Economic Panel Study data the paper reveals that unemployment decreases the mental health of spouses almost as much as for the directly affected individuals. The findings highlight that previous studies underestimate the public health costs of unemployment as they do not account for the potential consequences for spouses. © 2013 Elsevier B.V.
Braun F.G.,German Institute for Economic Research
Energy Policy | Year: 2010
Considering the increasing attention on efficient use of energy, it becomes vitally important to understand the energy-related behavior of households. This article presents empirical evidence on the determinants of the space heating technology applied by a household. Three sets of variables are examined as potential influences-building, socio-economic, and regional characteristics. To highlight both the differences and similarities, the results are obtained from a sample of house owners, and from a sample including all households. The influence of socio-economic factors is similar across these groups. Income is found to exert only a minor impact on the system choice. Dwelling features are significant in determining the heating type, particularly in the sample including all households. Regional effects are important-clear differences prevail between East and West Germany. © 2010 Elsevier Ltd. All rights reserved.
Weber T.A.,Stanford University |
Neuhoff K.,German Institute for Economic Research
Journal of Environmental Economics and Management | Year: 2010
This paper examines the effects of firm-level innovation in carbon-abatement technologies on optimal cap-and-trade schemes with and without price controls. We characterize optimal cap-and-trade regulation with a price cap and a price floor, and compare it to the special cases of pure taxation and a simple emissions cap. Innovation shifts the tradeoff between price- and quantity-based instruments towards quantity-based emissions trading schemes. More specifically, an increase in innovation effectiveness lowers the optimal emissions cap, and leads to relaxed price controls unless the slope of the marginal environmental damage curve is small. Because of the decrease in the emissions cap, innovation in abatement technologies can lead to a higher expected carbon price, so as to provide sufficient incentives for private R&D investments. The expected carbon price decreases once innovative technologies are widely used. © 2010 Elsevier Inc.
Lohmann H.,German Institute for Economic Research
Journal of European Social Policy | Year: 2011
The Statistics on Income and Living Conditions (EU-SILC) provide an up-to-date data source for the comparative analysis of income, material deprivation and poverty. At the European Union (EU) level, these data have become a standard source for social reporting. Yet the specific approaches to data collection in EU-SILC vary widely from one country to the next. One of the major differences is that some countries rely entirely on household surveys, while others also use administrative or 'register' data for a wide range of variables. This article addresses the question of how the relationship among employment, earnings and poverty changes when different approaches to data collection are used. The article shows the impact on substantial results: here, on the percentages of working and non-working poor. Since crucial questions of EU social policy rest on these data, it is an important finding that some results are most likely driven by different approaches to data collection. © The Author(s), 2011.
Schroder M.,German Institute for Economic Research
Advances in Life Course Research | Year: 2013
In the light of the current economic crises which in many countries lead to business closures and mass lay-offs, the consequences of job loss are important on various dimensions. They have to be investigated not only in consideration of a few years, but with a long-term perspective as well, because early life course events may prove important for later life outcomes. This paper uses data from SHARELIFE to shed light on the long-term consequences of involuntary job loss on health. The paper distinguishes between two different reasons for involuntary job loss: plant closures, which in the literature are considered to be exogenous to the individual, and lay-offs, where the causal direction of health and unemployment is ambiguous. These groups are separately compared to those who never experienced a job loss. The paper uses eleven different measures of health to assess long-term health consequences of job loss, which has to have occurred at least 25 years before the current interview. As panel data cannot be employed, a large body of variables, including childhood health and socio-economic conditions, is used to control for the initial conditions. The findings suggest that individuals with an exogenous job loss suffer in the long run: men are significantly more likely to be depressed and they have more trouble knowing the current date. Women report poorer general health and more chronic conditions and are also affected in their physical health: they are more likely to be obese or overweight, and to have any limitations in their (instrumental) activities of daily living. In the comparison group of laid-off individuals, controlling for the initial conditions reduces the effects of job loss on health - proving that controlling for childhood conditions is important. © 2012 Elsevier Ltd.
News Article | September 6, 2016
On a recent article about California’s carbon reduction progress, Kurt Lowder dropped the comment, “I am surprised that I have not read much about how California will benefit economically for switching to EVs.” Although I’m fond of using the following chart when writing or presenting about the benefits of electric vehicles, this comment made me realize that we’ve never written a deep dive (or even a shallow dive) on the economic benefits of EVs. So, here we are — below is an initial look at how electric transport could considerably boost certain economies — especially Europe and the USA. If anyone wants to take the idea further with California, Florida, the UK, Australia, or other locations, I’d love to see the results. Notably, if certain economies are benefiting from a switch to electrification (away from oil-based fuels), that means others are losing out. Oil-rich countries and billionaire oil barons are the most obvious parties that will have a tough time adjusting, but there will also be ramifications in many other sectors of society, as oil company investors lose cash, oil industry workers lose their jobs, etc. That said, it seems extremely likely that the net effect will be broader distribution of wealth — which I count as a good thing. Starting with Europe, since that’s the focus of the chart above, you can see that at one point Europe was exporting approximately €1 billion of cash each day in return for oil. With oil prices falling, among other things, the daily price tag has apparently dropped to ~€525 million a day for the European Union (including the UK). That’s still nothing to scoff at. That comes to ~€200 billion per year. It’s approximately 1–1.5% of European Union GDP. EU consumers wouldn’t simply save €525 million of cash each day if they switched over to electric transport — they will have to pay for the electricity to power their electric cars, buses, scooters, bikes, etc. However, the thing about electricity is that it’s generated locally or regionally — it can even be generated on the roof of your home (via solar panels, of course). So, rather than sending €525 million each day to Saudi Arabia, Russia, Nigeria, the UAE, Canada, Iraq, Angola, Libya, etc., consumers would theoretically send cash to national or regional utilities, regional power plant owners, community solar and wind farms, or just their kids’ savings accounts. The total wouldn’t come to €525 million, though, since electric drivetrains are approximately 3–4 times more efficient than gasoline engines. Of course, it’s hard to have a strong clue as to how transport patterns will change, which electric cars will dominate, how much electricity will cost, etc., but we can be pretty certain we will be saving money on transport once we switch 100% to electrification. Michael Liebreich and Angus McCrone noted in a recent article that 7% of tax revenue comes from gasoline (petrol) and diesel taxes in Europe. Naturally, governments will need to find ways to get tax revenue from other sources to replace that revenue, but this matter is just about taxpayer money going to the government to go back to taxpayers via various services and infrastructure, so it’s not about net societal gains/losses from electrification. Of course, Europe also exports oil. The thought experiment above assumes that Europe leads the way in adoption of electric vehicles and is still able to export oil. As the whole world switches to electric transport and Europe’s exports lose out in the global oil market, you have to subtract the lost export revenue from the €525 million a day noted above. However, if Europe moves to EVs more quickly than others, it could theoretically export more oil than it is exporting now, which would boost revenue for a while, pushing the net benefit above €525 million a day. Either way, as it stands right now, Europe imports a lot more oil than it exports, so a global shift to electrification in which Europe was average would be a net benefit for the region. Beyond cutting €525 million a day in imports, there are many more economic benefits that I will discuss further down the article, after introducing the US situation. Don’t assume that’s the end of the story! In the USA, we import ~9,401,000 barrels of oil a day (compared to ~629,000 barrels a day in exports). Those 9.4 million barrels a day come to an import tab of approximately $425 million/day. That’s approximately $155 billion a year. In other words, we are in a similar boat as the EU. The countries we’re importing the most oil from (based on 2015 oil imports) are Canada, Saudi Arabia, Venezuela, Mexico, Colombia, Russia, Ecuador, Iraq, Brazil, and Kuwait. Much of that money isn’t going to make it back into the US economy in any way, shape, or form. $155 billion a year comes to nearly 1% of US GDP. That’s approximately 5 times more than Obama’s US Department of Energy FY2016 budget — $30 billion. It’s approximately 19 times more than the US EPA’s 2015 budget — $8.1 billion. Of course, the EPA’s budget could also be reduced substantially thanks to much less pollution from transportation, and that leads me into the final section. Oil imports are only one chapter of the story. The fact is, we spend or lose an insane amount of money, time, productivity, and quality of life from burning oil-based fuels. All of this strikes into our economy and extracts money or comfort, pleasure, and time that we can try to quantify. Here are some points related to that: Image by Skeptical Science. Data sources: German Institute for Economic Research and Watkiss et al. 2005 The health costs, the climate catastrophe costs, and the national security costs can all be cut by switching to electric transport (and cut further by switching to clean electricity production), and that could provide a great economic boon to the USA, Europe, and basically every country in the world. The amount of money we spend importing oil is alone enough to compel a societal shift to electric transport, but the economic benefits related to health, climate stability, and national security make electrification of transport one of the most obvious solutions we should be pursuing at the quickest pace possible. Drive an electric car? Complete one of our short surveys for our next electric car report. 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