1 / 9

European gas regulation: A change of focus

European gas regulation: A change of focus. Aldo Spanjer Economics Department November 10th, 2006. Outline. Drivers of paradigm changes in gas markets. Common policy recommendations based on the new energy paradigm. Regulation theory on hold-up and policy credibility. A change of focus.

balmanzar
Download Presentation

European gas regulation: A change of focus

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. European gas regulation: A change of focus Aldo Spanjer Economics Department November 10th, 2006

  2. Outline • Drivers of paradigm changes in gas markets. • Common policy recommendations based on the new energy paradigm. • Regulation theory on hold-up and policy credibility. • A change of focus.

  3. Drivers of paradigm changes • Up to 1970s: Neoclassical focus, immature market, geopolitical anxieties after oil crises. • 1980s-1990s: Liberalism, mature market, excess supply. • From 2000 on: Investment needs, seller’s market. Is current regulation still up to its task of securing the public service obligations?

  4. Common policy recommendations:Economics of Institutions; New Institutional Economics

  5. Energy policy objectives Level 1 Informal institutions Values, norms, attitudes Believes on gas scarcity, state vs. market, orientation on consumer interest. First NIE pillar: property rights Level 2 Formal institutions (International) treaties/laws Gas Directives and national Gas Acts, competition policy. Second NIE pillar: transaction costs, contracts Level 3 Institutional arrangements Contracts, guidelines Actual regulation: net-codes, tax rates, emission ceilings. Neoclassical Economics, Agency theory Level 4 Market structure/individual's behavior Level of unbundling, price and output levels, investments.

  6. Hold-up and gas policy credibility

  7. Continued Conclusion on hold-up: • The hold-up problem is very likely to occur in gas markets; Conclusions from the theory: 2) The hold-up problem is not easily solved via commitment rules; 3) Any solution requires a sufficiently pro-industry regulator.

  8. A change of focus Theory: a pro-industry regulator is paramount. In terms of the NIE figure: level 1, commonly assumed given. Solution: before changing levels 2 and 3, change the regulatory focus at level 1.

  9. Follow-up research How will changing the regulatory focus away from its traditional pro-consumer view impact the provisions emanating from the Gas Directives?

More Related