International Trade with Solar Energy Technology Components
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Transcript of International Trade with Solar Energy Technology Components
DIW BERLIN
1
International Trade with Solar Energy Technology Components
Evidence on the Structure and Determinants?
34th IAEE International ConferenceWednesday June 22nd 2011
Session 63
Felix GrobaGerman Institute of Economic Research Berlin
Department of Energy, Transport and EnvironmentSupported by Heinrich Böll Foundation
DIW BERLIN
DIW BERLIN
Motivation & Research Hypotheses (1)
20. Apr 2023 2
Source: own calculations, Data retrieved from UN COMTRADE, WITS DATABASE
24.7 bn. $
12.5 bn. $1.9 bn. $
1.8 bn. $
1.4 bn. $
3.1 bn. $
2.8 bn. $
1.5bn.$
2.3 bn. $
1.1 bn.$
24.7 bn. $
12.5 bn. $1.9 bn. $
1.8 bn. $
1.4 bn. $
3.1 bn. $
2.8 bn. $
1.5bn.$
2.3 bn. $
1.1 bn.$
24.7 bn. $
12.5 bn. $1.9 bn. $
1.8 bn. $
1.4 bn. $
3.1 bn. $
2.8 bn. $
1.5bn.$
2.3 bn. $
1.1 bn.$
Figure 1. Development of Solar energy technology component exports by country group 1996-2008 and market structure 2008
• 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)
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H2: A regulatory environment supportive of renewable energies increases imports of solar energy technology goods.
What determines trade with solar energy technology components ? Is there evidence on the Porter hypothesis?
What role do regulation and trade barriers in importing countries play in determining solar energy technology exports?
H1: Stringent environmental regulation and renewable energy policy frameworks explain high exports of solar energy technologies.
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II. Empirical Model and Estimation Method
Backup
Table of Content
I. Literature on Environmental Regulation and Trade
III. Data and Descriptive Statistics
IV. Estimation Results
V. Conclusion
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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.
5
Research gap:• Detailed analysis of trade with renewable (solar) technology components.• Analysis of policy environment in importing countries.
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II. Empirical Model and Estimation Method
Backup
Table of Content
I. Literature on Environmental Regulation and Trade
III. Data and Descriptive Statistics
IV. Estimation Results
V. Conclusion
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Empirical Model and Estimation Method (1)
(1)
(3)
7
Xijt = trade flow ß = coefficientsYijt = economic mass j Dij = distance
1 2
30ijt
ß ßit jt
ijtßij
Y YX ß
D
0 1 2 3 4 5ln ln ln ln ln ln lnijt it jt it it jt i j t ijtX ß ß Y ß Y ß R ß I ß R d d d
FEGLS:
(2)
• Inconsistent under error heterogeneity. • Inconsistent under persistent zero trade flows.
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.
0 1 2 3 4 5ln ln ln ln ln ln ln lnijt it jt it it jt i j t ijtX ß ß Y ß Y ß R ß I ß R d d d
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Empirical Specification
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• Balanced panel of bilateral export flows from 1999-2007.
0 1 2 3 4 5 6
7 8 9 10 13
14 15
ln( ) ln( ) ln( ) ln( ) ln(distance )
ln( ) ln( )
_
ijt it jt it jt ij ij
it it it
jit
SolarEXP GDP GDP POP POP language
IndexEnvreg SolarElectShare RDsolarPOP REPolicy
Import Tariff IndexEnvre
16 ln( )
ln
jt it
i j t ijt
g REElectShare
d d d
Estimated Model:
• 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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II. Empirical Model and Estimation Method
Backup
Table of Content
I. Literature on Environmental Regulation and Trade
III. Data and Descriptive Statistics
IV. Estimation Results
V. Conclusion
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Data and Descriptive Statistics
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H1: Stringent environmental regulation and renewable energy policy frameworks explain high exports of solar energy technologies.
Sources: IEA(2010), EIA (2011)
Figure 3: Public R&D expenditure for solar energy in US $ per capita for selected OECD countries 1996 -2007
Figure 2: Share of solar electricity generation from total electricity generation for selected OECD countries 1996 - 2007Output oriented measures:
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:
Per capita public R&D budget solar energy (+)•Policy stringency variable (Johnstone 2010).
Policy of renewable energy policies•Incentive tariffs, quotas, tax measures, voluntary agreements, tradable certificates.
•Dummy for introduction.•Duration of policy.
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Output oriented measures:
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.
Data and Descriptive Statistics
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H2: A regulatory environment supportive of renewable energies increases imports of solar energy technology goods
Sources: UNCTAD TRAINS (2010), EIA (2011)
Figure 9: Global non-hydro renewable net electricity generation as share of total electricity generation 1996 - 2008
Figure 10: Development of OECD solar energy exports and respective mean tariff applied by importing countries.
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Estimation Results
General trade parameter
(except GDP)
Renewable energy support
H 1
Policy Framework
H 2
( )
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Findings & Conclusion
20. Apr 2023 13
• 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!
14……..Backup
Contact:Felix GrobaDIW Berlin Mail:Mail: [email protected]: +49 30 89189681
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Questions to deal with
(1) Fixed effects problematic(2) Dependent Variable (what to estimate)
(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
0 1 2 3 3ln ln ln ln ln lnijt jit it jt it jt ij t ijtX X ß ß Y ß Y ß R ß R d d
0 1 2 3 3ln ln ln ln ln lnijt it jt it jt ij t ijtX ß ß Y ß Y ß R ß R d d
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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
Explaination
Instatantaneous gas water heatersOther instantaneous or storage water heaters, non-electricSteam or other vapour generating boilers - Other vapour generating boilers, including hybrid boilersHeat exchange units [Heat-exchange units for solar-thermal or geothermal applications.]
Concentrator systems to intensify solar power in solar energy systems, other optical elements
Static converters [Inverters for converting DC to AC power] - change solar energy into electricityOther lead-acid accumulators [solar batteries], i .e batteries for energy storage in off-grid photovoltaic Photosensitive semiconductor devices, incl. photovoltaic cells whether or not assembled in modules or made up into panels; l ight emitting diodes
Wind Turbine TowersOther Steam engines, windmill, without pumpsParts for Steam engines and windmillsPumps for l iquids, whether or not fitted with a measuring device, other pumpsGenerating sets, electric, wind-poweredOther generating setsElectric generating set and rotary converters - combining electric generator and either hydraulic turbine or sterling engine
8413.818502.31
8502.39 (ex)8502.40
8412.80(ex)8412.90(ex)
7308.20 Wind Energy
8504.40 (ex)8507.20 (ex)8541.40 (ex)
Solar Photovoltaik
8419.198402.19 (ex)8419.50 (ex)
9002.90
Table 1: Nomenclature of selected renewable energy technologies, HS 1996HS Code
8419.11 Solar Thermal
Source: OECD/Eurostat [1999], Steenblik [2005a], Steenblick [2005b], Steenblick [2006], UNCTAD [2005], IPCC [2007]
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Global Market Analysis – Country Specifics
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ij
/RXA 100ln
/
ij iji
ij ijj ij
X X
X X
(1) (2) ij
/RCA 100ln
/
ij iji
ij iji
X X
M M
X = ExportsM = Importsi = Product Groupj = Country Index
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
I. MotivationII. Market Analysis
i. Literaturii. Variables
III. Panel
iii. Methodiii. Results
Country Share of Global Export* Export Specialization* (1) Comparative Advantage*(1)
1997 2003 2008 1997 2003 2008 1997 2003 2008
China 6.4% 13.6% 28.5% 45 69 97 70 23 83
Germany 14.1% 13.2% 16.4% 21 12 39 17 -9 -9
Japan 15.1% 17.5% 9.9% 47 87 52 42 50 82
United States 15.2% 9.2% 6.3% 5 -10 -34 -38 -13 -13
Italy 4.7% 3.8% 3.2% -12 -21 -25 14 13 -22
France 5.7% 4.2% 3.0% -10 -29 -39 0 12 5
Korea, Rep. 2.3% 2.2% 2.9% -29 -30 -11 -31 -90 -43
United Kingdom 6.4% 4.5% 2.8% 3 -7 -21 -1 36 44
Sum: 69.9% 68.2% 73.0%Sum OECD 83.6% 73.2% 61.0%
RXA > 0: export specialization, market share of global technology export larger than averageRCA > 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
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Empirical Model and Estimation Method (2)
Country pair fixed effects
• explaining bilateral trade• controlling for the resistance to trade of a specific country pair
Exporter and importer country fixed effects
• 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
0 1 2 3ln ln ln ln lnijt it jt ij i j t ijtX ß ß Y ß Y ß D d d
0 1 2 3ln ln ln ln lnijt it jt ij i j t ijtX ß ß Y ß Y ß D d d d
Potential effects:- Country specific time invariant - country specific time variant- Country pair specific time invariant - country specific time variant
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• Innovations are relevant for trade [Krugman 1979]
• Patents as indicator of innovation output• Very dynamic innovative activity in
renewable energies
Data and Descriptive Statistics
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H1b: Countries that are more innovative on renewable energies export more solar energy technologies
Sources: OECD(2010)
Figure 7: Country share in RE OECD patent applications 1990 - 2007
Figure 5: Innovative activity in total patent applications and renewable energy patent application in OECD countries 1980 – 2007 (1996 = 100)
it
it
iti
total patentsShareTotPat
total patents
Country share in total OECD patent applications (+)
Country share in total OECD renewable energy patent applications (+)
it
it
iti
renewable energy patentsShareREPat
renewable energy patents
Problem: •Data not solar energy technology specific
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Figure 4: Introduction of Renewable Energy Policies by country 1978 - 2010
US UK SEPT
NONL
KRIT
IEGR
FRES DK
DE
CH
CA
BEAT
US UKSE
PT
NO
NLKR
JPIT GR
FRFI
ES
DK
DE
CH
CA
BE
AUAT
UKSENO
NL
KR JPITIE
GRFR
FI
ESDKDE
CH
BE
AU
AT
US
UKSEPT
NONL
KR
IT
IE GR
FR FIES
DK DE
CABE
AT
UKSENO
NLKRJP
IT
FI
DK
BE
AU
AT
US PT JPITDECH CAAU
1980 1985 1995 2000 2005 20101990
Incentive Tariffs
Investment Incentives
Obligations
Tax Measures
Tradable Certificates
Voluntary Programmes
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
Backup 2 - Introduction of renewable energy policies