Climate, wind energy, and CO2 emissions from energy production in Denmark

Federico Carlini; Bent Jesper Christensen; Nabanita Datta Gupta; Paolo Santucci de Magistris

doi:10.1016/j.eneco.2023.106821

Climate, wind energy, and CO₂ emissions from energy production in Denmark

Federico Carlini, Bent Jesper Christensen^*, Nabanita Datta Gupta, Paolo Santucci de Magistris

^*Corresponding author af dette arbejde

Publikation: Bidrag til tidsskrift/Konferencebidrag i tidsskrift /Bidrag til avis › Tidsskriftartikel › Forskning › peer review

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Abstract

The dynamic relation between CO₂ emissions and wind energy in Denmark is analyzed using a fractional cointegration approach, extended to accommodate covariates. The impact of climate and forces of demand on the potential of wind power production for emissions abatement is investigated. Emissions decline as temperature increases. Wind power production increases with precipitation and North Atlantic oscillations. Aggregate output matters for emissions in a manner consistent with an environmental Kuznets curve (EKC). Accounting for a seasonal trend, our main estimate of marginal CO₂ emissions avoided (MEA) per MWh of wind energy produced is 0.16 tonnes, based on impulse responses. This estimate of the abatement potential of wind power is lower than values reported in the literature, but statistically significant, and robust to including climate and EKC variables. MEA is reduced by about one third by treating electricity prices as endogenous, and by one quarter by including emissions from combustion of biomass. However, formal exogeneity tests indicate that the main MEA estimate is not inflated due to left-out general equilibrium effects. Without covariates, estimated MEA is 0.07, and insignificant.

Originalsprog	Engelsk
Artikelnummer	106821
Tidsskrift	Energy Economics
Vol/bind	125
Antal sider	25
ISSN	0140-9883
DOI	https://doi.org/10.1016/j.eneco.2023.106821
Status	Udgivet - sep. 2023

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10.1016/j.eneco.2023.106821Licens: CC BY

1-s2.0-S0140988323003195-mainForlagets udgivne version, 1,4 MBLicens: CC BY

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title = "Climate, wind energy, and CO2 emissions from energy production in Denmark",

abstract = "The dynamic relation between CO2 emissions and wind energy in Denmark is analyzed using a fractional cointegration approach, extended to accommodate covariates. The impact of climate and forces of demand on the potential of wind power production for emissions abatement is investigated. Emissions decline as temperature increases. Wind power production increases with precipitation and North Atlantic oscillations. Aggregate output matters for emissions in a manner consistent with an environmental Kuznets curve (EKC). Accounting for a seasonal trend, our main estimate of marginal CO2 emissions avoided (MEA) per MWh of wind energy produced is 0.16 tonnes, based on impulse responses. This estimate of the abatement potential of wind power is lower than values reported in the literature, but statistically significant, and robust to including climate and EKC variables. MEA is reduced by about one third by treating electricity prices as endogenous, and by one quarter by including emissions from combustion of biomass. However, formal exogeneity tests indicate that the main MEA estimate is not inflated due to left-out general equilibrium effects. Without covariates, estimated MEA is 0.07, and insignificant.",

keywords = "Climate, CO emissions, Demand, Fractional cointegration",

author = "Federico Carlini and Christensen, {Bent Jesper} and {Datta Gupta}, Nabanita and {Santucci de Magistris}, Paolo",

note = "Publisher Copyright: {\textcopyright} 2023 The Author(s)",

year = "2023",

month = sep,

doi = "10.1016/j.eneco.2023.106821",

language = "English",

volume = "125",

journal = "Energy Economics",

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TY - JOUR

T1 - Climate, wind energy, and CO2 emissions from energy production in Denmark

AU - Carlini, Federico

AU - Christensen, Bent Jesper

AU - Datta Gupta, Nabanita

AU - Santucci de Magistris, Paolo

PY - 2023/9

Y1 - 2023/9

N2 - The dynamic relation between CO2 emissions and wind energy in Denmark is analyzed using a fractional cointegration approach, extended to accommodate covariates. The impact of climate and forces of demand on the potential of wind power production for emissions abatement is investigated. Emissions decline as temperature increases. Wind power production increases with precipitation and North Atlantic oscillations. Aggregate output matters for emissions in a manner consistent with an environmental Kuznets curve (EKC). Accounting for a seasonal trend, our main estimate of marginal CO2 emissions avoided (MEA) per MWh of wind energy produced is 0.16 tonnes, based on impulse responses. This estimate of the abatement potential of wind power is lower than values reported in the literature, but statistically significant, and robust to including climate and EKC variables. MEA is reduced by about one third by treating electricity prices as endogenous, and by one quarter by including emissions from combustion of biomass. However, formal exogeneity tests indicate that the main MEA estimate is not inflated due to left-out general equilibrium effects. Without covariates, estimated MEA is 0.07, and insignificant.

AB - The dynamic relation between CO2 emissions and wind energy in Denmark is analyzed using a fractional cointegration approach, extended to accommodate covariates. The impact of climate and forces of demand on the potential of wind power production for emissions abatement is investigated. Emissions decline as temperature increases. Wind power production increases with precipitation and North Atlantic oscillations. Aggregate output matters for emissions in a manner consistent with an environmental Kuznets curve (EKC). Accounting for a seasonal trend, our main estimate of marginal CO2 emissions avoided (MEA) per MWh of wind energy produced is 0.16 tonnes, based on impulse responses. This estimate of the abatement potential of wind power is lower than values reported in the literature, but statistically significant, and robust to including climate and EKC variables. MEA is reduced by about one third by treating electricity prices as endogenous, and by one quarter by including emissions from combustion of biomass. However, formal exogeneity tests indicate that the main MEA estimate is not inflated due to left-out general equilibrium effects. Without covariates, estimated MEA is 0.07, and insignificant.

KW - Climate

KW - CO emissions

KW - Demand

KW - Fractional cointegration

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U2 - 10.1016/j.eneco.2023.106821

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SN - 0140-9883

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JO - Energy Economics

JF - Energy Economics

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