• Environmental and Resource Economics Review
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• v.22 no.4
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• pp.613-641
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• 2013

This paper uses the error correction model to analyse dynamic gasoline price adjustments of the four refiners. Unlike the existing studies, this model allows a refiner's asymmetric adjustment to changes in the other refiners' prices as well as in its own price and costs. With the estimation results, we can obtain the following findings. First, there are the asymmetric price adjustments to changes in exchange rate and international gasoline price, but showing opposing directions. Second, for most of the refiners, the prices respond immediately to the lagged deviation from the long run equilibrium price, but asymmetrically respond for a few refiners. Third, there are some refiners that adjust their price to the other refiners' price deviation from the long run equilibrium. For some refiners, there are competitive price adjustments to the others' price deviations. These findings imply that a refiner faces inelastic demand, intends to maintain implicitly a relative level of its own price to others, and tends to respond competitively to the others' price deviation from the equilibrium.

• Environmental and Resource Economics Review
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• v.12 no.4
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• pp.637-661
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• 2003

This paper analyzes the impact of import liberalization of petroleum product market in 1997 on the behavior of a domestic industry, regarded as a typical oligopoly. Based on the theory of implicit cartel, two regression equations were formulated and estimated for domestic production and refinery margin using monthly data for the period from Jan. 1994 to June 2003. Estimation results show that not only did domestic production rise sharply but also the refining cost fell substantially throughout 1996 before the actual liberalization of imports, Such a response is clearly consistent with the implicit cartel theory, which suggests that once the difficulty of maintaining a cartel in the future is recognized, the cartel immediately collapses and anticipation of import liberalization can cause immediately lowering market price as well as an immediate expansion of the supply by a domestic industry. However, the significant reduction of refinery cost accompanied by a large contraction in domestic output after the actual implementation of import liberalization can be explained by the collapse of implicit cartel caused by the anticipated liberalization of imports. Thus, import liberalization in the sense of allowing entry of foreign producers into domestic market has seemed to be an effective means to weaken market power and induce more competitive conduct of domestic firms.

• Journal of Korean Society for Geospatial Information Science
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• v.21 no.4
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• pp.65-71
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• 2013

Wind shear means the variation of wind speed according to the height. Wind shear is the important factor affecting the energy production of wind turbines. Power Law is used to extrapolate wind speed data. Normally, a Power Law exponent of 0.143 is used and this is referred to as the 1/7th Power Law. The Power Law exponent is affected by atmospheric stability and surface roughness of the site. Thus, it is necessary to calculate the Power Law exponent of the site exactly for an accurate estimation of wind energy. In this study, wind resources were measured at the three Met-masts which were located in the coastal area of northeastern Jeju Island. The Power Law exponents of the sites were calculated and proposed using measured data. They were 0.141 at Handong, 0.138 at Pyeongdae, and 0.1254 at Udo. We compared annual energy productions which are calculated using a Power Law exponent of 0.143, the proposed value of the Power Law exponents for each site, and the measured data. As a result, the cases of calculating using the proposed values were more similar to the cases using the measured data than the cases using the 0.143 value. Finally, we found that the propsed values of the Power Law exponent are available to more accurately estimate wind resources.

• Geophysics and Geophysical Exploration
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• v.14 no.1
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• pp.58-68
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• 2011

As part of basic studies of monitoring carbon dioxide ($CO_2$) storage using electrical and seismic surveys, laboratory experiments have been conducted to measure resistivity and P-wave velocity changes due to the injection of $CO_2$ into water-saturated sandstone. The rock sample used is a cylinder of Berea sandstone. $CO_2$ was injected under supercritical conditions (10 MPa, $40^{\circ}C$). The experimental results show that resistivity increases monotonously throughout the injection period, while P-wave velocity and amplitude decrease drastically due to the supercritical $CO_2$ injection. A reconstructed P-wave velocity tomogram clearly images $CO_2$ migration in the sandstone sample. Both resistivity and seismic velocity are useful for monitoring $CO_2$ behaviour. P-wave velocity, however, is less sensitive than resistivity when the $CO_2$ saturation is greater than ~20%. The result indicates that the saturation estimation from resistivity can effectively complement the difficulty of $CO_2$ saturation estimations from seismic velocity variations. By combining resistivity and seismic velocity we were able to estimate $CO_2$ saturation distribution and the injected $CO_2$ behaviour in our sample.

• Environmental and Resource Economics Review
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• v.22 no.3
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• pp.411-435
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• 2013

Since catastrophe from explosion of Hukushima nuclear power plant, concerns over possibility of exposure to radioactive matter has been disseminating all over the world and frequent accidents of domestic nuclear power plants also has been amplifying throughout the nation. In the past, major focus was made on compensation for local residents who live nearby nuclear power plants, but focal point of this study is on wage premium of workers who are employed in R&D of nuclear power plants. It is difficult to derive socially desirable result if private sectors are responsible for compensation on workers who suffer from physical damages due to the exposure to radioactive matter. Because victims should verify the damages that occur in the working places. This study conducted a survey on which job would prefer the respondents who are engaged with the nuclear R&D projects as exposure levels to radioactive matter, security of job, location of firms, and work intensity differ. As a result, exposure to radioactive matter was the most important attribute in choosing alternative jobs followed by job security, work intensity and job location. Annual willingness to pay for reduction of exposure to radioactive matter was estimated as 7730~7770 thousand KRW depending on different econometric models. Therefore, Korean government should prepare institutional foundation in order that appropriate compensation should be made on workers who are engaged in R&D projects on nuclear power plants if they have damages from the exposure to radioactive matter.

• Environmental and Resource Economics Review
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• v.22 no.2
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• pp.367-391
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• 2013

After the Fukushima nuclear accident, the external costs of generating electricity from nuclear power plants such as additional safety compliance costs and possible accident risk action costs have gained increasing attention from the public, policy-makers and politicians. Consequently, estimates of the external costs of nuclear power are very deliberate issue that is at the center of the controversy in Korea. In this paper, we try to calculate the external costs associated with the safety of the nuclear power plants, particularly focusing on additional safety compliance costs and possible accident risk action costs. To estimate the possible accident risk action costs, we adopt the damages expectation approach that is very similar way from the external cost calculation of Japanese government after the Fukushima accident. In addition, to estimate additional safety compliance costs, we apply the levelized cost of generation method. Furthermore, we perform the sensitivity analysis to examine how much these social costs increase the electricity price rate. Estimation results of the additional security measure cost is 0.53Won/kWh ~ 0.80Won/kWh depending on the capacity factor, giving little change on the nuclear power generation cost. The estimates of possible accident risk action costs could be in the wide range depending on the different damages of the nuclear power accident, probability of the severe nuclear power accident and the capacity factor. The preliminary results show that it is 0.0025Won/kWh ~ 26.4188Won/kWh. After including those two external costs on the generation cost of a nuclear power plant, increasing rate of electricity price is 0.001%~10.0563% under the capacity factor from 70% to 90%. This paper tries to examine the external costs of nuclear power plants, so as to include it into the generation cost and the electricity price. This paper suggests one of the methodologies that we might internalize the nuclear power generations' external cost, including it into the internal generation cost.

• Environmental and Resource Economics Review
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• v.22 no.3
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• pp.547-580
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• 2013

As energy conservation can be realized through changes in the composition of goods and services consumed, there is a need to assess indirect and total household energy consumption. The Korean household sector was responsible for more than 55% of Korea's total energy consumption in the 1995 to 2010 period. More than 69% of household energy consumption was indirect. Thus, not only direct but also indirect household energy consumption should be the target of energy conservation. Electricity consumption became in 2009 the main source of household energy consumption in Korea. Households consume more and more electricity intensive goods and services, a sign of increasing living standards. Decrease in energy intensities of products consumed by Korean households contributed greatly to reduce the increase in the total household energy consumption. However, switching took place towards more energy intensive products, thus the structure effect was negative. It is necessary to direct consumption and production towards much less energy intensive goods and services as to reduce energy consumption or its growth rate. The Korean government should readjust low energy and electricity prices to cost-reflective prices levels as these low prices are one of the main reasons for the consumption of more energy intensive products. This study differentiates prices of oil products and electricity between households and industries, as to allow more accurate estimation.

• Environmental and Resource Economics Review
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• v.23 no.3
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• pp.515-551
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• 2014

Recently, there has been a debate as to whether bioethanol should replace some portion of gasoline for fuels in South Korea, as energy security as well as climate change issues are rising as a significant national agenda. However, a considerable amount of subsidy will be required to compensate for the higher price of bioethanol-blended gasoline. In this context, government subsidy will obtain justification only when the positive social gains from consuming bioethanol for fuels can exceed the negative social costs. Through a nation-wide choice experimental survey, we examine if South Koreans have a positive value as well as non-linear preferences on substituting bioethanol for gasoline. The results reveal that the willingness to pay for purely domestic bioethanol-blended gasoline within 10% is about 52 KRW; Koreans have concave preferences on the blending ratio of bioethanol to gasoline. The turning point of the blending ratio of bioethanol was 6.5%. Also, we found inverse U-shaped curve between income and bioethanol choice probability and the turning point of the income was calculated as 250~299million KRW. Politically conservative propensity advocates uses of bioethanol blended gasoline, but awareness on bioethanol or more weights on environmental conservation have significantly negative effects on the choice of bioethanol. However, the design of the survey questionnaire is incompatible with the RFS of Korea and assumes orthogonality among the following four interrelated attributes: (i) domestic or offshore procurement of feedstocks in the case of domestic production, (ii) domestic production or import of bioethanol, (iii) the blending ratios, and (iv) the retail price increases. In addition, the results of model estimation and of model selection test are not definite. Hence, the results in this study should not be directly applied to the design of the specifics of the Korean RFS. Hence, the results in this study require cautions in applying to the design of the Korean RFS policy.

• Environmental and Resource Economics Review
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• v.13 no.2
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• pp.219-243
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• 2004

Generally, electricity market has monopoly market structure because of need of enormous investment for infrastructure. However, the introduction of competition in network industry as electricity is a tendency of the world with decreasing the effects of economy of scale due to the advancement of technology. Now, electricity industry restructuring is in progress but the competition in electricity retail market is not in force yet in Korea. Whether a effective competition exist or not is very important to policy decision maker who drive restructuring, but there are small numbers of quantitative researches on that. In this study, we estimated the effectiveness of competition in the electricity retail market through switching costs. If switching costs are high, consumers actually can be locked in incumbent firm in spite of introduction of competition. Therefore switching is a critical factor to determine effectiveness of competition and to estimate the size of switching costs quantitatively can proffer the information about whether the competition in the electricity retail market is effective or not in the future. We estimated switching costs using consumer' stated-preference data by conjoint analysis. In according to estimation results, the cost of switching process is not so high, but the relative brand loyalty of an incumbent company is significantly high. And the price is considered as the most important factor choosing an electric service commodity. Based on the empirical results, it is possible to analyze the relationship between suppliers' competitiveness resulted from management efficiency and customers' switching possibilities. The paper therefore provides guidance for suppliers in deciding to enter into retail competition and for policy makers in introducing retail competition. And it has a significance of estimating the switching costs directly.

• Environmental and Resource Economics Review
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• v.16 no.1
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• pp.129-169
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• 2007

The purpose of this study is to experiment and simulate the newly-updated Second Generation Model for Korea (SGM-Korea). With the updated model, we tried to simulate effect of carbon tax on $CO_2$ emissions and other macroeconomic variables for Korea. The baseline data are compared with projected profiles by various scenarios to evaluate its performance. Our contribution in this study is to having up-graded the model from its earlier version by building new hybrid input-output table based on 2000 input-output and energy balanced tables. According to our estimation, total $CO_2$ emission in Korea has already increased in 2000 to about 1.86 times the 1990 figure. The level of carbon tax required for the current level of $CO_2$ emission to be reduced to the 1995 or 2000 level seems to be too high for Korean economy to bear. It is possible to find a reasonable level of carbon tax, however, if it can combine it with improvement of energy efficiency at the rate of 0.5% to 1% per year. For Korea to meet its obligation to reduce $CO_2$ emissions, therefore, it is imperative for her to improve energy efficiency as well as to develop alternative energy source reducing its dependence on fossil fuel.