Spatial Modeling of Bargaining Among Stakeholders in Energy Policy: The Case of Japanese Nuclear Plants

This paper evaluates the evolving political will in Japan to restart nuclear power plants to generate electric power, in light of the country’s political and economic developments over the past few years. We apply a model of collective decision-making processes (CDMPs), using the KAPSARC Toolkit for Behavioral Analysis (KTAB), to simulate the interactions among different interest groups including policymakers, national and local political leaders, electricity companies, and the public, given their varying interests, goals and priorities.

World Oil and Critical Mineral Study: A Global VAR Analysis

Critical minerals (CMs), such as lithium, cobalt, nickel, and rare earth metals, are essential for the development of clean energy technologies across the whole value chain of wind and solar power, electricity networks, and electric vehicles (EVs). Demand for these minerals is expected to grow quickly as energy transitions accelerate. Other sectors that depend on CMs include the electronics, defense and space industries.

World Oil and Inventory Study: A Global VAR Analysis

Despite numerous journal articles, forecasting studies, and books, very little is known about the actual quantitative value, or economic cost, of shocks to world oil markets. The potential consequences of a given political or economic disturbance are unclear, and appear to depend on market conditions at the time of forecast and the idiosyncratic nature of the shock (see Figure 1). This study develops a new analytical framework to analyze shocks to world oil markets. We build upon the global vector autoregression (GVAR) model developed in 2016 by Mohaddes  and Pesaran to include a new variable, OECD oil inventories, creating the GVAR Oil and Inventory Model — GOVAR. We also expand its geographic coverage by adding two new countries, Russia and Venezuela.    

Behavioral Aspects of Energy Transition: A KAPSARC-Energy Systems Catapult (ESC) Joint Methodological Report

KAPSARC’s work on innovation in electricity transitions has focused on unbundling services in the electricity sector (KAPSARC 2016) and developing the microeconomic foundation for a reliability service. Our research has investigated the experiences of industries resembling the electric power sector and those involved in the sharing economy that have recently faced technological disruptions. In Fuentes (2016), we argued that reallocating risk across the electricity market, and the apparent paradox between (spare) capacity and price signals (scarcity) could open up a new role for incumbent electricity firms. 

Country Horizon: Russia

This report provides an up-to-date overview of Russian domestic and foreign policy issues related to the oil and natural gas markets. We also discuss the potential role of hydrogen in Russia’s short-term energy strategy. We present a succinct overview of the domestic determinants of Russian energy policy and then describe Russia’s ongoing and planned energy infrastructure projects. In doing so, we particularly focus on Russia’s recent efforts to bring its new hydrocarbon resources to global markets. We also discuss recent developments related to Russia’s dialogue with its key energy partners.    

Brazil, Russia, India, China, and South Africa: Potential Roadways to A New Global Governance Mechanism for Energy and Climate

The recent regionalization of global politics and trade has placed Brazil, Russia, India, China, and South Africa (BRICS) at the forefront of the geopolitical agenda.  

The Limit, Save, and Grow Act and Possible Scenarios for the Future of the Inflation Reduction Act

The IRA has already begun delivering tangible benefits in the U.S., with much of it going to Republican districts. While LGSA has brought House Speaker McCarthy into the national spotlight, he does not have sufficient political clout to pursue a reversal of the IRA, especially when it would hurt the electoral prospects of individual Republican members of Congress. The Democratic majority in the Senate and President Biden’s veto threat further secure IRA policies. Our assessment suggests that Biden will use other bargaining chips before conceding on the (energy-related) provisions of IRA.

Gaming Out the Proposed Price Cap on Russian Oil

In a June 29, 2022, communique, the G7 countries agreed to explore ways to impose a price cap on Russian oil exports. The main mechanism would be a ban on the provision of insurance, logistics and financial services by G7 nations for cargoes sold above the price ceiling. While there are some workarounds, the oil market is overwhelmingly served by G7 service providers, which could create a significant impediment to Russian exports. The G7 accounts for about 30% of the world’s total oil consumption and has called on other countries to join this multilateral effort with the hope of bringing the Russian-Ukraine conflict to a peaceful resolution. While regulating Russian exports would impact all members of the G7 and the rest of the world, the European Union (EU) was by far the largest market for Russian energy before the current crisis, and their energy systems are designed for Russian grades, making it difficult to replace.

The Effects of Russian Sanctions on the Global Economy

On February 24, 2022, Russia began a ‘special military operation’ in Ukraine, which quickly escalated into a militarized conflict across multiple fronts. The act drew immediate disapproval from the United Nations and led most members of the Western alliance to impose sanctions on Russia, which has had negative spillover effects on the world economy.

The Impact of Global Trade Disruptions on World Oil Markets

After decades of relatively smooth trade liberalization, a wave of protectionist measures and a global trade war is now threatening world trade. On September 1, 2019, the United States (U.S.) imposed a new series of tariffs on Chinese imports worth more than $100 billion.

Iran Sanctions: Implications for the Oil Market

United States (U.S.) Iran energy sanction waivers expired May 2, 2019. The waivers permitted eight economies (China, Greece, India, Italy, Japan, South Korea, Taiwan, and Turkey) to temporarily continue buying oil from Iran. Based on KAPSARC modeling of the political decision-making process, this Instant Insight – the first such KAPSARC publication – finds that the international community, and indeed some of the waiver economies, will at best partially comply with reinstated sanctions. China, India and Turkey are particularly unlikely to comply with U.S. sanctions and will maintain much of their current oil trade with Iran, the modeling shows. The paper also simulates the likely impact on the global oil price of ending the waivers in four scenarios which show: i) no oil price rise if the sanctions don’t work at all, ii) an oil price rise of up to 12% by Q2 2020 if Iranian oil exports drop by an average 42%, iii) a 30%-plus price increase if the sanctions are 100% effective, and iv) no significant price change if Saudi Arabia offsets reduced Iranian crude oil exports by increasing its output and exports. The analysis in the paper is based on two in-house models: the KAPSARC Toolkit for Behavioral Analysis (KTAB) and the KAPSARC Global Energy Macroeconometric Model (KGEMM).

Implications of the 2021 Iran-China Deal for the Oil Market

In late March 2021, China and Iran signed a cooperation pact to stimulate investments in Iran’s oil, gas and petrochemical infrastructure. We refer to this pact as the ‘Iran-China deal’ throughout this manuscript. This deal attracted substantial attention for its effects on global oil markets and the geopolitics of the region. Reports suggest that China may invest as much as $400 billion in Iran’s infrastructure and oil sector over 25 years owing to the deal. In exchange, Iran will supply oil to China at below-market prices.

Navigating Energy Diplomacy in Times of Recovery and Conflict: A Study of Cross-border Energy Trade Dynamics

Science Direct

The Effects of a Shock to Critical Minerals Prices on the World Oil Price and Inflation

Science Direct

Environmental Consequences of Geopolitical Crises: The Case of Economic Sanctions and Emissions

Science Direct

Reframing the Net-Zero Debate from Obligation to Opportunity: The Promise of the Circular Carbon Economy

Springer Link

Contextualizing Uncontrolled Oil Trade Flows: A Novel Categorization

Science Direct

Unintended Transnational Effects of Sanctions: A Global Vector Autoregression Simulation

Taylor & Francis

Documenting Energy Flows between States: The Global Energy Relations Dataset (GERD), 1978–2014

Taylor & Francis

The Sensitivity of Oil Price Shocks to Preexisting Market Conditions: A GVAR Analysis

Science Direct

The Pacifying Effect of Energy Dependence on Interstate Conflict: A Large-N analysis

Science Direct

The Pacifying Effect of Energy Dependence on Interstate Conflict: A Large-N Analysis

Science Direct

Renewables and the Future of Geopolitics: Revisiting Main Concepts of International Relations from the Lens of Renewables

Russian Journal of Economics

Economic Sanctions and Banking Crises in Target Economies

Defence and Peace Economics

A Story of Institutional Misfit: Congress and US Economic Sanctions

Foreign Policy Analysis

Interstate Conflict: Recent Findings and Controversies

Terrorism and Political Violence

Enhancing Environmental, Social and Governance Frameworks To Scale Up Climate Finance

Pragmatic Policy Support to Enable a Sustainable Energy Transition in Marine Fuels and Related Infrastructure

T20

Enabling Pragmatic Policies: Leveraging ESG Frameworks Towards a Just Transition

T20