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How much does real GDP respond to unanticipated changes in the real price of oil? Commonly used censored VAR models suggest a substantial decline in real GDP in response to unexpected increases in the real price of oil, yet no response to unexpected declines. We show that these estimates are invalid. Based on a structural model that encompasses both symmetric and asymmetric models as special cases, correctly computed impulse responses are of roughly the same magnitude in either direction, consistent with formal tests for symmetric responses. We discuss implications for theoretical models and for policy responses to energy price shocks.
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Models that treat innovations to the price of energy as predetermined with respect to U.S. macroeconomic aggregates are widely used in the literature. For example, it is common to order energy prices first in recursively identified VAR models of the transmission of energy price shocks. Because exactly identifying assumptions are inherently untestable, this approach in practice has required an act of faith in the empirical plausibility of the delay restriction used for identification. An alternative view that would invalidate such models is that energy prices respond instantaneously to macroeconomic news, implying that energy prices should be ordered last in recursively identified VAR models. In this paper, we propose...
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A set of 13 US based experts in post-combustion and oxy-fuel combustion CO2 capture systems responded to an extensive questionnaire asking their views on the present status and future expected performance and costs for amine-based, chilled ammonia, and oxy-combustion retrofits of coal-fired power plants. This paper presents the experts' responses for technology maturity, ideal plant characteristics for early adopters, and the extent to which R&D and deployment incentives will impact costs. It also presents the best estimates and 95% confidence limits of the energy penalties associated with amine-based systems. The results show a general consensus that amine-based systems are closer to commercial application, but...
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The analysis framework introduced in this paper utilizes the recognition that exergy is a form of environmental free energy to provide a fundamental basis for valuing environmental interactions independent from their secondary impacts (e.g., global warming, photochemical smog). In order to extend exergy to analyze environmental interactions, modifications are required to the traditional representation of the environment and definition of the dead state used in technical exergy analysis. These are accomplished through a combination of logical extensions and use of non-equilibrium thermodynamic principles. The framework is comprised of two separate components: (1) environmental exergy analysis and (2) anthropocentric...
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