With interest in topics such as climate change, energy security, and alternative energy sources being at an all-time high, the effects of today's decisions now rest on the shoulders of future generations. There are no easy answers to our energy issues, so costs and benefits must be considered when evaluating all energy alternatives; alongside that, prices must be right and need to reflect the full social costs to society of a given source of energy.
Energy Economics outlines the fundamental issues and possible solutions to the challenges of energy production and use, and presents a framework for energy decisions based upon sound economic analysis. It considers market forces and policy goals, including economic prosperity, environmental protection, and other considerations that affect societal well-being. This book focuses on both energy choices and the impact of these choices on market performance, environmental conditions, and sustainability. The initial section covers the fundamental economic concepts for analyzing energy markets. Following this, a detailed analysis of established energy sources, specifically fossil fuels and nuclear energy, leads into consideration of energy alternatives such as renewable energy and next-generation alternatives. Electricity production and regulatory trends are covered in depth. The final section considers policy: environmental considerations, sustainability, and energy security. The concluding chapter is a comprehensive vision for our energy future.
Drawing on current energy headlines, perspectives familiar from the popular press, and views outside economics, this text sharpens students' ability to understand, evaluate, and critique policy using appropriate economic analysis. The text builds a foundation that culminates in a view of a comprehensive energy policy that improves upon the vacillations of past decades.
Table of Contents
Table of Contents
List of Figures
List of Tables
List of Abbreviations
Part One Fundamentals of Energy Economics
Chapter 1: Why Energy Economics?
Chapter 2: Energy, Markets, and Society
Chapter 3: Static Efficiency
Chapter 4: Dynamic Efficiency
Part Two Conventional Energy Sources
Chapter 5: Oil
Chapter 6: Natural Gas
Chapter 7: Coal
Chapter 8: Nuclear Energy
Part Three Alternative Energy Sources
Chapter 9: Renewable Energy
Chapter 10: Next-Generation Alternatives
Chapter 11: Energy Efficiency
Part Four Electricity
Chapter 12: Traditional Electricity Regulation
Chapter 13: Electricity Restructuring and DeregulationPart Five Energy Policy
Chapter 14: Energy and the Environment
Chapter 15: Energy and Sustainability
Chapter 16: Energy Security
Chapter 17: A Comprehensive Energy Policy: The Big Picture
Peter M. Schwarz is a Professor of Economics and Associate, Energy Production and Infrastructure Center (EPIC) at UNC Charlotte, USA. He has published numerous articles on energy, environment, and electricity pricing that have appeared in such journals as the American Economic Review, the RAND Journal of Economics, and the Energy Journal. He has travelled internationally to present his work in these areas, including Israel, Germany, and China (five times).
‘The economics of energy resources and their markets is one of the most active areas of research today. We have been in need of a text that can match the demands of an important and rapidly changing field. There is no doubt Schwarz has given us that text! He has produced a unique text that brings readers inside and up to date on this rapidly changing field. His book is comprehensive in its coverage of all energy resources. Readers will appreciate how he is able in each chapter to integrate the institutional, scientific, and economic dimensions unique to each energy resource. Rather than separate chapters on economics, geology, and regulations he brings them together and demonstrates how each contributes to understanding the special allocation questions posed for each type of energy resource. The book closes by considering how decisions on which energy resources society should use must confront the broader questions of environmental protection and sustainability. The book’s design, with integrated treatment of each individual energy resource, allows instructors to use it as a full text or select components for specialized courses.’ — V. Kerry Smith, Emeritus Regents Professor and Emeritus University Professor of Economics, Arizona State University, USA
‘Schwarz’s work is an adroit combination of explanations of energy markets and the environmental issues that arise from such markets. The text ably combines traditional market structure issues with the impact of new and potential energy technology in a way that will open students’ to the challenges and opportunities in today’s energy issues.’ — Andrew N. Kleit, Professor of Energy and Environmental Economics, The Pennsylvania State University, USA
‘Energy markets and policies are moving targets; economics is an important way to maintain one’s ability to understand and assess what we see and what may come next. Applying his extensive research and teaching experience in energy economics, Prof. Schwarz provides here a comprehensive and accessible introduction to the field. He covers the background and evolution of traditional sources and upcoming fuels, the basic economics of competitive markets, resource management and market failures, as well as policy concerns relating to the environment and sustainability. Teachers and students with a wide range of interests will find much gain from this book.’ — Tim Brennan, Professor of Public Policy, University of Maryland Baltimore County, and Senior Fellow, Resources for the Future, USA
‘Schwarz’s book, Energy Economics, integrates microeconomic theory and applications into the technical, regulatory and policy complexities of alternative energy uses, substitutes, sources, technologies, and prices. He carefully keeps front and center consideration of the multiple energy-related environmental damages, national security concerns, reliability issues, and potential for technological change. The students this text is designed to serve will find it is easy to understand, as it is written by a scholar with a lifetime of widely-respected research on energy economics and a firm grasp on key principles. This book is a valuable, up-to-date survey that will provide a comprehensive framework for those engaged in energy economics research, and those who want to understand this complex and important field.’ — Darwin C. Hall, Professor Emeritus of Economics, California State University Long Beach, USA
‘I am happy to strongly endorse the publication of Peter Schwarz's book Energy Economics. I actually wish I had such an introduction to the field of energy economics when I studied energy policy in Germany and in the U.S. From my perspective, the specific value of this book lies in the application of many things we know from Economics to the very dynamic field of energy. This application makes the book unique and important. I particularly like the straightforward way of describing and explaining economic terms. In this regard, the highlighted keywords throughout the book help to quickly look up specific terms. I can very well imagine that students of Economics and other Social Sciences will find the book helpful to get an orientation in the field of energy economics. For professionals, the book can be a guide on how to maneuver through the complex world of energy policy, economics, and technology. Finally, it is very welcome that the book is not only titled "energy economics" and then continues by addressing electricity economics only but actually addresses all aspects of energy, i.e. also oil, shale gas, transportation, heating, sustainability, climate, security, etc.’ — Dr. Steffen Jenner, Policy Fellow, Das Progressive Zentrum, Germany
‘This book is a comprehensive treatment of the energy markets as they relate to economic efficiency, government regulation and environmental policy. The book extensively uses the tools of economic analysis to establish a framework for evaluating past, present and future energy market operations and government policies, but at a level that is useful for economist and non-economist readers alike. Although the pivotal point for serious analysis of energy was the oil crisis of the 1970s, there are many current and near future energy issues that receive a thorough treatment in this book, such as market-based instruments for renewable resources (including financial instruments), energy sustainability and security, and other environmental concerns. This book is must read for anyone seriously interested in the evolving energy public policy debate.’ — Herb Thompson, Former President at Thompson Consulting and Associate Professor at J. Warren McClure School of Information and Telecommunication Systems, Ohio University, USA, now retired
‘Peter Schwarz's new book, Energy Economics, is a must read. College students, activists of all stripes, the informed layman and government policy makers can profit from all or parts of his comprehensive treatment of this all important subject.’ — Christopher Garbacz, Ph.D., Formerly Professor of Economics, Director, Economics, Mississippi Public Utilities Staff, USA
‘I can't wait to read Energy Economics with my students! The book begins with an accessible discussion of market efficiency and market failures. This sets the stage for discussions of the history, science, and economics of different energy resources: oil, natural gas, coal, nuclear, renewables, and next-generation alternatives with specific attention to electricity. The book closes with chapters focusing on policies related to the environment, national security, and sustainability. Along the way students are introduced to a host of topics in industrial organization, environmental, and natural resource economics through well-motivated examples from energy policy. A great way to learn about both energy and economics!’ — Stephen Holland, Professor, University of North Carolina, Greensboro Department of Economics, USA
"A strength of the book is the wide use of real world energy issues and studies to motivate the use of economic tools. Such issues sprinkled liberally throughout the book often in separate boxes should be highly moti-vational for readers of the book, might also be of interest to more general readers, and could provide useful examples to instructors of other more general courses in micro, regulation, environmental economics, policy, political economy, and even more advanced courses in energy economics."- The Energy Journal, Kevin F. Forbes- The Catholic University of America