IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v29y2007i3p563-577.html
   My bibliography  Save this article

Allocating the CO2 emissions of an oil refinery with Aumann-Shapley prices

Author

Listed:
  • Pierru, Axel

Abstract

Linear programming is widely used by multiproduct oil-refining firms, which minimize a refinery's variable cost under a set of constraints. In addition to operating costs, this variable cost can include the cost associated with the refinery's CO2 emissions. We suggest a quite general approach combining use of Aumann-Shapley cost-sharing method and breakdown of the objective function of the linear program. This approach determines an appropriate rule for the allocation of the refinery's CO2 emissions (or, in general, variable costs) among the various finished products, which can be used for purposes of Life Cycle Assessment. A numerical application to a simplified refining model is presented.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Pierru, Axel, 2007. "Allocating the CO2 emissions of an oil refinery with Aumann-Shapley prices," Energy Economics, Elsevier, vol. 29(3), pages 563-577, May.
    • Handle: RePEc:eee:eneeco:v:29:y:2007:i:3:p:563-577
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140-9883(06)00015-6
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Louis J. Billera & David C. Heath & Joseph Raanan, 1978. "Internal Telephone Billing Rates—A Novel Application of Non-Atomic Game Theory," Operations Research, INFORMS, vol. 26(6), pages 956-965, December.
    2. Dov Samet & Yair Tauman & Israel Zang, 1984. "An Application of the Aumann-Shapley Prices for Cost Allocation in Transportation Problems," Mathematics of Operations Research, INFORMS, vol. 9(1), pages 25-42, February.
    3. YunTong Wang, 2002. "original papers : Proportionally adjusted marginal pricing method to share joint costs," Review of Economic Design, Springer;Society for Economic Design, vol. 7(2), pages 205-211.
    4. Friedman, Eric & Moulin, Herve, 1999. "Three Methods to Share Joint Costs or Surplus," Journal of Economic Theory, Elsevier, vol. 87(2), pages 275-312, August.
    5. MIRMAN, Leonard J. & TAUMAN, Yair, 1982. "Demand compatible equitable cost sharing prices," LIDAM Reprints CORE 472, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    6. Haimanko, Ori, 2001. "Cost sharing: the nondifferentiable case," Journal of Mathematical Economics, Elsevier, vol. 35(3), pages 445-462, June.
    7. Griffin, James M, 1972. "The Process Analysis Alternative to Statistical Cost Functions: An Application to Petroleum Refining," American Economic Review, American Economic Association, vol. 62(1), pages 46-56, March.
    8. Leonard J. Mirman & Yair Tauman, 1982. "Demand Compatible Equitable Cost Sharing Prices," Mathematics of Operations Research, INFORMS, vol. 7(1), pages 40-56, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ibrahim Abada, Andreas Ehrenmann, and Xavier Lambin, 2020. "On the Viability of Energy Communities," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    2. Frédérick Bernard & Anne Prieur, 2006. "Biofuel market and carbon modeling to evaluate French biofuel policy," Working Papers hal-02469003, HAL.
    3. Olivier Massol & Stéphane Tchung-Ming, 2009. "Stratégies coopératives dans l'industrie du GNL : l'argument de la rationalisation est-il fondé ?," Working Papers hal-02469480, HAL.
    4. Pierru, Axel, 2010. "Allocating the CO2 emissions of an oil refinery with Aumann-Shapley prices: A reply," Energy Economics, Elsevier, vol. 32(3), pages 746-748, May.
    5. Gomes, Gabriel Lourenço & Szklo, Alexandre & Schaeffer, Roberto, 2009. "The impact of CO2 taxation on the configuration of new refineries: An application to Brazil," Energy Policy, Elsevier, vol. 37(12), pages 5519-5529, December.
    6. Ibrahim Abada & Andreas Ehrenmann & Xavier Lambin, 2017. "On the viability of energy communities," Working Papers EPRG 1716, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    7. Abada, I. & Ehrenmann, A. & Lambin, X., 2018. "Unintended consequences: The snowball effect of energy communities," Cambridge Working Papers in Economics 1828, Faculty of Economics, University of Cambridge.
    8. Mohamed Amine BOUTABA, 2009. "Does Carbon Affect European Oil Companies' Equity Values?," EcoMod2009 21500018, EcoMod.
    9. Anthony Paris, 2016. "The Effect of Biofuels on the Link between Oil and Agricultural Commodity Prices: A Smooth Transition Cointegration Approach," EconomiX Working Papers 2016-5, University of Paris Nanterre, EconomiX.
    10. Tehrani Nejad Moghaddam, Alireza, 2010. "Allocating the CO2 emissions of an oil refinery with Aumann-Shapley prices: Comment," Energy Economics, Elsevier, vol. 32(1), pages 243-255, January.
    11. Massol, Olivier & Tchung-Ming, Stéphane, 2010. "Cooperation among liquefied natural gas suppliers: Is rationalization the sole objective?," Energy Economics, Elsevier, vol. 32(4), pages 933-947, July.
    12. Albert Banal-Estañol & Jeremy Eckhause & Olivier Massol, 2015. "Incentives for early adoption of carbon capture technology: further considerations from a European perspective," Working Papers hal-02475485, HAL.
    13. Tehrani Nejad Moghaddam, Alireza & Saint-Antonin, Valérie, 2008. "Impact of tightening the sulfur specifications on the automotive fuels' CO2 contribution: A French refinery case study," Energy Policy, Elsevier, vol. 36(7), pages 2449-2459, July.
    14. Eric Johnson & Carl Vadenbo, 2020. "Modelling Variation in Petroleum Products’ Refining Footprints," Sustainability, MDPI, vol. 12(22), pages 1-15, November.
    15. Vincent Brémond & Emmanuel Hache & Tovonony Razafindrabe, 2015. "On the link between oil price and exchange rate : A time-varying VAR parameter approach," Working Papers hal-03206684, HAL.
    16. Abdul-Manan, Amir F.N. & Arfaj, Abdullah & Babiker, Hassan, 2017. "Oil refining in a CO2 constrained world: Effects of carbon pricing on refineries globally," Energy, Elsevier, vol. 121(C), pages 264-275.
    17. Bernard, F. & Prieur, A., 2007. "Biofuel market and carbon modeling to analyse French biofuel policy," Energy Policy, Elsevier, vol. 35(12), pages 5991-6002, December.
    18. de Moura, Gustavo Nikolaus Pinto & Legey, Luiz Fernando Loureiro & Howells, Mark, 2018. "A Brazilian perspective of power systems integration using OSeMOSYS SAMBA – South America Model Base – and the bargaining power of neighbouring countries: A cooperative games approach," Energy Policy, Elsevier, vol. 115(C), pages 470-485.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bogetoft, Peter & Hougaard, Jens Leth & Smilgins, Aleksandrs, 2016. "Applied cost allocation: The DEA–Aumann–Shapley approach," European Journal of Operational Research, Elsevier, vol. 254(2), pages 667-678.
    2. Yves Sprumont, 2010. "An Axiomatization of the Serial Cost-Sharing Method," Econometrica, Econometric Society, vol. 78(5), pages 1711-1748, September.
    3. Hervé Moulin & Yves Sprumont, 2007. "Fair allocation of production externalities : recent results," Revue d'économie politique, Dalloz, vol. 117(1), pages 7-36.
    4. Hougaard, Jens Leth & Tind, Jørgen, 2009. "Cost allocation and convex data envelopment," European Journal of Operational Research, Elsevier, vol. 194(3), pages 939-947, May.
    5. Friedman, Eric J., 2012. "Asymmetric Cost Sharing mechanisms," Games and Economic Behavior, Elsevier, vol. 75(1), pages 139-151.
    6. Eric Bahel & Christian Trudeau, 2018. "Consistency requirements and pattern methods in cost sharing problems with technological cooperation," International Journal of Game Theory, Springer;Game Theory Society, vol. 47(3), pages 737-765, September.
    7. Wang, Yun-Tong & Zhu, Daxin, 2002. "Ordinal proportional cost sharing," Journal of Mathematical Economics, Elsevier, vol. 37(3), pages 215-230, May.
    8. Moulin, Herve, 2002. "Axiomatic cost and surplus sharing," Handbook of Social Choice and Welfare, in: K. J. Arrow & A. K. Sen & K. Suzumura (ed.), Handbook of Social Choice and Welfare, edition 1, volume 1, chapter 6, pages 289-357, Elsevier.
    9. Boonen, Tim J. & De Waegenaere, Anja & Norde, Henk, 2020. "A generalization of the Aumann–Shapley value for risk capital allocation problems," European Journal of Operational Research, Elsevier, vol. 282(1), pages 277-287.
    10. Moulin, Herve & Sprumont, Yves, 2006. "Responsibility and cross-subsidization in cost sharing," Games and Economic Behavior, Elsevier, vol. 55(1), pages 152-188, April.
    11. Eric Friedman, 1997. "Weak and Strong Consistency in Additive Cost Sharing," Departmental Working Papers 199707, Rutgers University, Department of Economics.
    12. Eric Friedman, 1997. "Paths in Additive Cost Sharing," Departmental Working Papers 199706, Rutgers University, Department of Economics.
    13. Boonen, T.J. & De Waegenaere, A.M.B. & Norde, H.W., 2012. "A Generalization of the Aumann-Shapley Value for Risk Capital Allocation Problems," Other publications TiSEM 2c502ef8-76f0-47f5-ab45-1, Tilburg University, School of Economics and Management.
    14. Calvo, E. & Santos, J. C., 2001. "Prices in Mixed Cost Allocation Problems," Games and Economic Behavior, Elsevier, vol. 37(2), pages 243-258, November.
    15. Yves Sprumont, 2008. "Nearly serial sharing methods," International Journal of Game Theory, Springer;Game Theory Society, vol. 37(2), pages 155-184, June.
    16. Jens Leth Hougaard & Jørgen Tind, 2013. "Cost Allocation with Limited Information," MSAP Working Paper Series 01_2013, University of Copenhagen, Department of Food and Resource Economics.
    17. Larrea, C. & Santos, J.C., 2007. "A characterization of the pseudo-average cost method," Mathematical Social Sciences, Elsevier, vol. 53(2), pages 140-149, March.
    18. Larrea, Concepcion & Santos, J.C., 2006. "Cost allocation schemes: An asymptotic approach," Games and Economic Behavior, Elsevier, vol. 57(1), pages 63-72, October.
    19. Moulin, Herve & Sprumont, Yves, 2005. "On demand responsiveness in additive cost sharing," Journal of Economic Theory, Elsevier, vol. 125(1), pages 1-35, November.
    20. Forgo, Ferenc & Szidarovszky, Ferenc, 1999. "On consistency of income and cost sharing," Socio-Economic Planning Sciences, Elsevier, vol. 33(3), pages 221-230, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:29:y:2007:i:3:p:563-577. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eneco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.