nep-ene New Economics Papers
on Energy Economics
Issue of 2021‒06‒14
fifty-four papers chosen by
Roger Fouquet
London School of Economics

  1. Concentration Versus Diversification: A Spatial Deployment Approach to Improve the Economics of Wind Power By Klie, Leo; Madlener, Reinhard
  2. Blowing against the winds of change? The relationship between anti-wind initiatives and wind turbines in Germany By Manuel Gardt; Tom Brokel; Rosina Moreno
  3. Wind turbines, solar farms, and house prices By Dröes, Martijn; Koster, Hans R.A.
  4. The socio-economic cost of wind turbines: A Swedish case study By Westlund, Hans; Wilhelmsson, Mats
  5. Quantifying trade-offs for the spatial allocation of onshore wind generation capacity: A case study for Germany By Tafarte, Philip; Lehmann, Paul
  6. Climate Club Futures: On the Effectiveness of Future Climate Clubs By William D. Nordhaus
  7. The Distributional Implications of Climate Policies Under Uncertainty By Ulrich Eydam
  8. Climate Policies and Labor Markets in Developing Countries By Noe Reidt
  9. Optimal Climate Policy with Fat-tailed Uncertainty: What the Models Can Tell Us By De Bruin, Kelly; Kiran Krishnamurthy, Chandra
  10. Does idiosyncratic risk matter for climate policy? By Richard Jaimes
  11. Climate policies after Paris: Pledge, trade, and recycle. Insights from the 36th Energy Modeling Forum study (EMF36) By Böhringer, Christoph; Peterson, Sonja; Rutherford, Thomas F.; Schneider, Jan; Winkler, Malte
  12. Decarbonizing the European Automobile Fleet: Impacts of 1.5 °C-compliant Climate Policies in Germany and Norway By Walter, Antonia; Held, Maximilian; Pareschi, Giacomo; Pengg, Hermann; Madlener, Reinhard
  13. Economic Growth and Equity in Anticipation of Climate Policy By Alena Miftakhova; Clément Renoir
  14. Climate Neutral Production, Free Allocation of Allowances under Emissions Trading Systems, and the WTO: How to Secure Compatibility with the ASCM By Roland Ismer; Harro van Asselt; Jennifer Haverkamp; Michael Mehling; Karsten Neuhoff; Alice Pirlot
  15. Climate Change and the Social Cost of Carbon: DICE Explained and Expanded By G. Cornelis van Kooten; Mark E. Eiswerth; Jonathon Izett; Alyssa R. Russell
  16. Instantaneous Hybridization Factor: New Metric to More Accurately Model Hybrid-Electric Vehicle Emissions By Holmén, Britt A.; Robinson, Mitchell K.
  17. Do Electricity Prices Affect Electric Vehicle Adoption? By Bushnell, James PhD; Muehlegger, Erich PhD; Rapson, David PhD
  18. Why electricity market models yield different results: Carbon pricing in a model-comparison experiment By Ruhnau, Oliver; Bucksteeg, Michael; Ritter, David; Schmitz, Richard; Böttger, Diana; Koch, Matthias; Pöstges, Arne; Wiedmann, Michael; Hirth, Lion
  19. Future market design options for electricity markets with high RES-E: lessons from the Irish Single Electricity Market By Lynch, Muireann Á.; Longoria, Genora; Curtis, John
  20. The impact of income inequality on public environmental expenditure with green consumerism By Lesly Cassin; Paolo Melindi-Ghidi; Fabien Prieur
  21. The Macroeconomic Effects of a Carbon Tax to Meet the U.S. Paris Agreement Target: The Role of Firm Creation and Technology Adoption By Alan Finkelstein Shapiro; Gilbert E. Metcalf
  22. Transición energética y retos del sector energético en Colombia By Astrid Martínez Ortiz
  23. Globalization, Governance and the Green Economy in Sub-Saharan Africa: Policy Thresholds By Simplice A. Asongu; Joseph Nnanna
  24. An Adaptation-Mitigation Game: Does Adaptation Promote Participation in International Environmental Agreements? By Miguel Borrero; Santiago J. Rubio
  25. Urban Air Mobility: History, Ecosystem, Market Potential, and Challenges By Cohen, Adam P; Shaheen, Susan A PhD; Farrar, Emily M
  26. Do economic endeavors complement sustainability goals in the emerging economies of South and Southeast Asia? By Sharma, Rajesh; Sinha, Avik; Kautish, Pradeep
  27. Carbon Tax and Energy Innovation at Crossroads of Carbon Neutrality: Designing a Sustainable Decarbonization Policy By Cheng, Ya; Sinha, Avik; Ghosh, Vinit; Sengupta, Tuhin; Luo, Huawei
  28. Who emits CO2? Landscape of ecological inequalities in France from a critical perspective By Antonin Pottier; Emmanuel Combet; Jean-Michel Cayla; Simona de Lauretis; Franck Nadaud
  29. The pricing of carbon risk in syndicated loans: which risks are priced and why? By Torsten Ehlers; Frank Packer; Kathrin de Greiff
  30. The role of information and communication technology in encountering environmental degradation: Proposing an SDG framework for the BRICS countries By Chien, Fengsheng; Anwar, Ahsan; Hsu, Ching-Chi; Sharif, Arshian; Razzaq, Asif; Sinha, Avik
  31. Does financial development reinforce environmental footprints? Evidence from emerging Asian countries By Sharma, Rajesh; Sinha, Avik; Kautish, Pradeep
  32. An examination of energy efficiency retrofit scheme applications by low-income households in Ireland By Pillai, Arya; Tovar Reaños, Miguel; Curtis, John
  33. Disaggregate Consumption Feedback and Energy Conservation By Andor, Mark; Gerster, Andreas; Goette, Lorenz
  34. Optimal Climate and Fiscal Policy in an OLG economy By Richard Jaimes
  35. The asymmetric effect of public private partnership investment on transport CO2 emission in China: Evidence from quantile ARDL approach By Anwar, Ahsan; Sharif, Arshian; Fatima, Saba; Ahmad, Paiman; Sinha, Avik; Khan, Syed Abdul Rehman; Jermsittiparsert, Kittisak
  36. Monthly Report No. 12/2020 By Ambre Maucorps; Roman Römisch; Roman Stöllinger
  37. “Salvation and Profit”: Deconstructing the Clean-Tech Bubble By Vincent Giorgis; Tobias Huber; Didier Sornette
  38. Does Economic Growth, International Trade and Urbanization uphold Environmental Sustainability in sub-Saharan Africa? Insights from Quantile and Causality Procedures By Chimere O. Iheonu; Ogochukwu C. Anyanwu; Obinna K. Odo; Solomon Prince Nathaniel
  39. Is Public Equity Deadly? Evidence from Workplace Safety and Productivity Tradeoffs in the Coal Industry By Gilje, Erik P.; Wittry, Michael D.
  40. Do energy efficiency improvements reduce energy use? Empirical evidence on the economy-wide rebound effect in Europe and the United States By Berner, Anne; Bruns, Stephan B.; Moneta, Alessio; Stern, David I.
  41. 'Bad' Oil, 'Worse' Oil and Carbon Misallocation By Renaud Coulomb; Fanny Henriet; Léo Reitzmann
  42. Economic impacts of decarbonizing the Swiss passenger transport sector By Vanessa Angst; Chiara Colesanti Senni; Markus Maibach; Martin Peter; Noe Reidt; Renger van Nieuwkoop
  43. When Externalities Collide: Influenza and Pollution By Zivin, Joshua Graff; Neidell, Matthew; Sanders, Nicholas; Singer, Gregor
  44. Blue hydrogen and industrial base products: The future of fossil fuel exporters in a net-zero world By Cloete, Schalk; Ruhnau, Oliver; Cloete, Jan Hendrik; Hirth, Lion
  45. Oil Price Shocks and Economic Growth in Oil-Exporting Countries By Maryam Ahmadi; Matteo Manera
  46. Fragmented Landscape of European Policies in the Energy Sector: First-Mover Advantages By Kristina Govorukha; Philip Mayer; Dirk Rübbelke
  47. Fossil fuel subsidy inventories vs. net carbon prices: A consistent approach for measuring fossil fuel price incentives By Böhm, Jens; Peterson, Sonja
  48. What Kinds of Distributed Generation Technologies Defer Network Expansions? Evidence from France By Nicolas Astier; Ram Rajagopal; Frank A. Wolak
  49. The Mobile Phone in Governance for Environmental Sustainability in Sub-Saharan Africa By Simplice A. Asongu; Rexon T. Nting
  50. The palm tree: A cropscape of monoculture and devouring carbon sinks By Edakunny, Preeti
  51. Gains associated with linking the EU and Chinese ETS under different assumptions on restrictions, allowance endowments, and international trade By Winkler, Malte; Peterson, Sonja; Thube, Sneha
  52. The Economic Costs of NIMBYism - Evidence From Renewable Energy Projects By Stephen Jarvis
  53. Natural resources and wealth inequality: a cross-country analysis By Sosson Tadadjeu; Henri Njangang; Simplice A. Asongu; Yann Nounamo
  54. Behavioral Anomalies and Fuel Efficiency: Evidence from Motorcycles in Nepal By Massimo Filippini; Nilkanth Kumar; Suchita Srinivasan

  1. By: Klie, Leo (RWTH Aachen University); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))
    Abstract: Previous studies on the economics of onshore wind parks in Germany found that geographic diversifi-cation results in no significant system costs savings. Furthermore, such diversification does not neces-sarily result in higher market values (Eising et al., 2020) or better merchant profitability (Klie and Madlener, 2020). Therefore, the question arises whether an alternative allocation (i.e. a concentration) rather than diversification of the German wind park fleet is more economical. In this paper, we compare the future (2030) market values, subsidy needs and total system costs of a more concentrated versus a more diversified allocation of onshore wind turbines in Germany. The results show that a concentration of turbines, in areas where the gap between market values and levelized costs of electricity is smallest (i.e. in the North of Germany), is more beneficial in terms of subsidy need and system costs. The analysis further shows that these areas are also more beneficial in terms of market values, when using system-friendly turbine configurations selected based on the same approach. To incentivize such a selection of areas and turbine configurations based on minimal gaps between market values and levelized costs an alternative renewables support scheme is presented, which favors such minimal gaps in its auctioning process.
    Keywords: market value; market penetration; spatial concentration; spatial diversification; renewable energy support scheme; onshore wind; Germany
    JEL: O25 P48 Q42 Q48 R32
    Date: 2020–02
  2. By: Manuel Gardt; Tom Brokel; Rosina Moreno
    Abstract: This study analyzes the formation and spatial structure of anti-wind-farm citizens’ initiatives (CIs) as a result of the development of wind turbine generators (WT) in Germany over the last three decades. It offers a novel, spatiotemporal view of the intensely discussed tension between WT and citizens’ perceptions of them. Using a new dataset and employing survival models, the study explores for the first time the co-development of WT and anti-wind initiatives, considering a wide range of regional socio-economic factors and multiple periods. The results confirm a rapidly growing dynamic of the establishment of local opposition, which the magnitude of locally existing WT and proximity to established anti-wind farm initiatives strongly drives.
    Keywords: Local opposition, wind energy development, Germany, citizens’ initiatives, acceptance, survival analysis
    JEL: C54 O18 O33 R11 R15 R59
    Date: 2021–06
  3. By: Dröes, Martijn; Koster, Hans R.A.
    Abstract: To cope with the increasing demand for renewable energy, wind turbines have become taller over time. In addition, with advances in solar cell technology the commercial exploitation of solar farms has increased considerably in recent years. This paper adds to the existing literature by examining the effect of wind turbines - with a particular focus on turbine height - and solar farms on house prices. Using detailed data from the Netherlands between 1985-2019, the results show that tall wind turbines have considerably stronger effects on house prices, as compared to small turbines. For example, a tall turbine (>150m) decreases house prices within 2km by 5.4%, while a small turbine (
    Keywords: House Prices; solar farms; wind turbines
    JEL: L95 Q15 Q42 R31
    Date: 2020–07
  4. By: Westlund, Hans (Department of Urban Planning and Environment); Wilhelmsson, Mats (Department of Real Estate and Construction Management, Royal Institute of Technology)
    Abstract: The expansion of wind turbines plays a significant role in developing the ability of a country like Sweden to achieve climate-neutral energy production without relying on nuclear power plants. Wind-turbine energy production is expected to grow in coming decades. Conflicts may arise between, on the one hand, the government and the energy authority, and, on the other hand, between municipalities and property owners, especially if this expansion affects other economic activities, such as tourism and reindeer husbandry, or affects property values. This report aims to analyse the negative capitalisation of wind turbines on property values in Sweden over the last ten years. Our conclusions clearly show a relatively significant capitalisation, and that this capitalisation is relatively local, within ten kilometres of the wind power plant. Large wind turbines, or larger clusters of wind turbines in wind farms, impose a greater socio-economic cost in lower property values.
    Keywords: sustainability; wind turbines; capitalisation; housing values; hedonic analysis
    JEL: Q01 Q53 R51 R53
    Date: 2021–05–27
  5. By: Tafarte, Philip; Lehmann, Paul
    Abstract: The deployment of onshore wind power is an important means to mitigate climate change. However, wind turbines also have negative impacts at the local scale, like disamenities to residents living nearby, changes in landscape quality, or conflicts with nature conservation. Our paper analyses how these impacts affect the optimal siting of wind turbines, as compared to a spatial allocation focused solely on minimizing generation costs. To quantify the spatial trade-offs between these criteria, we propose a novel approach using Pareto frontiers and a Gini-like potential trade-off indicator. Our analysis builds on a spatial optimization model using geographical information system data for Germany. We show that spatial trade-offs between the criteria under consideration are significant. The size of the trade-off varies substantially with the criteria under consideration, depending on the spatial heterogeneity of each criterion as well as on the spatial correlation between the criteria. Spatial trade-offs are particularly pronounced between nature conservation (measured by impacts on wind powersensitive birds) and other criteria.
    Keywords: impact assessment,Germany,renewable energy,spatial optimization,wind power
    JEL: D62 Q42 Q51 Q53 R14
    Date: 2021
  6. By: William D. Nordhaus (Cowles Foundation, Yale University)
    Abstract: A proposal to combat free-riding in international climate agreements is the notion of a “climate club†or coalition of countries to encourage high levels of participation. Empirical models of climate clubs in the early stages relied on the analysis of single-period coalition formation. The results suggested that there were limits on the potential strength of clubs and that it would be difficult to have deep abatement strategies in the club framework. The current work extends the single-period approach to many periods and develops an approach analyzing “supportable policies†to analyze multi-period clubs. The major surprise of the study is the interaction between the club structure and rapid technological change. Neither alone will produce incentive-compatible policies that can attain the ambitious objectives of international climate policy. The trade sanctions without rapid technological decarbonization will be too costly to produce highly costly abatement; similarly, rapid technological decarbonization by itself will not induce deep abatement because of country free-riding. But the two together can achieve the international objectives.
    Keywords: Climate change, Club, Optimal climate policy, Social cost of carbon
    JEL: Q5 Q54 C6 H4
    Date: 2021–05
  7. By: Ulrich Eydam (University of Potsdam)
    Abstract: Promoting the decarbonization of economic activity through climate policies raises many questions. From a macroeconomic perspective, it is important to understand how these policies perform under uncertainty, how they affect short-run dynamics and to what extent they have distributional effects. In addition, uncertainties directly associated with climate policies, such as uncertainty about the carbon budget or emission intensities, become relevant aspects. We study the implications of emission reduction schemes within a Two-Agent New-Keynesian (TANK) model. This quantitative exercise, based on data for the German economy, provides various insights. In the light of frictions and fluctuations, compared to other instruments, a carbon price (i.e. tax) is associated with lower volatility in output and consumption. In terms of aggregate welfare, price instruments are found to be preferable. Conditional on the distribution of revenues from climate policies, quantity instruments can exert regressive effects, posing a larger economic loss on wealth-poor households, whereas price instruments are moderately progressive. Finally, we find that unexpected changes in climate policies can induce substantial aggregate adjustments. With uncertainty about the carbon budget, the costs of adjustment are larger under quantity instruments.
    Keywords: macroeconomic dynamics, environmental policy, inequality, policy design
    JEL: Q52 Q58 E32 E61
    Date: 2021–06
  8. By: Noe Reidt (CER–ETH – Center of Economic Research at ETH Zurich, Switzerland)
    Abstract: This paper investigates the impact of climate policies on the labor markets in developing countries characterized by a large informal economy. I conduct the analysis employing a dynamic general equilibrium model, which incorporates the three prevalent working groups in developing countries: informal self-employment, informal employment, and formal employment. To capture the mobility of workers between these groups, I use a search and match mechanism with search frictions for formal and informal firms and with on-thejob search. The model is calibrated to India to elaborate on the impact of climate policies envisioning a tax on energy with different redistribution schemes of the tax revenue. The results show that climate policies strengthening the position of the productive formal sector can lead to a triple dividend effect: emissions drop due to the energy tax, whereas the redistribution scheme increases the formal labor share and welfare. Developing countries with widespread informality can utilize climate policies to improve labor conditions while reaching their climate targets.
    Keywords: development, climate policies, employment, search frictions, informality
    JEL: C68 E26 J46 J64 Q56
    Date: 2021–05
  9. By: De Bruin, Kelly; Kiran Krishnamurthy, Chandra
    Date: 2021
  10. By: Richard Jaimes
    Abstract: This paper considers an overlapping generations model with idiosyncratic labor income risk and a climate externality. We illustrate analytically that market-based climate policies must be adjusted when there are other intertemporal distortions in the economy. Specifically, we show that under precautionary savings the government finds it optimal to tax capital and to correct the carbon price accordingly. In a numerical exercise, we find that idiosyncratic risk leads to an optimal capital income tax rate of 48% and a carbon price 11% lower than its Pigouvian level in the first best
    Keywords: Fiscal policy, Optimal taxation, Externalities, Environmental policies.
    JEL: E62 H21 H23 Q58
    Date: 2021–05–28
  11. By: Böhringer, Christoph; Peterson, Sonja; Rutherford, Thomas F.; Schneider, Jan; Winkler, Malte
    Abstract: This article summarizes insights of the 36th Energy Modeling Forum study (EMF36) on the magnitude and distribution of economic adjustment costs to greenhouse gas emission reduction targets. Under the Paris Agreement countries voluntarily committed themselves to emission reductions - so-called Nationally Determined Contributions (NDCs) - in order to combat global warming. The study suggests that tightening of NDCs in line with the commonly agreed 2 degrees temperature target will induce global economic costs of roughly 1% in 2030 - yet, these costs are unevenly spread across regions with fossil fuel exporting countries being most adversely affected from the transition towards a low-carbon economy. In order to reduce adjustment costs at the global and regional level, comprehensive emissions trading which exploits leastcost abatement options is strongly desirable as it can relax contentious normative debates on equitable burden sharing. Lump-sum recycling of revenues from emissions pricing in equal amounts to every household appeals as an attractive strategy to mitigate regressive effects and thereby make stringent climate policy more acceptable on societal fairness grounds.
    Keywords: Paris Agreement,emissions pricing and trading,revenue recycling
    JEL: D58 H23 Q54 Q58
    Date: 2021
  12. By: Walter, Antonia (RWTH Aachen University); Held, Maximilian (ETH Zurich, Institute of Energy Technology); Pareschi, Giacomo (ETH Zurich, Institute of Energy Technology); Pengg, Hermann (Audi e-gas Betreibergesellschaft m.b.H.); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))
    Abstract: This paper focuses on assessing the impact of different policy measures, in particular different vehicle taxation schemes, on the composition of the fleet of newly registered cars in Norway and Germany. For this purpose, a fjeet turnover model was extended by an economic model for predicting tax-induced market penetration of different powertrain technologies. The economic model determines a cost-optimal powertrain portfolio of the newly registered passenger cars based on financial and non-financial aspects. Model evaluation was performed for the case of Norway and Germany by means of reference scenarios that map the current taxation and non-financial preferences, such as range anxiety. The reference scenario in both cases overestimates the role of ZEVs, but is able to reflect the differences in regionalities (driven mainly by the taxation). Considering disutility costs leads to a shift away from ZEVs. Among the considered non-financial preferences, range anxiety has the strongest in uence. The optimization framework is a valuable predictor of qualitative statements regarding the impact of tax measures on the fleet composition of newly registered passenger cars.
    Keywords: Decarbonization; alternative powertrain technologies; powertrain mix; consumer heterogeneity; non-financial preferences; techno-economic modeling; vehicle taxation
    JEL: H30 O38 R48
    Date: 2020–12
  13. By: Alena Miftakhova (CER–ETH – Center of Economic Research at ETH Zurich, Switzerland); Clément Renoir (CER–ETH – Center of Economic Research at ETH Zurich, Switzerland)
    Abstract: We study the role of the anticipation of climate policies on equity and economic growth in a numerical model of general equilibrium. The presence of the anticipation period allows the agents to adjust their choices before policy implementation. This period might change the equilibrium dynamics. It might also impact the redistribution of wealth in the economy. We choose the Swiss economy to exemplify and analyze these effects. The supply-side of the economy adjusts by redirecting the investments to “cleaner” sectors with a lower tax burden and higher profitability. On the demand side, welfare impacts by households vary according to their principal source of income. Households that have a high share of their income from capital rents benefit more from the policy’s announcement than others do. We find that, for the most stringent climate policies, the effect of anticipation is strongly positive but also regressive.
    Keywords: Climate policy, Environmental tax, Economic inequality, Endogenous growth, CGE Modelling
    JEL: C63 E62 O44 Q43 Q48
    Date: 2021–05
  14. By: Roland Ismer; Harro van Asselt; Jennifer Haverkamp; Michael Mehling; Karsten Neuhoff; Alice Pirlot
    Abstract: To reach climate neutrality, carbon emissions from the production of basic materials need to be significantly reduced. For governments’ support measures to be consistent with their World Trade Organization obligations, they need to be compatible with the WTO’s Agreement on Subsidies and Countervailing Measures (ASCM). This paper analyzes the ASCM consistency of three selected support schemes, namely: (1) free allocation under emissions trading systems such as the European Union Emissions Trading System (EU ETS) to operators of installations deemed to be at significant risk of carbon leakage; (2) a combination of a charge on carbon-intensive materials with free allocation; and (3) carbon contracts for differences (CCfDs) for operators of climate-neutral installations, in which governments pay out the incremental costs of climate neutral-production processes relative to the costs of conventional primary material production. The analysis reveals that the current system of carbon leakage protection through free allocation is vulnerable to challenges under the ASCM. By contrast, a transition to a combination of free allocation and a charge on carbon-intensive materials would implement consistent carbon-pricing and thus would very likely not amount to a subsidy under the ASCM. In a similar vein, support for climate-neutral installations through CCfDs could be designed in such a way that it confers no benefit, so that it would also not constitute a subsidy.
    Keywords: WTO, ASCM, Carbon Pricing, Free allowance allocation, Climate Contribution, Carbon Contracts for Difference
    JEL: K32 F13 Q54 Q56
    Date: 2021
  15. By: G. Cornelis van Kooten; Mark E. Eiswerth; Jonathon Izett; Alyssa R. Russell
    Keywords: climate science and climate modelling; energy balance; ocean heat; climate feedbacks; reforestation
    JEL: Q54 C61 E17 F64 H23
    Date: 2021–06
  16. By: Holmén, Britt A.; Robinson, Mitchell K.
    Abstract: Hybrid-electric vehicles are a growing segment of the vehicle market and their share is anticipated to continue to grow as automakers seek to comply with increasingly stringent fuel economy standards. Hybrid vehicles generally use less fuel and produce fewer associated emissions than their conventional counterparts. However, their emissions patterns are unique; hybrids produce zero emissions during certain operations when the internal combustion engine is off, but produce particulate emission spikes when the engine starts or restarts. The overall air quality implications of more hybrid vehicles on the roads are not well understood. Researchers at the University of Vermont collected real-time emissions and performance data from a hybrid vehicle operating in a variety of on-road conditions to develop a new parameter that could serve as the basis for future hybrid vehicle emissions models: the instantaneous hybridization factor. This parameter is the real-time proportion of a vehicle’s overall power use that comes from the hybrid propulsion system, and could be used in combination with known conventional vehicle emissions and operating data to derive more exact emissions estimates for hybrid vehicles. This research brief summarizes the findings and research implications from that work. View the NCST Project Webpage
    Keywords: Engineering, Combustion, Energy consumption, Highway grades, Hybrid vehicles, Pollutants, Propulsion
    Date: 2021–06–01
  17. By: Bushnell, James PhD; Muehlegger, Erich PhD; Rapson, David PhD
    Abstract: This report presents evidence that gasoline prices have a larger effect on demand for battery electric vehicles (BEVs) than do electricity prices in California. A spatially-disaggregated panel dataset of monthly BEV registration records was matched to detailed records of gasoline and electricity prices in California from 2014-2017, and the matched data was used to estimate the effect of energy prices on BEV demand. Two distinct empirical approaches (panel fixed-effects and a utility-border discontinuity) yield remarkably similar results: a given change in gasoline prices has roughly four times the effect on BEV demand as a similar percentage change in electricity prices.
    Keywords: Social and Behavioral Sciences, Electric vehicles, prices, operating costs, demand, electricity, gasoline, empirical methods, consumer behavior
    Date: 2021–05–01
  18. By: Ruhnau, Oliver; Bucksteeg, Michael; Ritter, David; Schmitz, Richard; Böttger, Diana; Koch, Matthias; Pöstges, Arne; Wiedmann, Michael; Hirth, Lion
    Abstract: The European electricity industry, the dominant sector of the world’s largest cap-and-trade scheme, is one of the most-studied examples of carbon pricing. In particular, numerical models are often used to study the uncertain future development of carbon prices and emissions. While parameter uncertainty is often addressed through sensitivity analyses, the potential uncertainty of the models themselves remains unclear from existing single-model studies. Here, we investigate such model-related uncertainty by running a structured model comparison experiment, in which we exposed five numerical power sector models to aligned input parameters—finding stark model differences. At a carbon price of 27 EUR/t in 2030, the models estimate that European power sector emissions will decrease by 36–57% when compared to 2016. Most of this variation can be explained by the extent to which models consider the market-driven decommissioning of coal- and lignite-fired power plants. Higher carbon prices of 57 and 87 EUR/t yield a stronger decrease in carbon emissions, by 45–75% and 52–80%, respectively. The lower end of these ranges can be attributed to the short-term fuel switch captured by dispatch-only models. The higher reductions correspond to models that additionally consider market-based investment in renewables. By further studying cross-model variation in the remaining emissions at high carbon prices, we identify the representation of combined heat and power as another crucial driver of differences across model results.
    Keywords: Carbon pricing,EU Emission Trading System (EU ETS),Electricity decarbonization,Power sector,Renewable energy,Fuel switch,Combined heat and power,Electricity market modeling,Model comparison,Model-related uncertainty
    JEL: Q4 Q5
    Date: 2021
  19. By: Lynch, Muireann Á.; Longoria, Genora; Curtis, John
    Date: 2021
  20. By: Lesly Cassin (Univ Paris I); Paolo Melindi-Ghidi (Univ Paris Nanterre, EconomiX); Fabien Prieur (Univ Montpellier CEE-M)
    Abstract: This article analyzes the impact of income inequality on environmental policy in the presence of green consumers. We first develop a model with two main ingredients: citizens, with different income capacities, have access to two commodities whose consumption differs in terms of price and environmental impact, and they vote on the environmental policy. In this setting, there exists a unique political equilibrium in which the population is split into two groups, that differ in the type of good, conventional vs. green, they consume. The analysis shows that a change in the level of inequality induces variations in both the size and composition of these two groups of citizens. This in turn determines whether or not more inequality stimulates the public policy. We then conduct an empirical investigation on a panel of European countries over the period 1996-2019. We find the existence of an inverted J-shape relationship between inequality and public environmental spending. This outcome can be explained by the combination of a composition effect, affecting the green group, and a substitution effect between private green consumption and public environmental spending.
    Keywords: income inequality, green consumption, environmental policy, probabilistic voting, political equilibrium
    JEL: Q58 H23 D31 D72
    Date: 2021–05
  21. By: Alan Finkelstein Shapiro (Tufts University); Gilbert E. Metcalf (Tufts University)
    Abstract: We analyze the quantitative labor market and aggregate effects of a carbon tax in a framework with pollution externalities and equilibrium unemployment. Our model incorporates endogenous labor force participation and two margins of adjustment influenced by carbon taxes: firm creation and green production-technology adoption. A carbon-tax policy that reduces carbon emissions by 35 percent - roughly the emissions reductions that will be required under the Biden Administration's new commitment under the Paris Agreement - and transfers the tax revenue to households generates mild positive long-run effects on consumption and output; a marginal increase in the unemployment and labor force participation rates; and an expansion in the number and fraction of firms that use green technologies. In the short term, the adjustment to higher carbon taxes is accompanied by gradual gains in output and consumption and a negligible expansion in unemployment. Critically, abstracting from endogenous firm entry and green-technology adoption implies that the same policy has substantial adverse short- and long-term effects on labor income, consumption, and output. Our findings highlight the importance of these margins for a comprehensive assessment of the labor market and aggregate effects of carbon taxes.
    Keywords: Environmental and Fiscal Policy, Carbon Tax, Endogenous Firm Entry, Green Technology Adoption, Search Frictions, Unemployment, Labor Force Participation
    JEL: E20 E24 E62 H23 O33 Q52 Q55
    Date: 2021–05
  22. By: Astrid Martínez Ortiz
    Abstract: Este capítulo examina la agenda de política pública del sector minero-energético de Colombia en la década que recién comienza, dentro del marco de la transición energética mundial.
    Keywords: Energía, Transición Energética, Combustibles Fósiles, Minería, Sector Minero-Energético, Economía Colombiana, Economía de la Energía, Política Energética, COVID-19, Política Pública, Colombia
    JEL: O13 L71 Q40 Q43 Q48 O54
    Date: 2021–04–26
  23. By: Simplice A. Asongu (Yaounde, Cameroon); Joseph Nnanna (The Development Bank of Nigeria, Abuja, Nigeria)
    Abstract: This study assesses how globalization modulates the effect of governance on CO2 emissions in sub-Saharan African countries. The empirical evidence is based on Generalized Method of Moments. The minimum level (or negative threshold) of FDI required for it to interact with political stability and contribute towards the green economy is 45% of GDP, while 90% of GDP is the maximum level (or positive threshold) required for trade to complement “voice & accountability†in mitigating CO2 emissions. 76 % of GDP and 80 % of GDP are respectively negative trade thresholds for government effectiveness and economic governance. The corresponding negative trade thresholds for the rule of law, corruption-control and institutional governance are respectively, 230% of GDP, 63.5% of GDP and 106.5% of GDP. Actionable openness policy thresholds are provided to inform policy makers on how governance interacts with globalization to promote the green economy.
    Keywords: CO2 emissions; Economic development; Africa
    JEL: C52 O38 O40 O55 P37
    Date: 2021–01
  24. By: Miguel Borrero (University of Valencia); Santiago J. Rubio (University of Valencia)
    Abstract: This paper studies how the investment in adaptation can influence the participation in an international environmental agreement (IEA) when countries decide in adaptation before they choose their levels of emissions. Two types of agreements are studied, a complete agreement for which countries coordinate their decisions on adaptation and emissions, and an adaptation agreement for which there is only coordination when countries decide their levels of adaptation. In both cases, we assume that the degree of effectiveness of adaptation is bounded from above, in order words, adaptation can alleviate the environmental problem, but it cannot solve it by itself leading the vulnerability of the country to almost zero. Our results show that the grand coalition could be stable for both types of agreement, but for extremely high degrees of effectiveness of adaptation. If this condition is not satisfied, the model predicts low levels of membership. The standard result of three countries for the complete agreement. For the adaptation agreement participation can be higher than three, but not higher than six countries. In any case, we can conclude that under reasonable values for the degree of effectiveness of adaptation, in our model adaptation does not promote participation in an IEA.
    Keywords: International Environmental Agreements, Adaptation-Mitigation Game, Vulnerability, Effectiveness of Adaptation, Complete Agreement, Adaptation Agreement
    JEL: D62 F53 H41 Q54
    Date: 2021–05
  25. By: Cohen, Adam P; Shaheen, Susan A PhD; Farrar, Emily M
    Abstract: Since the early 20th century, inventors have conceptualized “plane cars” and other urban aerial transportation. Emerging innovations in electrification, automation, and other technologies are enabling new opportunities for on-demand air mobility, business models, and aircraft design. Urban air mobility (UAM) envisions a safe, sustainable, affordable, and accessible air transportation system for passenger mobility, goods delivery, and emergency services within or traversing metropolitan areas. This research employed a multi-method approach comprised of 106 interviews with thought leaders and two stakeholder workshops to construct the history, ecosystem, state of the industry, and potential evolution of UAM. The history, current developments, and anticipated milestones of UAM can be classified into six phases: 1) “flying car” concepts from the early 1910s to 1950s, 2) early UAM operations using scheduled helicopter services from the 1950s to 1980s, 3) re-emergence of on-demand services starting in the 2010s, 4) corridor services using vertical take-off and landing (VTOL) envisioned for the 2020s, 5) hub and spoke services, and 6) point-to-point services. In the future, UAM could face several barriers to growth and mainstreaming, such as the existing regulatory environment; community acceptance; and concerns about safety, noise, social equity, and environmental impacts. UAM also could be limited by infrastructure and airspace management needs, as well as business model constraints. The paper concludes with recommendations for future research on sustainability, social and economic impacts, airspace integration, and other topics.
    Keywords: Engineering, advanced air mobility (AAM), automation, electrification, flying cars, helicopters, on-demand air mobility, rural air mobility, unmanned aircraft systems (UAS), unmanned aerial vehicles (UAVs), unmanned aircraft (UA), urban air mobility (UAM), vertical take-off and land (VTOL)
    Date: 2021–01–01
  26. By: Sharma, Rajesh; Sinha, Avik; Kautish, Pradeep
    Abstract: The consistent performance on the economic front and alarmingly increasing air pollution in the eight emerging economies of South and Southeast Asia compelled us to scrutinize whether the association between per capita income and carbon dioxide (CO2) emissions remained nonlinear during the study period (1990-2015). Further, we intended to examine the long-run impacts of financial development, trade expansion, and nonrenewable energy consumption on CO2 emissions. Considering the possibility of the cross-sectional dependency, we employed a relatively new approach, i.e. the cross-sectional augmented distributed lag mean estimation. The simulation results of the study confirmed an N-shaped environmental Kuznets curve in the selected emerging economies. Further, the improvements in the financial sector, nonrenewable energy consumption, and trade expansion contributed to increasing the level of CO2 emissions in the long run. Based on the outcomes, we proposed the policy framework, which may help in achieving Sustainable Development Goals.
    Keywords: CO2 emissions; financial development; nonrenewable energy resources; South and Southeast Asian countries; CS-DL
    JEL: Q5
    Date: 2021
  27. By: Cheng, Ya; Sinha, Avik; Ghosh, Vinit; Sengupta, Tuhin; Luo, Huawei
    Abstract: Decarbonation has been a primary policy prerogative for Sweden, and carbon tax has been a primary policy instrument in this pursuit, and the revenue generated out of carbon tax has been a driver for energy innovation. However, the benefits of energy innovation have not been experienced across various sectors in Swedish economy, and it might be anticipated that the potential aim of achieving carbon neutrality might not be accomplished to the fullest. Hence, being faced with the need of policy realignment for Sweden, this study has made an attempt to discover the dynamics between carbon tax revenue and energy innovation over a period of 1990-2019, following Quantile-on-Quantile Regression framework. The results obtained from the study show that the impact of carbon tax revenue on energy innovation might turn out to be ineffective beyond a certain threshold limit. A similar pattern has also been observed for the impact of energy innovation on carbon tax revenue. This study gives an indication that there might be a non-linear association between both these model parameters. The study outcomes have paved a way to design a policy framework for helping Swedish economy to attain the objectives of Sustainable Development Goals, while paving the ways to achieve carbon neutrality.
    Keywords: Carbon neutrality; Carbon tax; Energy innovation; Sustainable Development Goals; Sweden
    JEL: Q5
    Date: 2021
  28. By: Antonin Pottier (EHESS - CIRED); Emmanuel Combet (ADEME); Jean-Michel Cayla (EDF); Simona de Lauretis (EDF – CIRED); Franck Nadaud (CNRS - CIRED)
    Abstract: This article provides a panorama of greenhouse gas (GHG) emission inequalities between French households. It presents in a detailed and critical manner the methodological conventions that are used to compute “household emissions†, including the related assumptions. The most common responsibility principle, the “consumer responsibility†, assigns to households the emissions of the products that they consume, resulting in the carbon footprint. It focuses attention on the contributions of individuals, on their choices, and it may obscure the role of non-individual actors and also the collective component of GHG emissions, and it neglects the dimensions of responsibility that are not related to consumption choices. We estimate the distribution of household carbon footprints based on data from the 2011 French Household Budget Survey. Household emissions tend to increase with income, but they also show a strong variability linked to geographical and technical factors that force the consumer to use fossil fuels. Based on sectoral surveys (ENTD 2008; PHEBUS 2013), we also reconstruct household CO2 emissions linked to housing and transport energy. For transport, emissions are proportional to the distance travelled due to the predominant use of private cars. Urban settlement patterns constrain both the length of daily commuting and access to less carbon-intensive modes of transport. For housing, while the size of the dwelling increases with income and distance from urban centres, the first factor to account for variability of emissions is the heating system: this has little to do with income but more to do with settlement patterns, which constrain access to the various energy carriers. Finally, we discuss the difficulties, both technical and conceptual, that are involved in estimating emissions from the super-rich (the top 1 percent).
    Keywords: Greenhouse Gas Emissions, Carbon Footprint, Emissions Inequality, Household Expenditure Distribution, Responsibility
    JEL: D12 D30 Q56 R20
    Date: 2021–05
  29. By: Torsten Ehlers; Frank Packer; Kathrin de Greiff
    Abstract: Do banks price the risks of climate policy change? Combining syndicated loan data with carbon intensity data (CO2 emissions relative to revenue) of borrowers across a wide range of industries, we find a significant "carbon premium" since the Paris Agreement. The loan risk premium related to CO2 emission intensity is apparent across industries and broader than that due simply to "stranded assets" in fossil fuel or other carbon-intensive industries. The price of risk, however, appears to be relatively low given the material risks faced by borrowers. Only carbon emissions directly caused by the firm (scope 1) are priced, and not the overall carbon footprint including indirect emissions. "Green" banks do not appear to price carbon risk differently from other banks.
    Keywords: environmental policy, climate policy risk, transition risk, loan pricing
    JEL: G2 Q01 Q5
    Date: 2021–06
  30. By: Chien, Fengsheng; Anwar, Ahsan; Hsu, Ching-Chi; Sharif, Arshian; Razzaq, Asif; Sinha, Avik
    Abstract: Sustainability through information and communication technologies is a complex matter, raising interesting debate among researchers. Pursuing the same, this research investigates the impact of information and communication technologies, economic growth, and financial development on carbon dioxide emissions by simultaneously testing the Environmental Kuznets curve (EKC) hypothesis in BRICS countries. In doing so, this study employs Methods of Moments - Quantile Regression, which confirms that the effects of the explanatory variables vary across different quantiles of carbon dioxide emissions. The overall results indicate that economic growth and financial development contribute to carbon dioxide emissions across all quantiles, while information and communication technologies significantly mitigate the level of carbon dioxide emissions only at lower emissions quantiles. Moreover, the results confirm the presence of the EKC hypothesis. Interestingly, the effect of economic growth and information and communication technologies on carbon dioxide emissions is lowest in magnitude at lower quantiles and highest at higher quantiles of carbon dioxide emissions. The empirical findings of DH panel heterogenous causality test confirm bidirectional causality between the model parameters, indicating that any policy intervention concerning explanatory variables significantly causes carbon dioxide emissions and vice versa. The results set out the foundation for policymakers to devise a policy framework to attain the objectives of Sustainable Development Goals (SDGs).
    Keywords: ICT; Financial development; EKC hypothesis; CO2 emissions; BRICS; MMQR
    JEL: Q5
    Date: 2021
  31. By: Sharma, Rajesh; Sinha, Avik; Kautish, Pradeep
    Abstract: In the preceding two decades, the expansion of financial services has played a vital role in pursuing economic growth agendas in the developing Asian nations. However, its harmful effect on environmental quality cannot be denied. In this backdrop, in the present study, we investigated whether the financial sector development moderated the ecological footprint, carbon footprint, and land footprint in the eight developing nations of South and Southeast Asia from 1990-2015. In doing so, we included the per capita income, energy solutions, and trade expansions as determinants of the ecological indicators. The results of the second-generation unit root tests and Westerlund’s cointegration test reported the long-run stability and cointegration, respectively. To navigate the possible cross-country dependency, we employed the cross-sectional augmented autoregressive distributed lag approach (CS-ARDL). The results confirmed that per capita income, energy solutions, trade expansion, and financial sector development invigorated the ecological footprint, carbon footprint, and land footprint in the long run. Further, it is reported that the development in the financial sector has a significant moderating impact on the nexus between energy and environmental footprints. In other words, the financial sector development drove the association between the overall environmental quality and energy solutions in the long run. Similarly, we observed that the financial sector development worked as a significant mediator between environmental proxies and trade expansion. By including the ecological footprint, carbon footprint, and land footprint as environmental proxies, the study provides the wider environmental spectrum. Based on the outcomes of the study, we proposed a novel scheme, which may help to address the harmful environmental impacts of the financial sector development in the selected developing nations.
    Keywords: Ecological footprint; carbon footprint; land footprint, South Asian countries; Southeast Asian countries; per capita income; energy
    JEL: Q5
    Date: 2021
  32. By: Pillai, Arya; Tovar Reaños, Miguel; Curtis, John
    Date: 2021
  33. By: Andor, Mark; Gerster, Andreas; Goette, Lorenz
    Abstract: Novel information technologies hold the promise to improve decision making. In the context of smart metering, we investigate the impact of providing households with appliance-level electricity feedback. In a randomized controlled trial, we find that the provision of appliance-level feedback creates a conservation effect of an additional 5% relative to a group receiving standard (aggregate) feedback. These conservation effects are largely driven by reductions in electricity use of 10% to 15% during peak hours. Consumers with appliance-level feedback hold more accurate beliefs about the energy consumption of different appliances, consistent with the mechanism in our accompanying model. Our result suggests that conservation effects from a smart-meter rollout will be much larger if appliance-level feedback can be provided. Based on a sufficient statistics approach, we estimate that appliance-level feedback could raise consumer surplus by about 570 to 600 million Euro per annum for German households.
    Keywords: consumption feedback; Disaggregation; energy conser- vation; randomized controlled trial
    JEL: D12 D83 L94 Q41
    Date: 2020–06
  34. By: Richard Jaimes
    Abstract: This paper develops a climate–economy model to study the joint design of optimal climate and fiscal policies in economies with overlapping generations. I demonstrate how capital taxation, if optimal, drives a wedge between the market costs of carbon (the net present value of marginal damages using the market interest rate) and the Pigouvian tax (the net present value of marginal damages using the consumption discount rate of successive overlapping generations). In contrast to deterministic infinitely-lived representative agent models, at the optimum, the capital income tax is positive, the carbon price equals the market costs of carbon but it falls short of the Pigouvian tax when (i) preferences are not separable over consumption and leisure; and (ii) labor income taxes cannot be age-dependent. I also show that restrictions on climate change policy provide a novel rationale for positive capital income taxes.
    Keywords: Climate change, Environmental policies, Externalities, Fiscal policy, Optimaltaxation.
    JEL: E62 H21 H23 Q58
    Date: 2021–06–04
  35. By: Anwar, Ahsan; Sharif, Arshian; Fatima, Saba; Ahmad, Paiman; Sinha, Avik; Khan, Syed Abdul Rehman; Jermsittiparsert, Kittisak
    Abstract: Transportation infrastructure is a pillar of economic development as well as a main contributor to climate change. Therefore, it is necessary to transform the transport sector investment into climate-resilient, low-carbon transportation choices in order to achieve sustainable transportation infrastructure. In case of China, this transformation might be necessary from the perspective of the “New-style Urbanization” strategy, and for fulfilling this strategy, policy realignment is required. To address this policy-level void in the literature, we explore the influence of public private partnerships investment in transport sector, renewable energy consumption, urbanization on transport-induced carbon emissions in China. For this purpose, we apply Quantile Autoregressive Distributed Lagged (QARDL) method during 1990Q1-2018Q4. Based on the results of the study, a multipronged sustainable development goal (SDG) framework has been suggested, under which SDG 11, SDG 13, and SDG 8 are addressed, while using SDG 17 as a vehicle.
    Keywords: Public Private partnership investment in transport, Transport CO2 emissions, Urbanization, Renewable energy consumption, Quantile ARDL
    JEL: Q5
    Date: 2021
  36. By: Ambre Maucorps (The Vienna Institute for International Economic Studies, wiiw); Roman Römisch (The Vienna Institute for International Economic Studies, wiiw); Roman Stöllinger (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Chart of the month Economic growth and carbon emissions in CESEE countries by Ambre Maucorps Opinion Corner Is a carbon border tax a good idea? by Roman Stöllinger This contribution argues that a carbon border tax is a promising tool to achieve the goals of the European Green Deal. Its implementation would enable the EU to earn a ‘triple dividend’ consisting of support for its ecological transformation, the mitigation of carbon leakage, and the provision of significant new funds for the EU budget. Are we tired of cohesion? by Roman Römisch Smaller EU transfers and low investment rates are dampening growth expectations in the EU’s less developed regions. As a consequence, we might soon see the end of the 20-year-long convergence process. The European Green Deal and agriculture are EU regional farming systems ready for the green transition? by Ambre Maucorps The European Green Deal calls on the farming sector to become more carbon efficient and environmentally friendly. Even though the majority of EU countries have reduced their greenhouse gas emissions from agriculture over the past three decades, only a few regions have a proper sustainability-oriented agriculture. The green transition is expected to be particularly problematic for the farming systems of Eastern European regions. Monthly and quarterly statistics for Central, East and Southeast Europe
    Keywords: economic growth, carbon emissions, EU emissions trading system, carbon leakage, carbon border tax, EU cohesion policy, investment rates, economic convergence, European Green Deal, regional farming systems, Farm to Fork Strategy
    Date: 2020–12
  37. By: Vincent Giorgis (ETH Zürich); Tobias Huber (ETH Zürich); Didier Sornette (ETH Zürich - Department of Management, Technology, and Economics (D-MTEC); Swiss Finance Institute; Southern University of Science and Technology; Tokyo Institute of Technology)
    Abstract: From 2004 to 2008, a bubble formed in clean technologies, such as solar, biofuels, batteries, and other renewable energy sources. In this paper, we analyze this clean-tech bubble through the lens of the Social Bubble Hypothesis, which holds that strong social interactions between enthusiastic supporters weave a network of reinforcing feedbacks that lead to widespread endorsement and extraordinary commitment by those involved. We present a detailed synthesis of the development of the clean-tech bubble, its history, and the role of venture capital and government funding in catalyzing it. In particular, we dissect the underlying narrative that was fueling the bubble. As bubbles can be essential in the process of accelerating the development of emerging technologies and diffusion of technological innovations, we present evidence that the clean-tech bubble constituted an example of an innovation-accelerating process.
    Keywords: Financial Bubbles, Narrative Economics, Technological Innovation, Clean Tech, Energy, Venture Capital
    JEL: C54 D61 D70 F64 G01 O25
    Date: 2021–05
  38. By: Chimere O. Iheonu (Abuja, Nigeria); Ogochukwu C. Anyanwu (Nsukka, Nigeria); Obinna K. Odo (Nsukka, Nigeria); Solomon Prince Nathaniel (University of Lagos, Akoka, Nigeria.)
    Abstract: International trade and urbanization are increasing at an unprecedented rate in sub-Saharan Africa (SSA). The region has also witnessed a fair share of economic growth, with minimal investment and consumption of renewables. Therefore, this study investigates the influence of economic growth, international trade, and urbanization on CO2 emissions in SSA. The current study enriches the existing literature by employing the panel quantile regression analysis to account for existing levels of CO2 emissions in the region. Empirical findings reveal that GDP increases CO2 emissions across quantiles, especially in countries where the existing level of CO2 emissions is low. International trade improves environmental sustainability in countries where the existing levels of CO2 emissions are at their lowest and highest levels but exacts a reversed impact on CO2 emissions at the median. Further findings suggest that urbanization increases CO2 emissions across the observed quantiles with a more pronounced effect in countries where the existing levels of CO2 emissions are at its lowest level. The study also reveals a bi-directional causality between economic growth, international trade, urbanization, and the emissions of CO2. The limitations of the study and possible direction for future research have been highlighted. Policy directions are discussed.
    Keywords: Economic Growth, International Trade, Urbanization, CO2 Emission, sub-Saharan Africa, Quantile Regression
    Date: 2021–01
  39. By: Gilje, Erik P. (U of Pennsylvania); Wittry, Michael D. (Ohio State U)
    Abstract: We study how ownership structure, in particular public listing status, affects workplace safety and productivity tradeoffs. Theory offers competing hypotheses on how listing-related frictions affect these tradeoffs. We exploit detailed asset-level data in the U.S. coal industry and find that workplace safety deteriorates dramatically under public firm ownership, primarily in mines that experience the largest productivity increases. We find evidence consistent with information asymmetry between managers and share-holders of public firms, and ties of private firm ownership with local communities being first-order drivers of workplace safety and productivity tradeoffs.
    JEL: G30 G32 G34 J24 J38
    Date: 2021–04
  40. By: Berner, Anne; Bruns, Stephan B.; Moneta, Alessio; Stern, David I.
    Abstract: Improving energy efficiency is often considered to be one of the keys to reducing greenhouse gas emissions. However, efficiency gains also reduce the cost of energy services and may even reduce the price of energy, resulting in energy use rebounding and potential energy use savings being eaten up. There is only limited empirical research quantifying the economy-wide rebound effect that takes the dynamic economic responses to energy efficiency improvements into account. We use a Structural Factor-Augmented Vector Autoregressive model (S-FAVAR) that allows us to track how energy use changes in response to an energy efficiency improvement while accounting for a vast range of potential confounders. Our findings point to economy-wide rebound effects of 78% to 101% after two years in France, Germany, Italy, the U.K., and the U.S. These findings imply that energy efficiency innovations alone may be of limited help in reducing future energy use and emphasize the importance of tackling carbon emissions directly.
    Keywords: Energy efficiency,economy-wide rebound effect,climate change,climate policy,Structural FAVAR,Independent Component Analysis
    Date: 2021
  41. By: Renaud Coulomb (University of Melbourne); Fanny Henriet (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Léo Reitzmann (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: Not all barrels of oil are created equal: their extraction varies in both private cost and carbon intensity. Using a rich micro-dataset on World oil fields and estimates of their carbon intensities and private extraction costs, this paper quantifies the additional emissions and costs from having extracted the 'wrong' deposits. We do so by comparing historic deposit-level supplies to counterfactuals that factor in pollution costs, while keeping annual global consumption unchanged. Between 1992 and 2018, carbon misallocation amounted to at least 10.02 GtCO2 with an environmental cost evaluated at 2 trillion US dollars (2018). This translates into a significant supply-side ecological debt for major producers of dirty oil. Looking towards the future, we estimate the gains from making deposit-level extraction socially-optimal, and document the very unequal distribution of the subsequent stranded oil reserves across countries.
    Keywords: climate change,oil,carbon mitigation,misallocation,stranded assets
    Date: 2021–06
  42. By: Vanessa Angst (Infras AG); Chiara Colesanti Senni (Council on Economic Policies); Markus Maibach (Infras AG); Martin Peter (Infras AG); Noe Reidt (CER–ETH – Center of Economic Research at ETH Zurich, Switzerland); Renger van Nieuwkoop (Modelworks)
    Abstract: Switzerland committed to achieving net-zero emissions in 2050. This goal is particularly ambitious for the Swiss passenger transport system, which emits more than one third of Swiss CO2 emissions, and is not yet on a clear emission reduction path. We investigate the economic impact and the emission-saving potential of a decarbonization pathway for the Swiss transport sector based on three edge case scenarios and on a combination of them: (1) improved fuel/engine technology and fostered diffusion of battery electric vehicle, (2) increased capacity use of passenger cars, and (3) enhanced modal shift towards public transport. Our analysis is conducted using a multi-model framework, which interlinks a computational general equilibrium model with two external transportation models. This approach allows us to incorporate a highly disaggregated passenger transport system into the economic analysis. The framework is calibrated to Swiss data to assess the optimal scenario mix in terms of emissions and economic impact. The optimal decarbonization pathway mix slightly increases welfare and lowers CO2 emissions of passenger transport in 2050 from 6 to 1.7 million tons CO2 compared to the reference scenario. Despite the sharp reduction in emissions, a decarbonization pathway based on the considered scenarios is insufficient to reach the net-zero emission target.
    Keywords: Passenger transport, Decarbonization, Switzerland, Computable general equilibrium model
    JEL: C68 R40 R42 R48
    Date: 2021–05
  43. By: Zivin, Joshua Graff (University of California, San Diego); Neidell, Matthew (Columbia University); Sanders, Nicholas (Cornell University); Singer, Gregor (London School of Economics)
    Abstract: Influenza and air pollution each pose significant public health risks with large global economic consequences. The common pathways through which each harms health presents an interesting case of compounding risk via interacting externalities. Using instrumental variables based on changing wind directions, we show increased levels of contemporaneous pollution significantly increase influenza hospitalizations. We exploit random variations in the effectiveness of the influenza vaccine as an additional instrument to show vaccine protection neutralizes this relationship. This suggests seemingly disparate policy actions of pollution control and vaccination campaigns jointly provide greater returns than those implied by addressing either in isolation.
    Keywords: air pollution, influenza, hospitalizations, vaccines, externalities
    JEL: Q53 I12 I11
    Date: 2021–05
  44. By: Cloete, Schalk; Ruhnau, Oliver; Cloete, Jan Hendrik; Hirth, Lion
    Abstract: Is there a place for today’s fossil fuel exporters in a low-carbon future? This study explores trade channels between energy exporters and importers using a novel electricity-hydrogen-steel energy systems model calibrated to Norway, a major natural gas producer, and Germany, a major energy consumer. Under tight emission constraints, Norway can supply Germany with electricity, (blue) hydrogen, or natural gas with re-import of captured CO2. Alternatively, it can use hydrogen to produce steel through direct reduction and supply it to the world market, an export route not available to other energy carriers due to high transport costs. Although results show that natural gas imports with CO2 capture in Germany is the least-cost solution, avoiding local CO2 handling via imports of blue hydrogen (direct or embodied in steel) involves only moderately higher costs. A robust hydrogen demand would allow Norway to profitably export all its natural gas production as blue hydrogen. However, diversification into local steel production, as one example of easy-to-export industrial base products, offers an effective hedge against the possibility of lower European blue hydrogen demand. Thus, it is recommended that hydrocarbon exporters like Norway consider a strategic energy export transition to a diversified mix of blue hydrogen and climate-neutral industrial base products.
    Keywords: Hydrogen economy,Energy-intensive industry,Decarbonization,CO2 capture and storage,Variable renewable energy
    JEL: Q4
    Date: 2021
  45. By: Maryam Ahmadi (Fondazione Eni Enrico Mattei); Matteo Manera (University of Milan-Bicocca, Fondazione Eni Enrico Mattei)
    Abstract: The aim of this paper is to investigate how major net oil exporter economies react to oil price shocks. We contribute to the literature by considering, at the same time, the possible nonlinearity and asymmetry of this relationship with respect to sign, size and causes of the oil price shocks, as well as the state of the economy in which the shocks occur. We apply a Threshold Structural VAR approach, characterized by a separation of the observations into different regimes based on a threshold variable, to model time series non-linearities. We use the economic activity as the threshold variable, as it divides economic development in two regimes under which we expect the effects of oil price shocks to differ. First, We find that the effects of oil price shocks on oil exporting economies greatly depend on the underlying cause of the shocks as well as the state of the economy. Second, we find little evidence of asymmetric response of output to the sign of oil price shocks. Our main findings warn decision makers in the area of macroeconomic planning that, when making decisions based on the oil price, the underlying causes of its variations as well as the state of the economy in which the oil price shocks occur have to be considered.
    Keywords: Oil Market, Output Growth, Macroeconomic Policy, Threshold SVAR
    JEL: C3 G11 Q41 Q43
    Date: 2021–05
  46. By: Kristina Govorukha; Philip Mayer; Dirk Rübbelke
    Abstract: In order to achieve the commonly agreed emission reduction target, the European Commission developed binding national targets for each member state until 2030 and called upon the member states to submit National Energy and Climate Plans to ensure increased transparency for the respective national targets and strategies. An analysis of these plans shows that some of the emission reductions set at the national level prescribe a more ambitious decarbonisation than the EU-wide limits. However, since a transformation to a climate-friendly system requires considerable investment, the question arises as to why some states apparently want to be in the vanguard. We find that countries may have an incentive to outperform other states in the development of a low-carbon electricity system in order to pass on part of the transformation costs to neighbouring countries.
    Keywords: electricity, utilities, thermal generation, unilateral action, climate policy
    JEL: C60 Q40
    Date: 2021
  47. By: Böhm, Jens; Peterson, Sonja
    Abstract: Different reports including the broadly cited OECD fossil fuel subsidy inventory arrive at high monetary values of fossil fuel subsidies and suggest that phasing out these subsidies has a high potential to increase the efficiency of climate policies. We show that the inventory approach gives misleading information about this potential since there is little correlation with net carbon prices that actually reflect the stringency of climate policies. We use data on net fossil fuel taxation from the OECD's Taxing Energy Use report and augment it with data on subsidies and emission permits, to calculate national and sectoral net carbon prices for the top six emitters (China, US, India, Russia, Japan and Germany) and for Poland and Sweden, two European countries perceived as examples of opposing environmental policies. Our results show that in high-income countries, subsidies mainly relate to reduced fuel tax rates for certain uses, so that e.g. Sweden, for which the OECD inventory reports subsidies per ton of CO2 26 times higher than the US, has a 770% higher national net carbon price than the US. While Germany and Russia have similar subsidy levels in the OECD inventory, the national net carbon price in Germany is 50 €/tCO2, while producer subsidies lead to a negative net carbon price of -6€/tCO2 in Russia. Our results illustrate that raising taxes on fossil fuels will often lead to higher reported inventory subsidies. Inventory measures thus give little information about the efficiency of climate policy. Our analysis also shows the large differences in net carbon prices across countries and across sectors within countries. Net carbon prices should replace fossil fuel subsidies in the policy debates and become the basis for national energy tax reforms and international agreements on minimum carbon prices.
    Keywords: fossil fuel subsidies,carbon pricing,energy taxation,climate policy
    JEL: H2 Q48 Q54
    Date: 2021
  48. By: Nicolas Astier; Ram Rajagopal; Frank A. Wolak
    Abstract: This paper estimates the relationship between investments in five distributed generation technologies and hourly net injections to the distribution grid for over 2,000 substations in France between 2005 and 2018. We find that investments in distributed wind and solar capacity have little or no impact on the annual peak of hourly net injections to the distribution grid, while investments in hydroelectric and thermal distributed generation significantly reduce it. An optimistic analysis of battery storage suggests that high levels of investments are required for distributed wind and solar investments to deliver similar reductions in the annual peak of hourly net injections.
    JEL: Q2 Q4 Q5
    Date: 2021–05
  49. By: Simplice A. Asongu (Yaounde, Cameroon); Rexon T. Nting (University of Wales, London, UK)
    Abstract: In this study, we assess how the mobile phone can be leveraged upon to improve the role of governance in environmental sustainability in 44 Sub-Saharan African countries. The Generalised Method of Moments is used to establish policy thresholds. A threshold is a critical mass or level of mobile phone penetration at which the net effect of governance on Carbon dioxide (CO2) emissions changes from positive to negative. Mobile phone penetration thresholds associated with negative conditional effects are: 36 (per 100 people) for political stability/no violence; 130 (per 100 people) for regulation quality; 146.66 (per 100 people) for government effectiveness; 65 (per 100 people) for corruption-control and 130 (per 100 people) for the rule of law. Practical and theoretical implications are discussed. The study provides thresholds of mobile phone penetration that are critical in complementing governance dynamics to reduce CO2 emissions.
    Keywords: CO2 emissions; ICT; Economic development; Africa
    JEL: C52 O38 O40 O55 P37
    Date: 2021–01
  50. By: Edakunny, Preeti
    Abstract: India accounts for 17 per cent of world palm oil consumption. Palm oil was initially considered a potential nutrition and environment solution that would replace fossil fuel and trans-fats in the nutrition chain. That promise of replacing fossil fuels and trans-fats is far from met; palm tree monoculture has led to devastation of rainforests in Indonesia and Malaysia, which together account for 85 of global palm oil production. Symmetrical rows of palm trees have replaced once-dense irreplaceable habitats of trees and plants. The initial deforestation was induced by European innovation and consumption. India and China have now outstripped European buyers as the main buyers of palm oil. The global cropscape of the palm is reviewed in this paper in the Indian context. Policy appears to encourage palm oil imports in the face of India’s dire agricultural landscape, with negative returns for farmers, a growing nutritionally bereft food chain and exponential deforestation of tropical forests in Indonesia and Malaysia. The paper explores the inherently economically and the socially destructive substitution of ethnically produced and consumed seed oils such as mustard, sesame and coconut. Small farm holdings comprise nearly 85 per cent of India’s total cultivated area. This paper studies the global supply chain of the palm seed oil that potentially has multi-pronged externalities of destruction of farm income in the importing nation, disruption of nutrition needs and augmenting global emissions through deforestation .
    Date: 2019–12–09
  51. By: Winkler, Malte; Peterson, Sonja; Thube, Sneha
    Abstract: Linking the EU and Chinese Emission Trading Systems (ETS) increases the cost-efficiency of reaching greenhouse gas mitigation targets, but both partners will benefit - if at all - to different degrees. Using the global computable-general equilibrium (CGE) model DART Kiel, we evaluate the effects of linking ETS in combination with 1) restricted allowances trading, 2) adjusted allowance endowments to compensate China, and 3) altered Armington elasticities when Nationally Determined Contribution (NDC) targets are met. We find that generally, both partners benefit from linking their respective trading systems. Yet, while the EU prefers full linking, China favors restricted allowance trading. Transfer payments through adjusted allowance endowments cannot sufficiently compensate China so as to make full linking as attractive as restricted trading. Gains associated with linking increase with higher Armington elasticities for China, but decrease for the EU. Overall, the EU and China favor differing options of linking ETS. Moreover, heterogeneous impacts across EU countries could cause dissent among EU regions, potentially increasing the difficulty of finding a linking solution favorable for all trading partners.
    Keywords: Paris Agreement,NDC,Emission Trading,Linking ETS,China,EU,Verbindung von Emissionshandelsystemen,NDC,Pariser Klimabakommen,Emissionshandel
    JEL: F13 F18 Q58 Q54
    Date: 2021
  52. By: Stephen Jarvis
    Abstract: Large infrastructure projects can create widespread societal bene ts, but also fre- quently prompt strong local opposition. This is sometimes pejoratively labeled NIMBY (Not In My Backyard) behavior. In this paper I estimate the economic costs of NIMBYism and its role in local planning decisions. To do this I use de- tailed data on all major renewable energy projects proposed in the United Kingdom spanning three decades. First, I use hedonic methods to show that wind projects impose signi cant negative local costs, while solar projects do not. I then show that planning ocials are particularly responsive to the local costs imposed within their jurisdictions, but fail to account for variation in these costs across jurisdic- tions. The result has been a systematic misallocation of investment, which may have increased the cost of deploying wind power by 10-29%. Much of this can be attributed to the fragmented and localized nature of the planning process.
    Keywords: Infrastructure, Electricity, Renewables, NIMBY, Local, Planning
    JEL: Q42 Q51 Q53 R30
    Date: 2021–06
  53. By: Sosson Tadadjeu (University of Dschang , Cameroon); Henri Njangang (University of Dschang , Cameroon); Simplice A. Asongu (Yaoundé, Cameroon); Yann Nounamo (University of Douala, Douala, Cameroon)
    Abstract: This study investigates the impact of natural resources on wealth inequality as a first attempt on a panel of 45 developed and developing countries over the period 2000-2014. Using the Generalized Method of Moments, the results provide stong evidence that natural resources increase wealth inequality within a linear empirical framework. These results are robust to the use of alternative natural resources and wealth inequality measures. Additionnaly, a nonlinear analysis provides evidence of an inverted U shaped relationship between natural resources and wealth inequality. The net effect of enhancing natural resources on wealth inequality is positive and building on the corresponding conditional negative effect, the attendant natural resource thresholds for inclusive development are provided. It follows that while natural resources increase wealth inequality, some critical levels of natural resources are needed for natural resources to reduce wealth inequality.
    Keywords: Oil wealth; Natural resources; Wealth inequality; Sustainable development
    JEL: F21 F54 L71
    Date: 2021–01
  54. By: Massimo Filippini (CER–ETH – Center of Economic Research at ETH Zurich and Università della Svizzera italiana, Switzerland); Nilkanth Kumar (CER–ETH – Center of Economic Research at ETH Zurich, Switzerland); Suchita Srinivasan (CER–ETH – Center of Economic Research at ETH Zurich, Switzerland)
    Abstract: Air pollution is a grave problem in urban areas of developing countries, with the transport sector being one of the largest contributors to emissions. A possibility to reduce carbon dioxide emissions would be for individuals to switch to more fuel-efficient vehicles. However, a gamut of behavioral anomalies and market failures have been known to inhibit individuals from investing in fuel-efficiency (due to the well-known ‘energy-efficiency gap’). In this study, we use novel data from Kathmandu, Nepal to understand the socio-economic and psychological determinants of three behavioral anomalies, namely present bias, loss aversion, risk aversion, as well as time preferences. In a second step, we evaluate the effect of these anomalies on the energy-efficiency gap in the choice of motorcycles of individuals. We find that present-biased individuals are less likely to invest in fuel-efficient motorcycles, and thus more likely to buy motorcycles having relatively high total lifetime costs. We also find that other factors such as income, as well as having applied for loans, play an important role in determining these choices. Our results suggest that behavioral anomalies may indeed pose as a hindrance to individuals making cost-minimizing (and also environmentally sound) investment decisions.
    Keywords: Behavioral anomalies, Present bias, Fuel efficiency, Energy-efficiency gap, Motorcycles, Nepal
    JEL: D1 D8 Q4 Q5
    Date: 2021–05

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