nep-ene New Economics Papers
on Energy Economics
Issue of 2021‒08‒16
fifty papers chosen by
Roger Fouquet
London School of Economics

  1. The Economics of Electric Vehicles By David S. Rapson; Erich Muehlegger
  2. Across Early Policy and Market Contexts Women and Men Show Similar Interest in Electric Vehicles By Kurani, Kenneth; Buch, Koral
  3. Bike-Share in the Sacramento Region Primarily Substitutes for Car and Walking Trips and Reduces Vehicle Miles Traveled By Fukushige, Tatsuya; Fitch, Dillon; Handy, Susan
  4. Greening the vehicle fleet, how does South Africa’s tax reforms affect new car sales By Nkosi, Mfundo; Dikgang, Johane; Kutela Gelo, Dambala; Pholo, Alain
  5. How Dock-less Electric Bike Share Influences Travel Behavior, Attitudes, Health, and Equity: Phase II By Fukushige, Tatsuya; Fitch, Dillon PhD; Handy, Susan
  6. Strengthening Gender Justice in a Just Transition: A Research Agenda Based on a Systematic Map of Gender in Coal Transitions By Paula Walk; Isabell Braunger; Josephine Semb; Carolin Brodtmann; Pao-Yu Oei; Claudia Kemfert
  7. An Economic Analysis of the Appalachian Coal Industry Ecosystem: County-level PIE Supply Chain Analysis By Randall Jackson; Péter Járosi
  8. Economics of co-firing rice straw in coal power plants in Vietnam By an Ha Truong; Minh Ha-Duong
  9. What Drives Saudi Airstrikes in Yemen? An Empirical Analysis of the Dynamics of Coalition Airstrikes, Houthi Attacks, and the Oil Market By Dawud Ansari; Mariza Montes de Oca Leon; Helen Schlüter
  10. Governance in mitigating the effect of oil wealth on wealth inequality: a cross-country analysis of policy thresholds By Henri Njangang; Simplice A. Asongu; Sosson Tadadjeu; Yann Nounamo; Brice Kamguia
  11. Connectedness between the Crude Oil Futures and Equity Markets during the Pre- and Post-Financialisation Eras By Sania Wadud; Robert D. Durand; Marc Gronwald
  12. On Modelling of Crude Oil Futures in a Bivariate State-Space Framework By Peilun He; Karol Binkowski; Nino Kordzakhia; Pavel Shevchenko
  13. The Natural Resource Boom and The Uneven Fall of The Labor Share By Andrés O. Dávila; Manuel Fernández; Hernando Zuleta
  14. Racial disparities in the health effects from air pollution: Evidence from ports By Gillingham, Kenneth; Huang, Pei
  15. Congestion pricing, air pollution, and individual-level behavioural responses By Isaksen, Elisabeth; Johansen, Bjørn G.
  16. Energía renovable y competitividad en la empresa Walmart México By Jairo Abdala Martínez Henao
  17. Getting Warmer: Fuel Poverty, Objective and Subjective Health and Well-Being By Davillas, Apostolos; Burlinson, Andrew; Liu, Hui-Hsuan
  18. Simultaneous optimization of transformer tap changer and network capacitors to improve the distribution system’s static security considering distributed generation sources By Mortazi, Mohammad; Moradi, Ahmad; Khosravi, Mohsen
  19. Cyber security management of critical energy infrastructure in national cybersecurity strategies: cases of USA, UK, France, Estonia and Lithuania By Manuela Tvaronavičienė; Tomas Plėta; Silvia Casa; Juozas Latvys
  20. Effect of Gas Subsidies In Indonesia By Mark Horridge; Elizabeth L. Roos
  21. The impact of climate legislation on trade-related carbon emissions, 1997–2017 By Eskander, Shaikh; Fankhauser, Samuel
  22. Greening Monetary Policy: Evidence from the People's Bank of China By Macaire Camille,; Naef Alain.
  23. Supporting residential energy conservation under constrained public budget: Cost-effectiveness and redistribution analysis of public financial schemes in France By Chlond, Bettina; Gavard, Claire; Jeuck, Lisa
  24. The vision of France, Germany, and the European Union on future hydrogen energy research and innovation By Fermin Cuevas; Junxian Zhang; Michel Latroche
  25. The effect of a carbon tax on per capita carbon dioxide emissions: evidence from Finland By Elbaum Jean-David
  26. Social discounting and the equity premium By Spackman, Michael
  27. Who Uses Green Mobility? Exploring Profiles in Developed Countries By Echeverría, Lucía; Gimenez-Nadal, J. Ignacio; Molina, José Alberto
  28. Automated Identification of Climate Risk Disclosures in Annual Corporate Reports By David Friederich; Lynn H. Kaack; Alexandra Luccioni; Bjarne Steffen
  29. Pricing carbon in a multi-sector economy with social discounting By Kalsbach, Oliver; Rausch, Sebastian
  30. Economic Analysis of the Electricity Mix of Iraq Using Portfolio Optimization Approach By Hashim Almusawi; Arash Farnoosh
  31. Climate institutions in Brazil: three decades of building and dismantling climate capacity By Hochstetler, Kathryn
  32. Storage requirements in a 100% renewable electricity system: Extreme events and inter-annual variability By Ruhnau, Oliver; Qvist, Staffan
  33. Out of the window? Green monetary policy in China: window guidance and the promotion of sustainable lending and investment By Dikau, Simon; Volz, Ulrich
  34. Do Retail Investors Value Environmental Impact? A Lab-in-the-Field Experiment with Crowdfunders By Christoph Siemroth; Lars Hornuf
  35. Pricing reforms in natural gas sector of India: A Computable general equilibrium analysis By Nitin Harak; A. Ganesh Kumar
  36. Environmental Justice By Julia M. Puaschunder
  37. Energy Poverty and Entrepreneurship By Cheng, Zhiming; Tani, Massimiliano; Wang, Haining
  38. Climate policy and wealth distribution By Nguyen Thang Dao
  39. Regional Carbon Markets in China: Cointegration and Heterogeneity By Lyu, Chenyan
  40. Institutionalising decarbonisation in South Africa: navigating climate mitigation and socio-economic transformation By Tyler, Emily; Hochstetler, Kathryn
  41. Holding Up Green Energy By Nicholas Ryan
  42. Examining the temporal impact of stock market development on carbon intensity: Evidence from South Asian countries By Sharma, Rajesh; Shahbaz, Muhammad; Sinha, Avik; Vo, Xuan Vinh
  43. Is information a good policy instrument to influence the energy behaviour of households? By Caroline Orset
  44. Why Are Pollution Damages Lower in Developed Countries? Insights from High-Income, High-Particulate Matter Hong Kong By Jonathan Colmer; Dajun Lin; Siying Liu; Jay Shimshack
  45. Pricing Climate Risk By Svenn Jensen; Christian P. Traeger; Christian Träger
  46. Public investments in COVID-19 green recovery packages: A comparative analysis of scale, scope, and implementation in France, Germany, and the United Kingdom By Frank Geels; Guillermo Ivan Pereira; Jonatan Pinkse
  47. The Effect of Changing Marginal-Cost to Physical-Order Dispatch in the Power Sector By Raúl Gutiérrez-Meave; Juan Rosellón; Luis Sarmiento
  48. Designing Instrument Packages for the Low-Carbon Transition: An Evaluation Framework with an Application to Austria By Edwin van der Werf; Herman R. J. Vollebergh; Johanna Vogel
  49. It takes two to dance: institutional dynamics and climate-related financial policies By Baer, Moritz; Campiglio, Emanuele; Deyris, Jérôme
  50. Carbon Taxation and Inflation: Evidence from the European and Canadian Experience By Maximilian Konradt; Beatrice Weder di Mauro

  1. By: David S. Rapson; Erich Muehlegger
    Abstract: Electric vehicles (EVs) powered by renewable electricity are a centerpiece of efforts to decarbonize transportation. EV advocates also claim benefits from local pollution reductions, lower life-cycle costs to consumers, and improved energy security. We examine the theory and evidence behind these claims and evaluate when the market will produce the optimal path of EV adoption. Optimal EV policy is nuanced. While EVs driven in some locations reduce pollution, they increase pollution in others. While many consumers enjoy cost savings from EVs, some experience net benefits from choosing gasoline-powered cars, even after accounting for EV subsidies. And depending on the dynamic benefits of stimulating EV adoption today, optimal policy might front-load stimulus, even though the environmental benefits of EV adoption are likely to increase over time as electricity grids become cleaner. Reflecting these nuances, the policy landscape is complicated and often creates conflicting incentives for EV adoption in regions with ambitious adoption goals. We highlight several themes for policy design, including 1) promoting regional variation in EV policies that align private incentives with social benefits, 2) pursuing a time-path of policies that follows the trajectory of marginal benefits, and 3) rationalizing electricity and gasoline prices to reflect their social marginal cost. On the extensive margin, purchase incentives should ramp-down as learning-by-doing and network externalities that may exist diminish; on the intensive margin, gasoline should become relative more expensive than electricity (per mile traveled) to reflect cleaner marginal emissions from electricity generation.
    JEL: Q54 Q55 Q58 R4
    Date: 2021–07
  2. By: Kurani, Kenneth; Buch, Koral
    Abstract: While ownership and purchase of all vehicles approach gender parity, to date electric vehicles (EV) are being purchased by far more men than women. Prior analysis from California finds no reason in the available data why this difference persists. This report extends that analysis across 12 other U.S. states with varying, but generally less supportive than California, EV policy and market contexts. Data are from a survey conducted of new-car buying households at the end of 2014, which allowed participants to express their prospective interest in acquiring an EV. Participants then indicated why they were motivated to select an EV or what motivated them to not select one. Via multivariate modeling, differences in prospective interest in EVs between female and male respondents are examined, and overall, no difference rises to the level of the observed differences in real EV markets. Further, the multivariate modeling indicates no statistically significant effect of a sex indicator on prospective interest almost anywhere in these data; where there is a difference, female participants are estimated to be more likely to select an EV than their male counterparts. While participants from both sexes tend to give high scores to the same EV (de)motivations, differences in their rank orders repeat generalizations from other research. On average, female respondents score environmental motivations for selecting an EV higher than do male respondents. On average, male participants score interest in “new technology” as a motivation for selecting an EV higher than do female participants. Conversely, on average female respondents who do not select an EV score “unfamiliar technology” more highly than their male counterparts. Within the variation in EV policy and market contexts represented in this study, no finding here explains why similar prospective interest in EVs from five years ago has yet to be turned toward equal participation in EV markets. Explanations may lie in factors not modeled here. View the NCST Project Webpage
    Keywords: Social and Behavioral Sciences, Electric vehicle, zero emission vehicle, gender, sex, policy, market
    Date: 2021–08–01
  3. By: Fukushige, Tatsuya; Fitch, Dillon; Handy, Susan
    Abstract: Dock-less, electric bike-share services offer cities a new transportation option with the potential to improve environmental, social, and health outcomes by increasing physical activity and reducing vehicle miles traveled (VMT) and related greenhouse gas emissions. But these benefits accrue only if bike-share use replaces car travel. If bikeshare pulls users from public transit, personal bikes, or walking, the benefits will be limited. Little is known about the factors influencing whether bike-share substitutes for driving. Understanding the degree to which and under what circumstances bike-share use reduces car travel can inform cities’ efforts to meet VMT reduction goals set under California’s Sustainable Communities and Climate Protection Act of 2008 (Senate Bill 375). Researchers at the University of California, Davis collected user surveys and system-wide trip data from a Sacramentoarea dockless e-bike-share program in 2018 and 2019 to examine factors influencing travel mode substitution and estimated system-wide VMT reductions caused by bikeshare use. They developed a model to examine factors influencing bike-share demand and estimated potential VMT reductions for hypothetical expanded service scenarios.
    Keywords: Social and Behavioral Sciences
    Date: 2021–08–01
  4. By: Nkosi, Mfundo; Dikgang, Johane; Kutela Gelo, Dambala; Pholo, Alain
    Abstract: An increasing number of countries around the world have linked taxes with passenger vehicle carbon dioxide (CO2) emission rates. Policymakers use vehicle and fuel taxes to target and reduce transportation greenhouse gas emissions. In 2010, the South African government joined this group, linking taxes to passenger-vehicle CO2-emission rates by introducing the vehicle CO2 tax, to reduce the carbon output of the new vehicle fleet by incentivising the purchase of more fuel-efficient vehicles. However, there is little evidence of the relative efficacy of this measure in South Africa. Based on new-vehicle sales data from 2010 to 2012, single-group interrupted time-series analysis (ITSA) reveals that CO2 taxes reduced average carbon emissions only marginally. This prompted the vehicle-CO2 tax reforms of 2013. Based on subsequent new-vehicle sales data, from 2013 to 2018, we find that the reforms have led to significant CO2 reductions. Overall, CO2 taxes moved consumer preference to low-emission vehicles (i.e., vehicles in the band producing less than 120g/km), and discouraged the purchase of bigger, heavier and more powerful vehicles. They also had a great effect on average emissions; by 2018, average carbon emissions had declined by 21% compared to 2010, to 151g/km. Moreover, there is some evidence that the tax has affected the mix of new vehicles that vehicle manufacturers sell in the South African market, as the volume of low carbon intensity new vehicles increased significantly, to 31% of total sales in 2018 compared to 13% in 2010.
    Keywords: CO2,emissions,taxes,vehicles
    JEL: H31 L62 Q41 Q54 R48
    Date: 2021
  5. By: Fukushige, Tatsuya; Fitch, Dillon PhD; Handy, Susan
    Abstract: Dock-less, electric bike-share services offer cities a new transportation option with the potential to improve environmental, social, and health outcomes. But these benefits accrue only if bike-share use replaces car travel. The purpose of this study is to examine factors influencing whether bike-share substitutes for driving and the degree to which and under what circumstances bike-share use reduces car travel. Major findings in this report include (1) bike-share in the Sacramento region most commonly substitutes for car and walking trips, (2) each bike in the Sacramento bike-share fleet reduces users’ VMT by an average of approximately 2.8 miles per day, (3) areas with a higher proportion of low-income households tend to use bike-share less, (4) bike-share availability appears to induce new trips to restaurants and shopping and for recreation, (5) bike-share trips from commercial and office areas were more likely to replace walking or transit trips, while bike-share trips from non-commercial areas (and trips to home or restaurants) were more likely to replace car trips, (6) expanding the bike-share service boundary at the same fleet density decreases system efficiency and VMT reductions per bike. Our result suggests the need for an efficient rebalancing strategy specific to areas by time of day to increase the service efficiency and its benefits. Further analysis of the data used in this study to examine questions such as how bike share can improve transit connections and factors inducing bike use at the individual level will contribute to the development of more robust models and provide additional insights for bike share operation strategies and policy implementation.
    Keywords: Social and Behavioral Sciences, Bicycles, vehicle sharing, electric vehicles, shared mobility, travel demand, travel behavior, travel surveys, demographics, e-scooters, electric bicycles
    Date: 2021–07–01
  6. By: Paula Walk; Isabell Braunger; Josephine Semb; Carolin Brodtmann; Pao-Yu Oei; Claudia Kemfert
    Abstract: For climate change mitigation a rapid phase-out of fossil fuels such as coal is necessary. This has far-reaching gender-specific consequences. This paper presents a systematic map of the literature that examines the impact of historical coal phase-out processes on women and their role in these processes. The search process consists of screening 2,816 abstracts and reading 247 full-text studies. The analysis of the 73 publications ultimately included in the systematic map shows that past coal phase-outs meant, both opportunities (e.g. increased labour market participation) as well as burdens for women (e.g. double burden of job and household). It becomes clear that agency within coal transitions was also gendered. For example, it was difficult for women to gain access to union structures, which led them to organise themselves into grassroots movements. Our research shows that policies aiming for a just sustainability transition should always be explicitly gender-responsive. However, the impact of sustainability transitions on women's lives remains largely under-researched. Therefore, we propose a research agenda based on our findings containing six key issues that need to be addressed scientifically.
    Keywords: Gender, Coal Phase-Out, Just Transition, Systematic Map
    JEL: O13 Q52 B54
    Date: 2021
  7. By: Randall Jackson (Regional Research Institute, West Virginia University); Péter Járosi (Regional Research Institute, West Virginia University)
    Abstract: This report describes an effort to provide for the Appalachian Region a clearer picture of the implications for the Power Industry Ecosystem (PIE) of power generating technology transitions and the geographical variations in PIE impacts. We develop and implement three measures that reveal meaningful characteristics of the PIE at the county level in terms of industry and place-based PIE dependence, changes in PIE-dependent employment, and susceptibility to impacts from a continued energy sector transition. We then use these three measures—Dependence, Impact, and Risk—to form a typology that we apply to identify and focus on counties in three identifiable categories: Hardship counties, Vulnerable counties, and Depressed counties.
    Keywords: Regional Economics, Energy, Supply Chains, Appalachia
    JEL: R11 O13 R15
    Date: 2021–07
  8. By: an Ha Truong (VIET - Vietnam Initiative for Energy Transition); Minh Ha-Duong (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Purpose: As governments force electricity producers to use more renewable energy sources, over a hundred thermal power plants in high-income countries turned to biomass as a partial or complete replacement for coal. Is the co-firing technology appropriate for Vietnam? Method: The technology assessment study is conducted by building an integrated lifecycle model of the sector, tracking material and financial flows from fuel sourcing to airborne emissions, simulating the economics, environmental and social implications of blending 5% of rice straw in two different existing coal power plants in Vietnam. Findings: The business value of co-firing is positive –straw is cheaper than coal–. It is likely not large enough to motivate the stakeholders. Co-firing creates an external social benefit by reducing air-borne pollution and creating jobs. It reduces the pollution caused by open field straw burning. We found the external social benefit to be several times larger than the private business value. Within that external benefit, the social value of avoided SO2, PM2.5 and NOx emissions dominates the social value of avoided CO2 emissions. The net job creation effect is positive: collecting straw creates more employment than using less coal destroys. Originality and limitations: This is the first technology assessment of co-firing biomass in coal power plants in Vietnam and one of the first for a subtropical middle-income country. The study only considers rice straw, and it does not address the role of government nor the biomass market functioning. Conclusion: The price of coal is the primary determinant of co-firing business value. There is an empirical economic justification for a public intervention to promote co-firing biomass in Vietnam. Local air quality goals, rather than greenhouse gas reduction policy, can justify such regulations.
    Keywords: Biomass cofiring,Emission control,Coal power,Lifecycle Assessment LCA,Technology assessment
    Date: 2021–07–02
  9. By: Dawud Ansari; Mariza Montes de Oca Leon; Helen Schlüter
    Abstract: Since 2015, Saudi Arabia has led a foreign military intervention against the Houthi movement, which took over major parts of Yemen. The intervention, which manifests mainly in airstrikes, has attracted widespread controversy in media and politics as well as a large body of (qualitative) academic literature discussing its background and ways to escape it. Complementary to these efforts and connecting to the literature on oil and conflict, this study provides unique quantitative insights into what drives the extent of military interaction. We use a vector autoregressive (VAR) model to analyse the interactions between Saudi airstrikes in Yemen, gains of the Houthi movement on Yemeni ground, their attacks on Saudi Arabian soil, and crude oil prices. Our approach builds on high-resolution data from the Yemen Data Project and the Armed Conflict Location and Event Data Project. Our results show not only that the airstrike campaign has been factually impotent to repulse the Houthi movement but also that the movement’s expansion in Yemen has not driven Saudi airstrikes. These findings draw both suitability and justification of the intervention further into question. Moreover, although the data fail to show that oil price levels drive the developments, our model identifies oil price volatility as a determinant for the airstrikes. However, the intervention has, in turn, no significant effect on oil markets. Besides adding to the academic discourse on oil and conflict, our results have implications for energy and climate policy: a coordinated transition might not deteriorate regional security, while uncertainty and fluctuations can increase conflict potential.
    Keywords: Saudi Arabia; Yemen war; VAR model; oil prices; military conflict; regime legitimacy
    JEL: C32 F51 Q34 Q54
    Date: 2021
  10. By: Henri Njangang (University of Dschang, Cameroon); Simplice A. Asongu (Yaoundé, Cameroon); Sosson Tadadjeu (University of Dschang , Cameroon); Yann Nounamo (University of Douala, Douala, Cameroon); Brice Kamguia (University of Dschang, Cameroon)
    Abstract: The study assesses the role of governance in modulating the effect of oil wealth on wealth inequality in 45 countries in the world. The empirical evidence is based on Pooled Ordinary Least Squares and the Generalised Method of Moments. The findings show that oil rents unconditionally increase wealth inequality while govenance dyanmics (in terms of rule of law, corruption-control, government effectiveness, regulatory quality) moderate oil rents for an overall net negative effect on wealth inequality. Good governance thresholds at which the unconditional effect of oil rents on the wealth inequality changes from positive to negative are computed and discussed. It follows that while governance is a necessary condition for improving the redistributive effects of oil wealth, it becomes a sufficient condition for net positive improvements in wealth distribution only when some critical levels of good governance have been reached. Other policy implications are discussed.
    Keywords: Governance; Oil wealth; Wealth inequality, Panel data
    JEL: F21 F54 L71
    Date: 2021–01
  11. By: Sania Wadud; Robert D. Durand; Marc Gronwald
    Abstract: This paper examines the effect of financialisation of futures markets has on the relationship between crude oil futures and equities by using the VAR-DCC-GARCH model. Specifically, by accounting for the systematic patterns of commodity price volatility, namely, seasonality and maturity effects for the pre-financialisation (1993-2003) and post-financialisation (2004-2019) period. While speculation that reflects non-commercial investors’ activity is found to have a negative impact on crude oil futures’ volatility before the financialisation period, open interest as a measure of liquidity has a negative effect after 2004. The finding indicates weakening seasonality in crude oil futures and diminishing Samuelson maturity effect i.e. volatility of the contract increases as it nears to expiration since financialisation. This confirms the importance of accounting for volatility dynamics while contributing to financialisation debate.
    Keywords: financialisation, volatility dynamics, Samuelson hypothesis, correlation, seasonality
    JEL: C32 G12 G15
    Date: 2021
  12. By: Peilun He; Karol Binkowski; Nino Kordzakhia; Pavel Shevchenko
    Abstract: We study a bivariate latent factor model for the pricing of commodity fu- tures. The two unobservable state variables representing the short and long term fac- tors are modelled as Ornstein-Uhlenbeck (OU) processes. The Kalman Filter (KF) algorithm has been implemented to estimate the unobservable factors as well as unknown model parameters. The estimates of model parameters were obtained by maximising a Gaussian likelihood function. The algorithm has been applied to WTI Crude Oil NYMEX futures data.
    Date: 2021–08
  13. By: Andrés O. Dávila; Manuel Fernández; Hernando Zuleta
    Abstract: We study the effect of the upsurge of natural resources income from the commodity price boom of the 2000s on the functional distribution of income. To do so, we build a general equilibrium model of Dutch disease that characterizes how natural resource windfalls affect equilibrium factor shares. The theory suggests that the response of factor shares to exogenous changes in commodity prices depends on the relative intensity of factors in the tradable and natural resource sectors. We construct estimates of income shares accruing to raw labor, human capital, physical capital, and natural resources, and quantify the effect of the resource boom on factor shares. For identification, we use a two-way fixed effects strategy and a differential exposure design to instrument commodity prices. We find that a natural resource boom negatively impacts the total labor, human capital, and physical capital shares, while the raw labor share remains unchanged. Our estimates suggest that the natural resource boom explains nearly 25.7 percent of the global decline of the total labor share during the 2000s. We also find a redistribution effect within labor income that indicates that the fall of the labor share was unevenly distributed against human capital.
    Keywords: Labor Share, Factor Income Shares, Natural Resource Boom, Commodity Price Boom, Dutch Disease, Human Capital.
    JEL: D33 F14 J31 O13
    Date: 2021–07–23
  14. By: Gillingham, Kenneth; Huang, Pei
    Abstract: This study examines the uneven effects of air pollution from maritime ports on physical and mental health across racial groups. We exploit quasi-random variation in vessels in port from weather events far out in the ocean to estimate how port traffic influences air pollution and human health. We find that one additional vessel in a port over a year leads to 3.0 hospital visits per thousand Black residents within 25 miles of the port and only 1.0 per thousand for whites. We assess a port-related environmental regulation and show that the policy can help alleviate racial inequalities in health outcomes.
    Keywords: air pollution,health,environmental justice,quasi-experiment,instrumental variables,regression discontinuity design
    JEL: D63 I14 Q51 Q53 Q58 R41
    Date: 2021
  15. By: Isaksen, Elisabeth; Johansen, Bjørn G.
    Abstract: This paper shows that differentiating driving costs by time of day and vehicle type help improve urban air quality, lower driving, and induce adoption of electric vehicles. By taking advantage of a congestion charge that imposed spatial and temporal variation in the cost of driving a conventional vehicle, we find that economic incentives lower traffic and concentrations of NO2. Exploiting a novel dataset on car ownership, we find that households exposed to congestion charging on their way to work were more likely to adopt an electric vehicle. We document strong heterogeneous patterns of electric vehicle adoption along several socioeconomic dimensions, including household type, income, age, education, work distance and public transit quality.
    Keywords: air pollution; electric vehicles; transportation policies; congestion charging; Centre for Climate Change Economics and Policy; 267942; 302059; 295789
    JEL: C33 H23 Q53 Q55 Q58 R41 R48
    Date: 2021–06–07
  16. By: Jairo Abdala Martínez Henao
    Keywords: Sostenibilidad, Competitividad, Energías limpias
    Date: 2020–06–17
  17. By: Davillas, Apostolos (University of East Anglia); Burlinson, Andrew (University of East Anglia); Liu, Hui-Hsuan (Royal Veterinary College)
    Abstract: This paper uses data from Understanding Society: the UK Household Longitudinal Study to explore the association between fuel poverty and a set of well-being outcomes: life-satisfaction, self-reported health measures and more objectively measured biomarker data. Over and above the conventional income–fuel cost indicators, we also use more proximal heating deprivation indicators. We create and draw upon a set of composite indicators that concomitantly capture (the lack of) affordability and thermal comfort. Depending on which fuel deprivation indicator is used, we find heterogeneous associations between fuel poverty and our well-being outcomes. Employing combined fuel deprivation indicators, which takes into account the income–fuel cost balance and more proximal perceptions of heating adequacy, reveals the presence of more pronounced associations with life satisfaction and fibrinogen, one of our biological health measures. The presence of these strong associations would have been less pronounced or masked when using separately each of the components of our composite fuel deprivation indicators as well as in the case of self-reported generic measures of physical health. Lifestyle and chronic health conditions plays a limited role in attenuating our results, while material deprivation partially, but not fully, attenuates our associations between fuel deprivation and well-being. These results remain robust when bounding analysis is employed to test the potential confounding role of unobservables. Our analysis suggests that composite fuel deprivation indicators may be useful energy policy instruments for uncovering the underlining mechanism via which fuel poverty may get "under the skin".
    Keywords: fuel poverty, biomarkers, health, well-being
    JEL: I12 I31 I32 Q4
    Date: 2021–08
  18. By: Mortazi, Mohammad; Moradi, Ahmad; Khosravi, Mohsen
    Abstract: Voltage control and reactive power play an important role in the operation of the distribution network. Accordingly, conventional methods such as the installation of a capacitor in an optimum location with a proper capacity and optimal transformer tap setting which has an impressive effect on voltage control and reactive power are used. But the study on the simultaneous use of these two methods is limited and it seems necessary to be conducted. These days the presence of Distributed Generation (DG) resources has grown in distribution networks. The presence of distributed generation resources has a great influence on the voltage profile due to the radial structure of the distribution network and the low X/R ratio. Therefore, it is necessary to consider the optimal coordination of the use of switchable capacitors and the setting of transformer taps in the presence of distributed generation resources to improve the voltage profile and reduce losses. This paper examines the simultaneous use of capacitors and transformer taps in distribution networks to reduce the voltage deviation and distribution losses in the presence of distributed generation resources. In order to explain the objectives, six different operation scenarios have been defined and studied. The above study is implemented based on the IEEE, 13 and 34 bus standard networks and the results are presented. The presented results clearly indicate the necessity of coordinating the use of these tools in distribution networks.
    Keywords: Capacitor, Distributed Generation Resources, Loss Reduction, Particle Swarm Optimization Algorithm, Transformer Tap Changer, Voltage Adjustment
    JEL: O14 O32 Q32
    Date: 2020–07–30
  19. By: Manuela Tvaronavičienė (Vilnius Gediminas Technical University, Daugavpils University); Tomas Plėta (Vilnius Gediminas Technical University); Silvia Casa (NATO Energy Security Centre of Excellence); Juozas Latvys (NATO Energy Security Centre of Excellence)
    Abstract: The progresses made in terms of cybersecurity in these past years have been huge, and the implementation of newer strategies has brought interesting results all over the globe. However, the full implementation of cybersecurity presents a challenge to a lot of countries, especially if considered the Critical Infrastructure Protection (CIP), which is still one of the areas with the most gaps in terms of cybersecurity. In this article, the first five countries by cybersecurity level according to the Global Cybersecurity Index (GCI) 2018, in order UK, USA, France, Estonia and Lithuania, will be evaluated for their solutions in terms of Critical Infrastructure Protection. The results will show the effective accuracy of the index and will shed light on the various approaches to Critical Infrastructure Protection.
    Keywords: cybersecurity,critical infrastructure protection,management,energy security,cyber attack
    Date: 2020–09–30
  20. By: Mark Horridge; Elizabeth L. Roos
    Abstract: Countries that export energy or minerals often feel that they would be richer if the commodities could be processed onshore rather than overseas. In this way, it is thought, 'value-adding' could occur locally, raising local GDP. Such countries may subsidize local use of the exportable commodity. The strategy, which involves 'picking winners', is not obviously sensible. Why not sell at the higher, export, price? If a subsidy to local industry were needed, why not offer an explicit subsidy, rather than a hidden subsidy in the form of cheaper inputs. A more orthodox economic approach would stress that prosperity is based on: * human capital (a skilled and well-educated workforce); * good infrastructure (eg, good roads and reliable electricity); * good governance (not too much red tape or corruption); * and, with luck, valuable natural resources! The focus of this study is Indonesia's effort to use more natural gas locally rather exporting it. To further this aim, domestic users are offered natural gas at a price below the export (world) price. There is in effect a subsidy to local use of natural gas. Using INDORANI, a computable general equilibrium (CGE) model of Indonesia, we simulate the effect of removing this subsidy.
    Keywords: Regional modelling gas subsidies Indonesia
    JEL: C68 H21
    Date: 2021–08
  21. By: Eskander, Shaikh; Fankhauser, Samuel
    Abstract: We present empirical evidence of the international emissions impact from climate change legislation in 98 countries between 1997 and 2017, using data from Climate Change Laws of the World. Unlike traditional measures of carbon leakage, we focus on net carbon imports, that is, the difference between consumption and production emissions. Using different estimation techniques, we estimate the impact on carbon intensity of two legislation variables, recent legislation (passed in the last 3 years) and older legislation (passed more than 3 years ago). We find that recent legislation reduces production emissions more than consumption emissions, while older laws have a bigger impact on consumption emissions. The combined effect of these changes on net carbon imports is very small. Overall, we find no evidence that domestic climate legislation has increased international carbon leakage over the past two decades. Indeed, in high-income countries the longrun leakage rate may even be negative.
    Keywords: climate change legislation; climate policy; carbon leakage; pollution havens; production emissions; consumption emissions; Centre for Climate Change Economics and Policy; Strategic Research Fund; Faculty of Business and Social Sciences
    JEL: F18 K32 Q54 Q58
    Date: 2021–07–27
  22. By: Macaire Camille,; Naef Alain.
    Abstract: In June 2018, the People’s Bank of China (PBoC) decided to include green financial bonds into the pool of assets eligible as collateral for its Medium Term Lending Facility. The PBoC also gave green financial bonds a “first-among-equals” status. We measure the impact of the policy on the yield spread between green and non-green bonds. We show that pre-reform trends are minor, meaning that both green and non-green bonds yields evolved similarily at the time of the reform. Using a difference-in-differences approach, we show that the policy increased the spread by 46 basis points. Our approach differs from the literature in that we match bonds under review with non-green bonds with similar characteristics and issued by the same firm, which improves the relevance of firm fixed-effects. We also specifically investigate the impact on green bonds. The granularity of the data (daily) also allows us to conduct a dynamic analysis by dividing the sample into weekly, monthly and quarterly observations. Our results also show that the impact of the reform starts to materialize after three weeks, has a maximum effect after three months, and has a persistent effect over six months.
    Keywords: People’s Bank of China, Central Bank Collateral Framework, Green Bonds, Bond Yields, Greenium.
    JEL: E52 E58 Q51 Q54 G12 G18
    Date: 2021
  23. By: Chlond, Bettina; Gavard, Claire; Jeuck, Lisa
    Abstract: In the context of tight public budgets and increasingly ambitious climate objectives, the performance of the support policies for residential energy conservation works needs to be assessed. We compare the performance of four types of support schemes in France, namely the income tax credit, a grant scheme, the reduction of the value-added tax, and the White Certificates scheme. The analysis employs a dataset covering close to 14,000 French households who conducted conservation works in France. To address self-selection bias and potential endogeneity concerns, we use a double-robust inverse probability weighting estimator, a method mostly used in epidemiology so far. We assess the effect of the adoption of each scheme on the funding acquired, the private investment, total investment and the reduction of the household energy expenses. We deduct metrics of cost-effectiveness, redistribution and the ability to trigger private investment and additional total investment in energy conservation works via the schemes. We find funding from the schemes to reduce energy expenses most cost-effectively via the White Certificates. Additional private and total investment is highest with the adoption of the VAT reduction. The redistribution of public funds to low-income households is highest with the grant scheme.
    Keywords: Energy efficiency,energy conservation,residential retrofits,cost-effectiveness,re-distribution,inverse probability weighting
    JEL: H23 Q58
    Date: 2021
  24. By: Fermin Cuevas (ICMPE - Institut de Chimie et des Matériaux Paris-Est - CNRS - Centre National de la Recherche Scientifique - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12); Junxian Zhang (ICMPE - Institut de Chimie et des Matériaux Paris-Est - CNRS - Centre National de la Recherche Scientifique - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12); Michel Latroche (ICMPE - Institut de Chimie et des Matériaux Paris-Est - CNRS - Centre National de la Recherche Scientifique - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12)
    Date: 2021
  25. By: Elbaum Jean-David
    Abstract: This paper is a quasi-replication of Andersson (2019). I use the synthetic control method to estimate the effect of a carbon tax starting at $1.41 per tonne of CO2 and increased through successive reforms to $20 by 2011. The results show that, one year after the intervention, the tax reduced CO2 emissions from transport by around 10% relative to the synthetic counterfactual, composed from the weighted average of OECD countries. Five years after the intervention, the effect increases to almost 20% and in 2005, the last year of the dataset, the estimated effect is of around 48%. After some robustness checks, the estimated effect is a 15% reduction in 2005. My results are consistent with Andersson (2019), who finds a 12.5% reduction at the end of his studied period. My paper contributes to the thin literature analyzing the the effect of a carbon tax ex post, providing new evidence of the effectiveness of these instruments.
    Keywords: Solar systems; Carbon pricing; Emissions reduction; Environmental tax; Greenhouse gas emissions, Synthetic control method.
    JEL: H23 Q54 Q58
    Date: 2021–08
  26. By: Spackman, Michael
    Abstract: There has been a forty-year divide in economics on the relevance to public funding of the equity premium (in particular, today, the consumption CAPM). The costs and benefits of public spending are often correlated with income, but conventional neoclassical analysis, applied by many governments, suggests that the cost of this systematic risk in publicly funded activities is usually trivial. On the other hand, it is often asserted that equity market premiums, which are very much higher than would be estimated from neoclassical analysis (the equity premium ‘puzzle’), should apply also to public funding. This paper, which aims largely to help government administrations, assembles a picture of the evolving research on and understanding of the premium. Public funding does incur social costs arising from the associated tax burden. There is, however, no evidence to support assertions that the equity risk premium anomaly is relevant to public funding. In any case, the cost of systematic risk in the benefits of public funding does not fall as an annual percentage rate to financiers, but as an absolute cost to public service beneficiaries.
    Keywords: climate change legislation; climate policy; carbon leakage; pollution havens; production emissions; consumption emissions; Centre for Climate Change Economics and Policy
    JEL: N0 E6
    Date: 2021–07–28
  27. By: Echeverría, Lucía (University of Zaragoza); Gimenez-Nadal, J. Ignacio (University of Zaragoza); Molina, José Alberto (University of Zaragoza)
    Abstract: Mobility gives individuals access to different daily activities, facilities, and places, but at the cost of imposing environmental burdens. The sustainable growth of society is linked to green mobility (e.g., public transport, walking, cycling) as a way to alleviate individual carbon footprints. This study explores the socio-demographic profile of individuals performing green travel (public and physical modes of transport) and identifies cross-country differences in green travelling behavior. We rely on information from the Multinational Time Use Study, MTUS. for Bulgaria, Canada, Spain, France, Hungary, Italy, the Netherlands, the United Kingdom, and the United States, from 2000 to 2019. We estimate Ordinary Least Squares regressions modelling individual decisions regarding green mobility. Our results indicate that the socio-demographic and family profile of travelers is not homogenous across green modes of transport, with physical travel exhibiting a much more consistent profile, across countries, in comparison to the use of public transport. Results indicate a positive relationship between living in urban areas and the time proportion of green travel, but estimates by country differ in magnitude and depend on the mode. We also find that some countries are more prone to green travel, and that transport infrastructure is more related to the proportion of time travelled by physical transport than by public transport. Our findings help in understanding who is committed to green mobility, while revealing systematic differences across countries that are worth analyzing.
    Keywords: green mobility, public transport, walking/cycling, Multinational Time Use Study
    JEL: R40 J22 O57
    Date: 2021–07
  28. By: David Friederich; Lynn H. Kaack; Alexandra Luccioni; Bjarne Steffen
    Abstract: It is important for policymakers to understand which financial policies are effective in increasing climate risk disclosure in corporate reporting. We use machine learning to automatically identify disclosures of five different types of climate-related risks. For this purpose, we have created a dataset of over 120 manually-annotated annual reports by European firms. Applying our approach to reporting of 337 firms over the last 20 years, we find that risk disclosure is increasing. Disclosure of transition risks grows more dynamically than physical risks, and there are marked differences across industries. Country-specific dynamics indicate that regulatory environments potentially have an important role to play for increasing disclosure.
    Date: 2021–08
  29. By: Kalsbach, Oliver; Rausch, Sebastian
    Abstract: Economists tend to view a uniform emissions price as the most cost-effective approach to reducing greenhouse gas emissions. This paper offers a different view, focusing on economies where society values the well-being of future generations more than private actors. Employing analytical and numerical general equilibrium models, we show that a uniform carbon price is efficient only under restrictive assumptions about technology homogeneity and intertemporal decision-making. Non-uniform pricing spurs capital accumulation and benefits future generations. Depending on sectoral heterogeneity in the substitutability between capital and energy inputs, we find that optimal carbon prices differ widely across sectors and yield substantial welfare gains relative to uniform pricing.
    Keywords: Sectoral Carbon Pricing,Differentiated Carbon Taxes,Climate Policy,Social Discounting
    JEL: Q54 Q58 Q43 H23 C61
    Date: 2021
  30. By: Hashim Almusawi (IFPEN - IFP Energies nouvelles - IFPEN - IFP Energies nouvelles, IFP School); Arash Farnoosh (IFPEN - IFP Energies nouvelles - IFPEN - IFP Energies nouvelles, IFP School)
    Abstract: Many challenges facing the current and the future governments of Iraq, and one of these challenges is the situation of the power sector in the country. This study is about finding economic optimization scenarios for Iraq power mix, as the country is in dire need to minimize its power generation costs and finding the ultimate power mix structure that can help in developing the country for the better. Mean Variance Approach (MVA) is used to optimize the national power mix. It considers various costs that are involved in the power generation and the associated risks of using a particular power generation technology. The three main generation power technologies that were taken into account are gasturbines, thermal a nd diesel power stations in addition to the electricity imported and the generated electricity by the independent power producers (IPPs). The study proposes an optimization scenario balancing between the involved costs and risks associated with the power mix. The optimal scenario is to use around 47% gas turbines, 14% thermal, 0.04% diesel, 2% hydro and 33% IPPs.
    Keywords: Electricity Planning,Energy Policy,Iraq,Portfolio theory,Mean-Variance
    Date: 2021–06–01
  31. By: Hochstetler, Kathryn
    Abstract: What kinds of national climate institutions can solve the governance challenges that the Paris Agreement devolves to them? This article identifies three stages of climate institutions in Brazil, a major emitter of greenhouse gases through deforestation that managed to reduce such emissions for nearly a decade. It shows that a narrow definition of climate institutions that seeks purpose-built state institutions fails to capture important dynamics there, and that such institutions have little direct impact on outcomes. In Brazil’s political landscape, national presidents exercise a decisive influence on their climate ambitions and capacities. However, positive and negative feedback loops also brought some effective climate action from the layering of climate purposes into existing institutions, as well as through non-traditional institutions like private governance arrangements for agriculture.
    Keywords: climate change; climate institutions; Brazil; deforestation; Taylor & Francis deal
    JEL: R14 J01
    Date: 2021–07–21
  32. By: Ruhnau, Oliver; Qvist, Staffan
    Abstract: In the context of 100% renewable electricity systems, prolonged periods with persistently scarce supply from wind and solar resources have received increasing academic and political attention. This article explores how such scarcity periods relate to energy storage requirements. To this end, we contrast results from a time series analysis with those from a system cost optimization model, based on a German 100% renewable case study using 35 years of hourly time series data. While our time series analysis supports previous findings that periods with persistently scarce supply last no longer than two weeks, we find that the maximum energy deficit occurs over a much longer period of nine weeks. This is because multiple scarce periods can closely follow each other. When considering storage losses and charging limitations, the period defining storage requirements extends over as much as 12 weeks. For this longer period, the cost-optimal storage capacity is about three times larger compared to the energy deficit of the scarcest two weeks. Adding other sources of flexibility for the example of bioenergy, the duration of period that defines storage requirements lengthens to more than one year. When optimizing system costs based on single years rather than a multi-year time series, we find substantial inter-annual variation in storage requirements with the most extreme year needing more than twice as much storage as the average year. We conclude that focusing on short-duration extreme events or single years can lead to an underestimation of storage requirements and costs of a 100 % renewable system.
    Keywords: Renewable energy,Wind and solar power,Inter-annual variability,Low-wind events,Dunkelflaute,Electricity system,Energy storage,Hydrogen,Batteries
    JEL: Q4 Q40 Q41 Q42
    Date: 2021
  33. By: Dikau, Simon; Volz, Ulrich
    Abstract: Chinese monetary and financial authorities have been among the pioneers in promoting green finance. This paper investigates the use of one specific monetary policy tool, namely window guidance, by the People’s Bank of China (PBC) and the China Banking Regulatory Commission (CBRC) to encourage financial institutions to expand credit to sustainable activities and curb lending to heavy-polluting industries. We investigate window guidance targets for the period 2001-2020 and find that ‘green window guidance’ was used by the CBRC from at least 2006 and by the PBC from 2007 to discourage lending to carbon-intensive and polluting industries and/or to increase support to sustainable activities. Both authorities stopped discouraging lending to carbon-intensive/polluting industries in 2014. Sustainable objectives were subsequently also removed from the PBC’s list of priority sectors at the start of 2019, ending the practice of green window guidance in China. Sustainability-enhancing window guidance targets were replaced and formalised through new ‘Guidelines for Establishing the Green Financial System’, reflecting efforts to move away from controls-based towards market-based policy instruments. Based on this analysis, the paper draws four lessons for the design of green finance policies for other countries that seek to enhance sustainable finance and mitigate climate change and related risks.
    Keywords: sustainable finance; central banking and financial supervision; China; Centre for Climate Change Economics and Policy; ES/P005241/1; ES/R009708/1; 71661137002
    JEL: G10 G20 G30 Q01 Q50
    Date: 2021–05–14
  34. By: Christoph Siemroth; Lars Hornuf
    Abstract: Are investors willing to give up a higher return if the investment generates positive environmental impact? We investigate this question with a decision experiment among crowdfunders, where they choose between a higher return or environmental impact. Overall, 65% of investors choose environmental impact at the expense of a higher return for sufficiently large impact, 14% choose impact independent of the magnitude of impact, while 21% choose the higher return independent of impact. Combining the experimental data with historical investments, we find that investors allocate a larger share of funds to green projects if they value environmental impact more, and if they expect green projects to be more profitable. These findings suggest that investors have a preference for positive environmental impact, and satisfy it by investing in green projects. We further show that the preference for environmental impact is distinct from a preference for positive social impact. Finally, we introduce new survey measures of impact for future use, which are experimentally validated and predict field behavior.
    Keywords: debt crowdfunding, environmental impact, ESG, green investments, social impact, sustainable finance
    JEL: C93 D14 D90 G32
    Date: 2021
  35. By: Nitin Harak (ONGC Videsh Limited); A. Ganesh Kumar (Indira Gandhi Institute of Development Research)
    Abstract: Natural gas as a source of clean fuel is important in many economies. With the increase of trade in gas led by LNG trade, market integration as occurred in other sectors is been promoted in various regions of the world. However, in India, the objective to address distributional concerns and domestic economic growth superseded the reform agenda with India adopting the market intervention approach of controlling energy prices. The policies were greatly focused towards the allocation of natural gas to priority sectors like fertiliser, city gas distribution, power, etc. at affordable prices as the output prices of these sectors are subsidised. The interlocking of subsidies of the demanding sector and ad-hoc pricing procedure adopted for gas pricing has resulted in a distorted market. As a result, natural gas share in primary energy consumption in India is about 8 percent as compared World average of 24 percent (2013). This paper examines the impacts of price reforms in the natural gas sector. In particular, the paper attempts to quantify the impacts of sequencing the pricing reforms under three plausible scenarios (a) introduce upstream price reform without introducing reforms in the consuming sectors i.e. fertiliser, power sector and city gas distribution (b) introduce price reform along with partial reforms in downstream reform by removing the prioritised gas allocation policy and allowing consuming sectors to pass the increase in energy price to the end-users and introduction of full reform i.e. price and quantity. Further, to stimulate the decision-making process for resolving the issues, the paper proposes policy recommendations.
    Keywords: Natural gas, Price reforms, General equilibrium modelling
    JEL: C68 N75 Q41 Q48
    Date: 2021–07
  36. By: Julia M. Puaschunder (The New School, Department of Economics, USA)
    Abstract: This article proposed three innovative and heterodox ways to aid understanding and unleashing a sustainable economy in Three Essays on Environmental Justice: First, behavioral insights are presented about real-world relevant, easily-implementable nudges to steer human into future-oriented discounting. Second, macroeconomic modelling highlights countries’ different economic prospects on a warming globe in order to find a redistribution of benefits and burdens of climate change to share the gains and losses of a warming globe equally within society, between countries and over time. Third, a creative financialization strategy is introduced in bonds that help weight the burden of climate change more equally between today’s and tomorrow’s society.
    Keywords: Climate Bonds, Climate Change, Economics of the Environment, Ecotax, Environmental Justice, Environmental Governance, Fiscal Policy, Green New Deal, Monetary Policy, Multiplier, Sustainability, Teaching
    Date: 2021–05
  37. By: Cheng, Zhiming (University of New South Wales); Tani, Massimiliano (University of New South Wales); Wang, Haining (Sun Yat-Sen University)
    Abstract: We use the 2012-2018 China Family Panel Studies data to examine the relationship between household energy poverty and an individual’s probability of becoming an entrepreneur. Consistent with the theory of underdog entrepreneurship that negative personal circumstances can foster self-reliance, resourcefulness and other skills and personality traits conducive to entrepreneurship, we find that spending a higher share of household income on energy consumption or being energy poor increases the probability of being an entrepreneur. The results are robust to various checks, including alternative measures of energy poverty, non-linear effects of the share of energy spending in household income, past entrepreneurial experience, alternative estimation methods and potential omitted variable bias. We also explore the channels through which energy poverty influences whether one chooses to become an entrepreneur. We find that cognitive functions, mental health and self-confidence negatively mediate, while self-belief, extroversion and openness positively mediate, the relationship between energy poverty and entrepreneurship.
    Keywords: energy poverty, entrepreneurship, China
    JEL: I32 L26 Q41
    Date: 2021–07
  38. By: Nguyen Thang Dao
    Abstract: We set up a model with intergenerational bequest transfers and climate damage on the wealth of heterogeneous households. We show that, under credit market imperfections and depending on wealth distribution across households, a balanced budget climate policy may widen the wealth inequality gap between the rich and poor. Climate policy may create positive effects on the wealth of households, but these effects are asymmetric across households in terms of both magnitude and the transmission of gains from a climate policy within households. The gains of the poor from a climate policy are mainly transmitted into improving living standards and the investment in human capital due to the higher marginal return to education investment. By contrast, the gains of the rich from a climate policy are transmitted biasedly into physical capital accumulation and thereby enhance their monopolistic position in the production of intermediate inputs. We show that, for any climate policy, there exists a corresponding threshold of aggregate physical capital. When the aggregate physical capital of the economy exceeds this threshold, the corresponding climate policy may widen the intergenerational bequest transfers among heterogeneous households, thereby contributing to widening the wealth inequality gap between the rich and poor in the long run.
    Date: 2021–08
  39. By: Lyu, Chenyan (Copenhagen School of Energy Infrastructure, Department of Economics, Copenhagen Business School)
    Abstract: China accounts for the largest share of the world’s total greenhouse gas emissions. The scale and growth of industrial activities and energy consumption in China explain the high level of emissions. Achieving “carbon neutrality” through administrative means can be effective but also costly and inefficient. The emission trading scheme is a way to put a price on carbon. The absence of such a mechanism could let low efficiency continue, delay the adoption of clean energy practices, risk a shortage of energy, and even allow corruption in regulation of emissions. In 2013, the government introduced pilot emission trading schemes; and a national ETS, which has started trading since June 2021, is becoming the world’s largest carbon market. This paper focuses on the fragmentation of and integration levels within China’s regional Emission Trading Schemes (ETSs) and the potential models the regional schemes — in Beijing, Shanghai, Shenzhen, Hubei, and Guangdong — offer for national effectiveness. The empirical results from this study suggest the general low level of co-integration in China’s ETS pilots within the sample period may be due to the different economic development levels, energy structures, and degrees of government supervision in each pilot as well as different choices of sector coverage and market threshold in regional ETSs. As the national ETS is at a key stage of construction, greater attention should be paid to exploring reasons for differences among the regional pilot carbon markets, to improve market mechanisms.
    Keywords: Carbon markets; China’s regional emissions trading; Emission allowances; Market architecture; Cointegration
    JEL: C32 E44 Q43 R11
    Date: 2021–08–05
  40. By: Tyler, Emily; Hochstetler, Kathryn
    Abstract: Strong climate institutional governance is necessary for countries to meet their international climate mitigation commitments. This article shows that while South Africa steadily created climate institutions up to 2011, these failed to take hold in the following years. Also, despite the systemically critical energy sector dominating the emissions profile, these climate institutions had no purchase over it. This situation is largely due to South Africa’s political economy of energy, which gave powerful actors the sustained ability to block meaningful institutionalisation of decarbonisation in the energy sector. As a result, South Africa’s climate institutions play few of the roles expected for successful institutionalization of climate action, with energy institutions instead playing a shadow climate governance role. This case suggests that conceptions of climate institutional governance in countries where single sectors dominate in emissions and power must accommodate the roles of institutions affecting climate outcomes despite this not being their primary objective.
    Keywords: climate institutions; just transition; minerals-energy complex; socio-economic transformation; South Africa; 19-1905-153965-CLS
    JEL: R14 J01
    Date: 2021–07–09
  41. By: Nicholas Ryan (Cowles Foundation, Yale University)
    Abstract: Green energy is produced by relationship-speciï¬ c assets that are vulnerable to hold-up if contracts are not strictly enforced. I study the role of counterparty risk in the procurement of green energy using data on the universe of solar procurement auctions in India. The Indian context allows clean estimates of how risk affects procurement, because solar power plants set up in the same states, by the same ï¬ rms, are procured in auctions variously intermediated by either risky states themselves or the central government. I ï¬ nd that: (i) the counterparty risk of an average state increases solar energy prices by 10%; (ii) the intermediation of the central government eliminates this risk premium; (iii) higher prices due to risk reduce investment, because state demand for green energy is elastic. The results suggest that the risk of hold-up places developing countries at a disadvantage in the procurement of green energy.
    JEL: L14 O13 Q42
    Date: 2020–06
  42. By: Sharma, Rajesh; Shahbaz, Muhammad; Sinha, Avik; Vo, Xuan Vinh
    Abstract: The growing size of stock market in the South Asian countries might have contributed to raising the level of industrial production and energy consumption. This upturned energy usage might have widened the scope for carbon emissions because these nations heavily rely on fossil fuels. In this milieu, therefore, in the present study, we assessed the impacts of stock market development, per capita income, trade expansion, renewable energy solutions, and technological innovations on carbon intensity in the four South Asia countries from 1990-2016. The empirical results based on the CS-ARDL approach revealed that stock market development, per capita income, and trade expansion invigorated carbon intensity in the South Asian countries. On the contrary, the increased usage of renewable energy solutions and technological advancement helped in reducing the energy-led carbon intensity. Further, the interaction of stock market with renewable energy, and subsequently with technological advancement delivered insignificant coefficients, which indicates the inefficacy of renewable energy and technological advancement in regulating stock market-led carbon intensity during the study period. Therefore, by considering the need for complementarity between economic growth and environmental targets, we proposed a multipronged policy framework, which may help the selected countries to attain the Sustainable Development Goals, with a special focus on SDG 7, 8, 9, and 13.
    Keywords: Stock Market Development; Carbon Intensity; South Asian Countries; Technological Innovations; Renewable Energy; CS-ARDL
    JEL: Q2 Q3
    Date: 2021
  43. By: Caroline Orset (Université Paris-Saclay, ECO-PUB - Economie Publique - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CEC - Chaire Economie du Climat - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres)
    Abstract: Despite several financial aids intended to promote the energy transition, the French people continue to buy energy-intensive products and are not interested in improving the energy performance of their homes. We propose a new measure which consists of provision of information to change individual behaviour. Currently, health and the environment are the prime concerns and we propose to encourage individuals to reduce their energy consumption by informing them of the environmental and health consequences linked to energy consumption. To test the validity of our proposal, we use the willingness to pay for more energy efficient equipment and thermal insulation. We conducted an online survey which included messages on the link between environment-energy and health-energy. We showed that it affected households' energy behaviour. We compared this strategy with policies already in place. We found that policies that combined provision of information with a subsidy, increase sales of goods that reduce energy consumption and was the best option from a social welfare perspective.
    Abstract: Malgré plusieurs aides financières destinées à favoriser la transition énergétique, les Français continuent d'acheter des produits énergivores et ne sont pas intéressés par l'amélioration de la performance énergétique de leur logement. Nous proposons une nouvelle mesure qui consiste à fournir des informations pour changer le comportement individuel. Actuellement, la santé et l'environnement sont au cœur des préoccupations et nous proposons d'inciter les particuliers à réduire leur consommation d'énergie en les informant des conséquences environnementales et sanitaires liées à la consommation d'énergie. Pour tester la validité de notre proposition, nous utilisons le consentement à payer pour des équipements plus économes en énergie et une isolation thermique. Nous avons mené une enquête en ligne qui comprenait des messages sur le lien entre environnement-énergie et santé-énergie. Nous avons montré qu'elle affectait le comportement énergétique des ménages. Nous avons comparé cette stratégie avec les politiques déjà en place. Nous avons constaté que les politiques qui combinent information et subvention, augmentent les ventes de biens qui réduisent la consommation d'énergie et constituent la meilleure option du point de vue du bien-être social.
    Keywords: Health and environment,Energy policy,Energy efficiency,Consumer willingness to pay,Politique énergétique,Consentement à payer du consommateur,Efficacité Energétique,Santé et environnement
    Date: 2021
  44. By: Jonathan Colmer; Dajun Lin; Siying Liu; Jay Shimshack
    Abstract: Conventional wisdom suggests that marginal damages from particulate matter pollution are high in less-developed countries because they are highly polluted. Using administrative data on the universe of births and deaths, we explore birthweight and mortality effects of gestational particulate matter exposure in high-pollution yet high-income Hong Kong. The marginal effects of particulates on birthweight are large but we fail to detect an effect on neonatal mortality. We interpret our stark mortality results in a comparative analysis of pollution-mortality relationships across studies. We provide early evidence that marginal mortality damages from pollution are high in less-developed countries because they are less developed, not because they are more polluted.
    JEL: Q53 I15 Q56
    Date: 2021
  45. By: Svenn Jensen; Christian P. Traeger; Christian Träger
    Abstract: Anthropogenic greenhouse gas emissions are changing the energy balance of our planet. Various climatic feedbacks make the resulting warming over the next decades and centuries highly uncertain. We quantify how this uncertainty changes the optimal carbon tax in a stochastic dynamic programming implementation of an integrated assessment model of climate change. We derive a general analytic formula for the “risk premium” governing the resulting climate policy. The formula generalizes simple precautionary savings analysis to more complex economic interactions and it builds the economic intuition for policy making under uncertainty. It clarifies the distinct roles of risk aversion, prudence, characteristics of the damage formulation, and future policy response. We show that an optimal response to uncertainty substantially reduces the risk premium.
    Keywords: climate change, uncertainty, risk premium, precautionary savings, prudence, climate policy, dynamic programming, integrated assessment, DICE, recursive utility
    JEL: Q54 Q00 D90 C63
    Date: 2021
  46. By: Frank Geels (The Productivity Institute, Alliance Manchester Business School, The University of Manchester); Guillermo Ivan Pereira (The Productivity Institute, Alliance Manchester Business School, The University of Manchester); Jonatan Pinkse (The Productivity Institute, Alliance Manchester Business School, The University of Manchester)
    Keywords: green recovery, Covid-19
  47. By: Raúl Gutiérrez-Meave; Juan Rosellón; Luis Sarmiento
    Abstract: The analysis of local environmental policies is essential when evaluating the consistency of national public policies vis-à-vis the compliance of global agreements to reduce climate change. This study explores one of these policies; the 2021 Mexican reform to change electric power dispatch from a marginal-cost-based to a command and control physical system prioritizing power generation from the state power company. The new law forces the dispatch of the state company power facilities before private power producers. We use the GENeSYS-MOD techno-economic model to determine the reform’s effect on the power system’s generation mix, cost structure, and anthropogenic emissions. For this, we optimize the model under three distinct scenarios; a business-as-usual scenario with no changes to the merit order, a model with the new physical order dispatch, and an additional case where in addition to the shift to the physical dispatch, we reduce the price of fuel oil below natural gas prices to simulate the current behavior of the power company. It is relevant to note that we optimize the energy system without any assumption regarding renewable targets or climate goals because of political uncertainty and the need of pinpoint the effect of the merit order change while avoiding possible variations in the state-space arising from other constraints. Our results show that by 2050, the new dispatch rule increases the market power of the state company to 99% of total generation and decreases the share of renewable technologies in the generation mix from 72% to 51%. Additionally, cumulative power sector emissions increase by 563 Megatons of CO2, which with the current cost of carbon in the European Emissions Trading System translates to around 36 billion Euros
    Keywords: Merit Order Rules; Power Sector; Energy Reform; Mexico; GENeSYS-MOD
    JEL: Q42 Q47 Q48
    Date: 2021
  48. By: Edwin van der Werf; Herman R. J. Vollebergh; Johanna Vogel
    Abstract: Limiting global warming to no more than 2°C requires global large-scale deployment of low-carbon and negative emissions technologies. This requires the development of new eco-innovations and the diffusion of new and existing ones. Existing portfolios of environmental and technology policy instruments, however, may not be up to this task. In this paper, we develop an evaluative framework for the assessment of existing and new policy instruments for the successful development and deployment of eco-innovations. Our evaluative framework considers focus, scope, strictness, coherence and timing as key criteria for the evaluation of policy instruments for the transition to a low-carbon economy. We apply our framework to the residential and commercial (buildings) sector in an ambitious country, Austria.
    Keywords: climate change mitigation policy, policy instruments, eco-innovation
    JEL: H23 Q54 Q58
    Date: 2021
  49. By: Baer, Moritz; Campiglio, Emanuele; Deyris, Jérôme
    Abstract: This article studies how institutional dynamics might affect the implementation of climate-related financial policies. First, we propose a three-dimensional framework to distinguish: i) motives for policy implementation (prudential or promotional); ii) policy instruments (informational, incentive or coercive); and iii) implementing authorities (political or delegated). Second, we use this framework to show how sustainable financial interventions in certain jurisdictions - most notably, Europe - rely solely on informational policies to achieve both promotional and prudential objectives. Policymakers in other jurisdictions - e.g., China - also implement incentive or coercive financial policies to achieve promotional objectives. Third, we identify two main institutional explanations for this European ‘promotional gap’: i) limited control of political authorities on financial dynamics; and ii) strong powers and independence of delegated authorities. This governance configuration leads to an institutional deadlock in which only measures fitting with both political and delegated authorities’ objectives can be implemented. Finally, we discuss the scenarios that might originate from the current institutional setting. We identify three possible evolutionary paths: i) a drift towards a green financial technocracy; ii) a re-politicization of delegated authorities; iii) a move towards fiscal-monetary coordination.
    Keywords: sustainable finance; climate change; low-carbon transition; central banks; financial supervisors; delegation; Centre for Climate Change Economics and Policy; 853050
    JEL: E44 E58 G28 G18 G14
    Date: 2021–04–22
  50. By: Maximilian Konradt (IHEID, Graduate Institute of International and Development Studies, Geneva); Beatrice Weder di Mauro (IHEID, Graduate Institute of International and Development Studies, Geneva)
    Abstract: What is the effect of climate policies on inflation and economic activity? Answering this question is critical for central banks trying to achieve price stability. This paper studies the experience from existing carbon taxes in Canada and Europe, introduced over the last 30 years. Based on two separate empirical approaches, we find that carbon taxes do not have to be inflationary and may even have deflationary effects. In particular, our evidence suggests that the increase in energy prices was more than offset by a fall in the prices of services and other non-tradables. Our results are robust for Europe and Canada, as well as a number of different country groupings. At least in case of British Columbia, a contraction in household incomes and expenditures, in particular among the richer households, could explain the deflationary effect.
    Keywords: Carbon taxes; carbon pricing; inflation; monetary policy; climate change
    JEL: E31 E50 Q54 Q43
    Date: 2021–08–12

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