nep-ene New Economics Papers
on Energy Economics
Issue of 2021‒08‒23
fifty-two papers chosen by
Roger Fouquet
London School of Economics

  1. Designing Fuel-Economy Standards in Light of Electric Vehicles By Kenneth Gillingham
  2. Headwinds and Tailwinds: Implications of Inefficient Retail Energy Pricing for Energy Substitution By Severin Borenstein; James B. Bushnell
  3. Long-Term Resource Adequacy in Wholesale Electricity Markets with Significant Intermittent Renewables By Frank A. Wolak
  4. Consistent Inequality across Germany? Exploring Spatial Heterogeneity in the Unequal Distribution of Air Pollution By Rüttenauer, Tobias; Best, Henning
  5. On the Short-Term Impact of Pollution: The Effect of PM 2.5 on Emergency Room Visits By Dardati, Evangelina; de Elejalde, Ramiro; Giolito, Eugenio
  6. Why Are Pollution Damages Lower in Developed Countries? Insights from High-Income, High-Particulate Matter Hong Kong By Colmer, Jonathan; Lin, Dajun; Liu, Siying; Shimshack, Jay
  7. Central bank mandates, sustainability objectives and the promotion of green finance By Dikau, Simon; Volz, Ulrich
  8. Money or Power? Financial Infrastructure and Optimal Policy By Susanna B. Berkouwer; Pierre E. Biscaye; Eric Hsu; Oliver W. Kim; Kenneth Lee; Edward Miguel; Catherine Wolfram
  9. What Do You Think About Climate Finance? By Johannes Stroebel; Jeffrey Wurgler
  10. Climate Change Uncertainty Spillover in the Macroeconomy By Michael Barnett; William Brock; Lars P. Hansen
  11. Do Market Failures Create a ‘Durability Gap’ in the Circular Economy? By Don Fullerton; Shan He
  12. Priorities for renewable energy investment in fragile states By Sacchetto, Camilla; Stern, Nicholas; Taylor, Charlotte
  13. Greening the Swiss National Bank's Portfolio By Rüdiger Fahlenbrach; Eric Jondeau
  14. Rethinking carbon neutrality goal for countering climate change By Nguyen, Minh-Hoang
  15. Klimaneutralität in Unternehmen: Zehn Empfehlungen für die Umsetzung By Kreibich, Nico; Teubler, Jens; Kühlert, Markus; Braun, Nadine; Brandemann, Victoria
  16. Economics of co-firing rice straw in coal power plants in Vietnam By an Ha Truong; Minh Ha-Duong
  17. Reconfiguring actors and infrastructure in city renewable energy transitions: a regional perspective By Christina E. Hoicka; Jessica Conroy; Anna Berka
  18. The Emerging Hydrogen Economy and its Impact on LNG By Al-Kuwari, Omran; Schönfisch, Max
  19. What do you think about climate change? By Donatella Baiardi
  20. Natural Resource Dependence and Monopolized Imports By Rabah Arezki; Ana Margarida Fernandes; Federico Merchán; Ha Nguyen; Tristan Reed
  21. Modeling ex-ante risk premia in the oil market By Georges Prat; Remzi Uctum
  22. Scaling energy investments in fragile states By Sacchetto, Camilla; Logan, Sarah
  23. Economists' erroneous estimates of damages from climate change By Stephen Keen; Timothy M. Lenton; Antoine Godin; Devrim Yilmaz; Matheus Grasselli; Timothy J. Garrett
  24. Evaluation of the Liberia Power Compact: Interim Findings By Candace Miller
  25. Does Energy Diversification Cause an Economic Slowdown? Evidence from a Newly Constructed Energy Diversification Index By Giray Gozgor; Sudharshan Reddy Paramati
  26. Energy market liberalisation in Greece: Structures, policy and prospects By Vlados, Charis; Chatzinikolaou, Dimos; Kapaltzoglou, Fotein
  27. Pourquoi le recours à l’éco-prêt à taux zéro est-il si faible ? By Louis-Gaëtan Giraudet
  28. Renewable Energy Targets and Unintended Storage Cycling: Implications for Energy Modeling By Martin Kittel; Wolf-Peter Schill
  29. Quantifying the Uncertainties in Fuel Cost and Greenhouse Gas Mitigation with Cellulosic Biofuels By Lee, Yuanyao; Kent, Jeffery; Shi, Rui; Hudiburg, Tara; Guest, Jeremy; Khanna, Madhu
  30. Individual preferences towards nuclear energy: the transient residency effect By Contu, Davide; Mourato, Susana; Kaya, Ozgur
  31. Regulating Conglomerates in China: Evidence from an Energy Conservation Program By Qiaoyi Chen; Zhao Chen; Zhikuo Liu; Juan Carlos Suárez Serrato; Daniel Xu
  32. Between- and Within-Country Distributional Impacts from Harmonizing Carbon Prices in the EU By Florian Landis; Gustav Fredriksson; Sebastian Rausch
  33. Who Are the Citizens of the French Convention for Climate? By Adrien Fabre; Bénédicte Apouey; Thomas Douenne; Jean-Michel Fourniau; Louis-Gaëtan Giraudet; Jean-François Laslier; Solène Tournus
  34. Inferring Economic Condition Uncertainty from Electricity Big Data By Zhengyu Shi; Libo Wu; Haoqi Qian; Yingjie Tian
  35. SimUAM: A Comprehensive Microsimulation Toolchain to Evaluate the Impact of Urban Air Mobility in Metropolitan Areas By Yedavalli, Pavan; Burak Onat, Emin; Peng, Xi; Sengupta, Raja; Waddell, Paul; Bulusu, Vishwanath; Xue, Min
  36. Beyond Pigouvian Taxes: A Worst Case Analysis By Moshe Babaioff; Ruty Mundel; Noam Nisan
  37. Interstate Protectionism: The Case of Solar Renewable Energy Credits By Jed J. Cohen; Levan Elbakidze; Randall Jackson
  38. The Economic Performance of Hydropower Dams Supported by the World Bank Group, 1975–2015 By Saule Baurzhan; Glenn Jenkins; Godwin O. Olasehinde-Williams
  39. Getting warmer: fuel poverty, objective and subjective health and well-being By Davillas, A; Burlinson, A.; Liu, H-H.
  40. Carbon Pricing and Power Sector Decarbonisation: Evidence from the UK By Marion Leroutier
  41. Macroeconomic and microeconomic environmental and energy policies: are they effective for improving environmental performance of listed companies? By Donatella Baiardi; Maria Gaia Soana
  42. Green Quantitative Easing as Intergenerational Climate Justice: On Political Theory and Pareto Efficiency in Reversing Now Human-Caused Environmental Damage By Josep Ferret Mas; Alexander Mihailov
  43. Pricing Carbon in a Multi-Sector Economy with Social Discounting By Oliver Kalsbach; Sebastian Rausch
  44. No country is an island. International cooperation and climate change. By Ferrari Massimo,; Pagliari Maria Sole,
  45. The multi-level context for local climate governance in Germany: The role of the federal states By Eckersley, Peter; Kern, Kristine; Haupt, Wolfgang; Müller, Hannah
  46. Les marchés internationaux du pétrole et du gaz naturel By Catherine Locatelli
  47. Soaking Up the Sun: Battery Investment, Renewable Energy, and Market Equilibrium By R. Andrew Butters; Jackson Dorsey; Gautam Gowrisankaran
  48. Guinea: Selected Issues By International Monetary Fund
  49. Structural Transformation Options of the Saudi Economy Under Constraint of Depressed World Oil Prices By Salaheddine Soummane; F. Ghersi; Franck Lecocq
  50. Costos y beneficios de la carbono-neutralidad en Perú: Una evaluación robusta By Jairo Quirós-Tortós; Guido Godínez- Zamora; Daniel de la Torre Ugarte; Carlos Heros; Juan Lazo; Elías Ruiz; Berioska Quispe; Daniella Canseco; Freddy Garro; Jimena Mora; Lorenzo Eguren; Milagros Sandoval; Silke Campos; Micol Salmeri; Richard Baron; Jaime Fernandez-Baca; Ana Saori Iju Fukushima; Valentina Saavedra; Adrien Vogt-Schilb
  51. Green Technology Policies versus Carbon Pricing: An Intergenerational Perspective By Sebastian Rausch; Hidemichi Yonezawa
  52. Business Cycles and Environmental Policy: Literature Review and Policy Implications By Barbara Annicchiarico; Stefano Carattini; Carolyn Fischer; Garth Heutel

  1. By: Kenneth Gillingham
    Abstract: Electric vehicles are declining in cost so rapidly that they may claim a large share of the vehicle market by 2030. This paper examines a set of practical regulatory design considerations for fuel-economy standards or greenhouse gas standards in the context of highly uncertain electric vehicle costs in the next decade. The analysis takes a cost-effectiveness approach and uses analytical modeling and simulation to develop insight. I show that counting electric vehicles under a standard with a multiplier or assuming zero upstream emissions can reduce electric vehicle market share by weakening the standards. Further, there are tradeoffs from implementing a backstop conventional vehicle standard along with a second standard that also includes electric vehicles, but such a backstop offers the possibility of ensuring that low-cost conventional vehicle technologies are exploited.
    JEL: H23 Q48 Q53 Q54 Q58 R48
    Date: 2021–07
  2. By: Severin Borenstein; James B. Bushnell
    Abstract: Electrification of transportation and buildings to reduce greenhouse gas (GHG) emissions requires massive switching from natural gas and refined petroleum products. All three end-use energy sources are mispriced due in part to the unpriced pollution they emit. Natural gas and electricity utilities also face the classic natural monopoly challenge of recovering fixed costs while maintaining efficient pricing. We study the magnitude of these distortions for electricity, natural gas, and gasoline purchased by residential customers across the continental US. We find that the net distortion in pricing electricity is much greater than for natural gas or gasoline. In most of the country, residential electricity prices are well above social marginal cost (private marginal cost plus unpriced externalities), while in some areas with large shares of coal-fired generation, prices are below SMC. Combining our estimates of marginal price and SMC for each of the fuels with a large survey of California households' energy use, we calculate the distribution of annual fuel costs for space heating, water heating, and electric vehicles under actual pricing versus setting price at SMC. We find that moving prices for all three fuels to equal their SMC would significantly increase the incentive for Californians to switch to electricity for these energy services.
    JEL: H23 L51 L71 L94 L95
    Date: 2021–08
  3. By: Frank A. Wolak
    Abstract: Growing amounts of intermittent renewable generation capacity substantially increases the complexity of determining whether sufficient energy will be available to meet hourly demands throughout the year. As the events of August 2020 in California and February 2021 in Texas demonstrate, supply shortfalls can have large economic and public health consequences. An empirical analysis of these two events demonstrates that similar supply shortfalls are likely to occur in the future without a paradigm shift in how long-term resource adequacy is determined for an electricity supply industry with significant intermittent renewables. An alternative approach to determining long-term resource adequacy that explicitly recognizes the characteristics of different generation technologies is outlined and its properties explored relative to current approaches.
    JEL: L22 L23 Q2 Q4
    Date: 2021–07
  4. By: Rüttenauer, Tobias; Best, Henning
    Abstract: The topic of environmental inequality, in general describing the unequal distribution of environmental pollution across different social groups, has received increasing attention in Germany and other European countries during the past decade. Though research points towards a disadvantage of minorities in Europe, conclusions regarding the extent of this disadvantage vary across studies. In this contribution, we thus examine whether the extent of environmental inequality depends on the measure of pollution and the spatial scale. We connect spatially aggregated data of the 2011 German census to geographical information of industrial facilities and pollution estimates of German-wide diffusion models. We then use spatial regression models to identify the disadvantage of foreign minorities across these measures. Furthermore, we perform geographically weighted regressions to scrutinize the role of the spatial scale and location. We find that the pollution minority gap is stronger for estimates based on industrial facilities than it is for general pollution models, though there is a consistent disadvantage of minorities within municipalities. Furthermore, we demonstrate that there is strong heterogeneity in the association between the share of foreign minorities and air pollution according to the spatial scale and location of the research area.
    Date: 2021–08–11
  5. By: Dardati, Evangelina (Centro de Estudios Públicos); de Elejalde, Ramiro (Universidad Alberto Hurtado); Giolito, Eugenio (Universidad Alberto Hurtado)
    Abstract: In this paper, we study the effect of fine particulate matter (PM 2.5) exposure on Emergency Room (ER) visits in Chile. Our identification strategy exploits daily PM 2.5 variation within a hospital-month-year combination. Unlike previous papers, our data allow us to study the impact of high levels of pollution while controlling for avoidance behavior. We find that a one standard deviation increase in PM 2.5 increases respiratory ER visits by 1.4 percent. This effect is positive for all age groups but is stronger for children (less than five years old) and the elderly (more than 65 years old). Moreover, we find that the effects are stronger in geographical areas in which the share of emissions from residential wood burning is more than 75 percent. Finally, our results are robust to instrumenting pollution using wind direction and speed and to controlling for other pollutants.
    Keywords: air pollution, PM 2.5, emergency room visits
    JEL: I12 I18 Q51 Q53
    Date: 2021–07
  6. By: Colmer, Jonathan (University of Virginia); Lin, Dajun (American Institutes for Research); Liu, Siying (Amazon); Shimshack, Jay (University of Virginia)
    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.
    Keywords: particulate matter, early childhood, comparative analysis
    JEL: Q53 I15 Q56
    Date: 2021–07
  7. By: Dikau, Simon; Volz, Ulrich
    Abstract: This article examines how addressing climate-related risks and supporting mitigation and adaptation policies fit into central bank mandates. We conduct an analysis of mandates and objectives using the IMF's Central Bank Legislation Database and compare these to sustainability-related policies central banks have adopted in practice. Out of 135 central banks, only 12% have explicit sustainability mandates, while 40% are mandated to support the government's policy priorities, which mostly include sustainability goals. However, given that climate risks can directly affect central banks' traditional core responsibilities, all institutions ought to incorporate climate-related physical and transition risks into their policy frameworks to safeguard macro-financial stability.
    Keywords: central bank mandates; central banks; green finance; ES/R009708/1; UKRI fund
    JEL: F3 G3
    Date: 2021–06–01
  8. By: Susanna B. Berkouwer; Pierre E. Biscaye; Eric Hsu; Oliver W. Kim; Kenneth Lee; Edward Miguel; Catherine Wolfram
    Abstract: In response to the Covid-19 crisis, 186 countries implemented direct cash transfers to households, and 181 introduced in-kind programs that lowered the cost of utilities such as electricity, water, transport, and mobile money. Do cash or in-kind transfers generate greater welfare improvements? And, does a country’s financial infrastructure affect optimal aid disbursement? Through a parallel set of surveys in two urban regions in Africa—with comparable education, cell phone ownership, and electricity connectivity—we show that optimal government aid disbursement hinges on financial infrastructure. In line with economic theory favoring direct cash transfers, in a randomized experiment in Kenya 95% of urban recipients prefer mobile money over electricity transfers of a similar monetary value. But Kenya is an outlier with high mobile money adoption: this increases its value and reduces transaction costs of buying electricity credit. By contrast, in Ghana—where mobile money is less widespread and the transaction costs for buying electricity are higher—half of recipients prefer electricity transfers, and many are willing to forego significant value to receive electricity instead of mobile money. These results have several important policy implications. First, the optimal government policy in response to an economic crisis is not uniform: cash and in-kind transfers have different advantages that make each suitable for specific contexts. Second, the adoption of modern financial technologies will likely increase the efficiency of government cash transfer programs, even as in-kind transfers continue to be preferred in settings where mobile money uptake is slow. Finally, giving recipients a choice harnesses valuable local information that a policy maker may not have access to.
    JEL: G23 O38 Q38
    Date: 2021–07
  9. By: Johannes Stroebel; Jeffrey Wurgler
    Abstract: We survey 861 finance academics, professionals, and public sector regulators and policy economists about climate finance topics. They identify regulatory risk as the top climate risk to businesses and investors over the next five years, but they view physical risks as the top risk over the next 30 years. By an overwhelming margin, respondents believe that asset prices underestimate climate risks. We also tabulate opinions about the correlation between growth and climate change; social discount rates appropriate for projects that mitigate the effects of climate change; most influential forces for reducing climate risks; and, most important research topics.
    JEL: G12 G14 G32 H43 Q54 Q56
    Date: 2021–08
  10. By: Michael Barnett; William Brock; Lars P. Hansen
    Abstract: The design and conduct of climate change policy necessarily confronts uncertainty along multiple fronts. We explore the consequences of ambiguity over various sources and configurations of models that impact how economic opportunities could be damaged in the future. We appeal to decision theory under risk, model ambiguity and misspecification concerns to provide an economically motivated approach to uncertainty quantification. We show how this approach reduces the many facets of uncertainty into a low dimensional characterization that depends on the uncertainty aversion of a decision-maker or fictitious social planner. In our computations, we take inventory of three alternative channels of uncertainty and provide a novel way to assess them. These include i) carbon dynamics that capture how carbon emissions impact atmospheric carbon in future time periods; ii) temperature dynamics that depict how atmospheric carbon alters temperature in future time periods; iii) damage functions that quantify how temperature changes diminish economic opportunities. We appeal to geoscientific modeling to quantify the first two channels. We show how these uncertainty sources interact for a social planner looking to design a prudent approach to the social pricing of carbon emissions.
    JEL: D81 E61 G12 G18 Q51 Q54
    Date: 2021–07
  11. By: Don Fullerton; Shan He
    Abstract: Circular Economy literature recommends longer lasting products, in order to reduce pollution from extraction, production, and disposal. Our economic analysis finds conditions where consumers choose lives that are too short – a “durability gap”. Then policies targeting durability raise welfare. While externalities are corrected by Pigovian taxes that ignore durability, raising the output tax nonetheless induces consumers to pay more for goods that last longer. Second, if the tax is suboptimal, a durability mandate raises welfare. Third, internalities have ambiguous effects. Fourth, a social discount rate less than private discount rate is the strongest case for policy to favor durability.
    JEL: H21 H23 Q58
    Date: 2021–07
  12. By: Sacchetto, Camilla; Stern, Nicholas; Taylor, Charlotte
    JEL: R14 J01
    Date: 2020–11–04
  13. By: Rüdiger Fahlenbrach (Ecole Polytechnique Fédérale de Lausanne; Swiss Finance Institute; European Corporate Governance Institute (ECGI)); Eric Jondeau (University of Lausanne - Faculty of Business and Economics (HEC Lausanne); Swiss Finance Institute)
    Abstract: We analyze the carbon footprint and emissions of the Swiss National Bank's (SNB) U.S. equity portfolio and compare its carbon performance to those of the world's largest asset manager, BlackRock, and to the Norwegian Government Pension Fund Global (GPFG). The SNB portfolio does as well as BlackRock's but has a significantly worse carbon footprint than the portfolio of GPFG. Few firms are responsible for much of the carbon emissions of the SNB portfolio so that carbon conscious investment approaches have a large impact on portfolio emissions but little impact on performance, diversification, or tracking error. We explore several avenues to reduce the carbon footprint of the SNB's portfolio, while not altering its financial performance. If the SNB excluded the firms with the highest carbon intensity rep- resenting 1% of the portfolio value and reinvested in the companies with the lowest intensity in the same sector, the total financed carbon emissions would be reduced by 22% in 2019, with no impact on the portfolio's financial performance.
    Keywords: Portfolio carbon footprint, Decarbonized financial investment
    JEL: G11
    Date: 2021–08
  14. By: Nguyen, Minh-Hoang
    Abstract: Inspired by the semiconducting principle, I propose two ultimate goals to counter climate change and heal the environment as substitutes for the carbon neutrality objective. The first ultimate goal is to eliminate the negative anthropogenic impacts (or human-made eco-deficits) on nature. The second ultimate goal is to heal the environment or increase the human-made eco-surplus. Here, the NEV growth has to be considered with equivalent priority as economic growth, or even more in certain circumstances.
    Date: 2021–08–13
  15. By: Kreibich, Nico; Teubler, Jens; Kühlert, Markus; Braun, Nadine; Brandemann, Victoria
    Abstract: Immer mehr Unternehmen verkünden, klimaneutral sein zu wollen und zahlreiche Firmen bieten bereits klimaneutrale Produkte oder Dienstleistungen an: Von der klimaneutralen Paketzustellung bis zur Flugreise. Doch was bedeuten die Neutralitätsziele der Unternehmen genau? Ist das gesetzte Ziel ambitioniert? Und welche Rolle spielt Offsetting, also der Ankauf von Klimaschutzzertifikaten und deren Anrechnung auf das eigene Klimaschutzziel? Die hinter den verkündeten Zielen stehenden Ansätze sind häufig nur schwer nachvollziehbar. Vor diesem Hintergrund gibt der vorliegende Zukunftsimpuls zehn Empfehlungen für die Festlegung und Umsetzung von Neutralitätszielen. Die Autorinnen und Autoren sprechen sich dabei unter anderem für die Nutzung einer robusten Datenbasis als Grundlage für Neutralitätsziele aus, betonen die Bedeutung einer transparenten Kommunikation und zeigen auf, welche Rolle Offsetting spielen sollte. So sollten angekaufte Klimaschutz-Zertifikate einen möglichst begrenzten Beitrag zur Zielerfüllung leisen und ausschließlich zum Ausgleich von Emissionen genutzt werden, die nicht reduziert oder vermieden werden können. Insgesamt sollten Neutralitätsziele nicht zum alleinigen Kriterium für ambitionierten Klimaschutz von Unternehmen gemacht werden, sie stellen vielmehr ein Baustein einer weitaus umfassenderen unternehmerischen Klimaschutzstrategie dar.
    Date: 2021
  16. 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
  17. By: Christina E. Hoicka (University of Victoria, Canada); Jessica Conroy (York University, Canada); Anna Berka (Massey University, New Zealand)
    Abstract: Cities as large centres of energy demand and population are important spatially and materially in a renewable energy transition. This study draws on available literature on material dimensions, energy decentralization, and regional approaches to provide a conceptual framework to analyse emerging city renewable energy transition plans for their material- and place-based actor scalar strategies. This framework outlines how the increase in renewable energy provided to cities results in new locations of productivity, interscalar relationships between new and centralized actors, and socio-economic outcomes. We use this to analyse 47 ambitious renewable energy transition plans in densely populated cities. Empirically, this study confirms that, for the most part, regions are important emerging actors in the decentralization of energy systems in a renewable energy transition; that city renewable energy transitions involve the forging of new economic relationships between cities and neighbouring communities and regions, and, as the community energy literature emphasises, that the involvement of a wide range of civic and local actors is important in shaping renewable energy transitions for cities. Further research can investigate how the institutional context is shaping these distinct actor material strategies and emerging interscalar relationships across regions. The socio-economic outcomes, particularly as they relate to new economic relationships between cities and the surrounding region and the re-spatialization of productivity and benefits, should also be examined.
    Keywords: Renewable energy transition, cities, decentralization, regional approaches, carbon neutral
    Date: 2021
  18. By: Al-Kuwari, Omran (Institute for Sustainable Resources, University College London (UCL)); Schönfisch, Max (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI))
    Abstract: Hydrogen is gaining prominence as a critical tool for countries to meet decarbonisation targets. The main production pathways are based on natural gas or renewable electricity. LNG represents an increasingly important component of the global natural gas market. This paper examines synergies and linkages between the hydrogen and LNG values chains and quantifies the impact of increased low-carbon hydrogen production on global LNG flows. The analysis is conducted through interviews with LNG industry stakeholders, a review of secondary literature and a scenario-based assessment of the potential development of global low-carbon hydrogen production and LNG trade until 2050 using a novel, integrated natural gas and hydrogen market model. The model-based analysis shows that low-carbon hydrogen production could become a significant user of natural gas and thus stabilise global LNG demand. Furthermore, commercial and operational synergies could assist the LNG industry in developing a value chain around natural gas-based low-carbon hydrogen.
    Keywords: Hydrogen; LNG; natural gas
    JEL: Q40 Q42 Q49
    Date: 2021–08–10
  19. By: Donatella Baiardi (Center for European Studies, University of Parma, Italy; Rimini Centre for Economic Analysis)
    Abstract: To answer this question, this paper reviews the huge and growing body of empirical literature on climate change awareness, and summarizes insights emerging from a critical review of about 140 papers. In particular, this survey provides (i) a historical overview of climate change awareness worldwide, (ii) a guide to the most widely used datasets, with a peculiar attention to the question wording employed to measuring climate change awareness when the analysis is performed at individual level; (iii) a detailed review of the main socio-economic and climatological determinants of climate change awareness, such as age, gender, education, political values, experience of extreme weather conditions, social and institutional trust and the stage of development of the country where people live; and (iv) a summary of the main implications of these findings in terms of public policy responses.
    Keywords: climate change awareness, individual perceptions, question wording, socio-economic determinants, policy implications
    Date: 2021–08
  20. By: Rabah Arezki; Ana Margarida Fernandes; Federico Merchán; Ha Nguyen; Tristan Reed
    Abstract: This paper explores the effect of natural resource dependence on market concentration of imports. Using a new panel database for importing firms in developing and emerging market economies, the paper shows that higher natural resource dependence is associated with larger market concentration of imports and with higher tariffs. The effect on the concentration of imports is found to be more pronounced for exporters of ‘point-based’ resources, imports of primary and consumption goods than for capital goods and is associated with higher domestic prices and lower consumption expenditure. Results suggest a novel channel for the resource curse stemming from the “monopolization” of imports.
    Keywords: imports, market concentration, natural resources, resource curse
    JEL: D20 F10 L10 O10 Q00
    Date: 2021
  21. By: Georges Prat (EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique); Remzi Uctum (EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Using survey-based data we show that oil price expectations are not rational, implying that the ex-ante premium is a more relevant concept than the widely popular expost premium. We propose for the 3-and 12-month horizons a portfolio choice model with risky oil assets and a risk-free asset. At the maximized expected utility the risk premium is defined as the risk price times the expected oil return volatility. A state-space model, where the risk prices are represented as stochastic unobservable components and where expected volatilities depend on historical squared returns, is estimated using Kalman filtering. We find that the representative investor is risk seeking at short horizons and risk averse at longer horizons. We examine the economic factors driving risk prices whose signs are shown to be consistent with the predictions of the prospect theory. An upward sloped term structure of oil risk premia prevails in average over the period.
    Keywords: oil market,oil price expectations,ex-ante risk premium JEL classification : D81
    Date: 2021–06–03
  22. By: Sacchetto, Camilla; Logan, Sarah
    JEL: N0
    Date: 2021–02–24
  23. By: Stephen Keen; Timothy M. Lenton; Antoine Godin; Devrim Yilmaz; Matheus Grasselli; Timothy J. Garrett
    Abstract: Economists have predicted that damages from global warming will be as low as 2.1% of global economic production for a 3$^\circ$C rise in global average surface temperature, and 7.9% for a 6$^\circ$C rise. Such relatively trivial estimates of economic damages -- when these economists otherwise assume that human economic productivity will be an order of magnitude higher than today -- contrast strongly with predictions made by scientists of significantly reduced human habitability from climate change. Nonetheless, the coupled economic and climate models used to make such predictions have been influential in the international climate change debate and policy prescriptions. Here we review the empirical work done by economists and show that it severely underestimates damages from climate change by committing several methodological errors, including neglecting tipping points, and assuming that economic sectors not exposed to the weather are insulated from climate change. Most fundamentally, the influential Integrated Assessment Model DICE is shown to be incapable of generating an economic collapse, regardless of the level of damages. Given these flaws, economists' empirical estimates of economic damages from global warming should be rejected as unscientific, and models that have been calibrated to them, such as DICE, should not be used to evaluate economic risks from climate change, or in the development of policy to attenuate damages.
    Date: 2021–08
  24. By: Candace Miller
    Abstract: The rehabilitation of MCHPP was successful, but LEC continues to face a grave financial situation. However, the management services contract (MSC) Electricity Supply Board International (ESBI) has achieved some success. Liberians value and demand “LEC current.â€
    Keywords: Liberia Power Compact
  25. By: Giray Gozgor; Sudharshan Reddy Paramati
    Abstract: Countries have made considerable efforts to diversify their energy sources from fossil fuels to renewables in the last two decades to achieve sustainable economic development. However, it is widely argued that the countries may experience sluggish economic development during the energy transition period due to structural and functional changes in the economic system. Given this backdrop, this study introduces a new measure of energy diversification. It explores its impact on economic development across the panels of low-income, high-income, European Union (EU), the Organization for Economic Co-operation and Development (OECD), and G20 countries. The study uses data from 1995 to 2018 and utilizes Nonlinear Panel Autoregressive Distributed Lag (NPARDL) method. Our findings confirm that the major economies (including G20) realize positive economic growth with increasing long-run energy diversification. However, some countries (OECD and G20) experience negative economic growth due to energy diversification in the short term. The results also disclosed that energy diversification does not favor economic growth in low-income economies in both the short and long term. Therefore, more precautionary measures to be taken into account while diversifying energy sources.
    Keywords: energy diversification, energy transition, energy mix, economic development, climate change, nonlinear panel ARDL estimations
    JEL: O47 Q01 Q42
    Date: 2021
  26. By: Vlados, Charis (Democritus University of Thrace, Department of Economics); Chatzinikolaou, Dimos (Democritus University of Thrace, Department of Economics); Kapaltzoglou, Fotein (Department of International and European Studies, School of Law)
    Abstract: The ongoing regulatory transformation towards a single European electricity market started several years ago. The rationale of this transformation is that the liberalisation of monopolistic energy structures should lead to the building of sustainable and flexible energy ecosystems, through an energy policy that sets goals in line with the requirements of our epoch, such as sustainable development, energy security, and the promotion of renewable energy sources. In this context, the liberalisation of the electricity market in Greece is explored, which is a complicated case in terms of development as it has only recently begun to exit from a long-term socio-economic crisis and strict adjustment programs. The concepts of energy market liberalisation, energy ecosystems, and energy policy are presented and compared to the main directions of the EU institutional environment and the evolution of the political and institutional framework of Greece. In Greece, an attempt has been made in recent years to liberalise the electricity market, which is hindered for a long time by socio-economic forces favoured by the monopolistic system of the market. This liberalisation process is also an opportunity for the country to move towards enhancing the structures that can lead to faster and more sustainable development and to maintain the pace of “coupling” with the most developed energy economies of Europe.
    Keywords: Energy Market Liberalisation; Electricity Market Liberalisation; Energy Business Ecosystem; Energy Policy; EU Energy Packages; Greek Energy System
    JEL: Q40 Q43 Q49
    Date: 2021–01–01
  27. By: Louis-Gaëtan Giraudet (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: The zero-interest green loan (ZIGL) programme allows French homeowners to finance home energy retrofits at zero interest rate. Launched in 2009 in the wake of the Grenelle de l'environnement, the programme has strongly underperformed expectations. As the Citizen Convention for Climate now recommends extending the programme, we examine the reasons for the gap between predicted and realized ZIGLs. We find it to be best explained by a lack of profitability for banks. As a consequence, banks exploit consumers' lack of information about the programme to sell them more conventional financial products. In contrast, the role played by other frequently-cited causes, such as high transaction costs and a low interest rate environment, seems to be modest. We conclude that the efficiency of the programme could be improved by assigning loan issuance to a public bank.
    Abstract: L'éco-prêt à taux zéro (EPTZ) permet aux propriétaires de logements de financer des travaux de rénovation énergétique sans payer d'intérêts. Lancée en 2009, cette politique phare du Grenelle de l'environnement n'a pas rencontré le succès escompté. Aujourd'hui, la Convention citoyenne pour le climat (2020) propose de généraliser l'EPTZ. Pour juger de l'opportunité d'une telle mesure, nous nous interrogeons sur les causes possibles de l'écart entre le nombre d'EPTZ initialement prédit et effectivement réalisé. Nous identifions comme cause principale un manque d'attractivité du dispositif pour les banques. Celles-ci mettent en oeuvre des stratégies d'évitement qui prospèrent sur une forme de désintérêt des ménages. D'autres causes fréquemment avancées, comme les coûts administratifs ou l'environnement de taux d'intérêt faibles, semblent jouer un rôle moins important. Nous concluons que l'efficacité du dispositif pourrait être améliorée en transférant l'octroi des prêts à une banque publique.
    Date: 2021–07–01
  28. By: Martin Kittel; Wolf-Peter Schill
    Abstract: To decarbonize the economy, many governments have set targets for the use of renewable energy sources. These are often formulated as relative shares of electricity demand or supply. Implementing respective constraints in energy models is a surprisingly delicate issue. They may cause a modeling artifact of excessive electricity storage use. We introduce this phenomenon as 'unintended storage cycling', which can be detected in case of simultaneous storage charging and discharging. In this paper, we provide an analytical representation of different approaches for implementing minimum renewable share constraints in models, and show how these may lead to unintended storage cycling. Using a parsimonious optimization model, we quantify related distortions of optimal dispatch and investment decisions as well as market prices, and identify important drivers of the phenomenon. Finally, we provide recommendations on how to avoid the distorting effects of unintended storage cycling in energy modeling.
    Date: 2021–07
  29. By: Lee, Yuanyao; Kent, Jeffery; Shi, Rui; Hudiburg, Tara; Guest, Jeremy; Khanna, Madhu
    Keywords: Resource/Energy Economics and Policy, Risk and Uncertainty, Agricultural and Food Policy
    Date: 2021–08
  30. By: Contu, Davide; Mourato, Susana; Kaya, Ozgur
    Abstract: Nuclear energy is an energy source that is usually unfavourable among the public due to its inherent risks. However, it presents a number of benefits, including the possibility to reduce emissions and the contribution to tackle climate change. Among the countries adopting nuclear energy, the United Arab Emirates (UAE) is unusual in that a large share of its residents consists of expatriates who live only part of their lives in the country with no (or highly unlikely) access to citizenship. This distinctive population structure offers the opportunity to investigate the effect of transient residency on acceptance and preferences towards nuclear energy. We conducted this investigation by designing a stated preferences-based survey, targeting an online nationwide sample. The survey collected information on socio-economic characteristics and attitudes, including views on perceived risks and benefits of nuclear energy, views towards different energy sources and life satisfaction. Results indicate that transient individuals, especially those who are more satisfied with their lives in the UAE, are significantly less likely to oppose the construction of new nuclear plants. These individuals are characterized by a more positive perception of benefits over risks arising from nuclear energy. Policy implications are discussed.
    Keywords: choice experiments; Nuclear energy; social acceptability; transient resident; willingness to accept; 1350515
    JEL: D62 D82 Q48 Q51 Q58
    Date: 2020–06–26
  31. By: Qiaoyi Chen; Zhao Chen; Zhikuo Liu; Juan Carlos Suárez Serrato; Daniel Xu
    Abstract: We study a prominent energy regulation affecting large Chinese manufacturers that are part of broader conglomerates. Using detailed firm-level data and difference-in-differences research designs, we show that regulated firms cut output and shifted production to unregulated firms in the same conglomerate instead of improving their energy efficiency. Conglomerate spillovers account for 40% of the output loss of regulated firms and substantially reduce aggregate energy savings. Using a structural model, we show that alternative polices that use public information on business networks could lower the shadow cost of the regulation by more than 40% and increase aggregate energy savings by 10%.
    JEL: H23 L51 O44 Q48
    Date: 2021–07
  32. By: Florian Landis (CER–ETH – Center of Economic Research at ETH Zurich, Switzerland); Gustav Fredriksson (CER–ETH – Center of Economic Research at ETH Zurich, Switzerland); Sebastian Rausch (ZEW Leibniz Centre for European Economic Research, Mannheim, Germany, Department of Economics, Heidelberg University, Germany, Centre for Energy Policy and Economics at ETH Zurich, Switzerland, and Joint Program on the Science and Policy of Global Change at Massachusetts Institute of Technology, Cambridge, USA)
    Abstract: This paper examines the distributional impacts from (i) harmonizing prices for carbon dioxide emissions across sectors and EU countries and (ii) using alternative rules for carbon revenue distribution. We develop a numerical multi-country multi-sector general equilibrium model of the EU-27 economy which resolves household income deciles, based on micro-survey data on expenditure and income, and markets for fossil fuels, electricity, and (EU-wide and national) tradeable emissions rights. We find that carbon price harmonization yields efficiency gains at the EU level. The distributional effects between countries vary and depend largely on the redistribution of carbon revenues. Based on the rules currently in place in Phase IV of the EU ETS, efficiency gains flow disproportionately to low-income countries. Within-country incidence is progressive or neutral for most countries when revenue redistribution is ignored, and is not much affected by carbon price harmonization. Per-capita-based revenue redistribution rules lead to strong progressive outcomes and yield gains for low-income households. Evaluating different policy options using a social welfare function that incorporates inequality aversion suggests that there is no trade-off between efficiency and equity in harmonizing carbon prices in the EU economy.
    Keywords: Carbon pricing, Carbon market integration, EU climate policy, Distributional impacts, Cost effectiveness, Computable general equilibrium, Household heterogeneity
    JEL: C68 H23 Q43 Q52
    Date: 2021–08
  33. By: Adrien Fabre (ETHZ ZURICH CHE - Partenaires IRSTEA - IRSTEA - Institut national de recherche en sciences et technologies pour l'environnement et l'agriculture); Bénédicte Apouey (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); Thomas Douenne (UvA - University of Amsterdam [Amsterdam]); Jean-Michel Fourniau (AME-DEST - Dynamiques Economiques et Sociales des Transports - Université Gustave Eiffel); Louis-Gaëtan Giraudet (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); Jean-François Laslier (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); Solène Tournus (MSHPN - Maison des sciences de l'Homme Paris Nord - UP8 - Université Paris 8 Vincennes-Saint-Denis - CNRS - Centre National de la Recherche Scientifique - Université Sorbonne Paris Nord)
    Abstract: We conduct surveys on both participants in the French Citizens Convention for Climate (CCC) and the general public. By comparing the answers of the randomly drawn citizens with those of the general population on identical questions, we assess the representativity of the CCC, study the evolution of the citizens' opinions, and document the perceptions of the CCC. The CCC appeared broadly representative of the French population. Although, the CCC's Citizens seemed to have been somewhat more favorable to climate policies than the general population at the start, a majority support was found for all proposed measures but one. Despite our findings that the CCC correctly represented the population, we document widespread ignorance and mistrust towards the CCC, including a largely shared belief that it was not representative.
    Keywords: Convention Citoyenne pour le Climat,Climate change,Sortition,Citizens Assembly
    Date: 2021–06
  34. By: Zhengyu Shi; Libo Wu; Haoqi Qian; Yingjie Tian
    Abstract: Inferring the uncertainties in economic conditions are of significant importance for both decision makers as well as market players. In this paper, we propose a novel method based on Hidden Markov Model (HMM) to construct the Economic Condition Uncertainty (ECU) index that can be used to infer the economic condition uncertainties. The ECU index is a dimensionless index ranges between zero and one, this makes it to be comparable among sectors, regions and periods. We use the daily electricity consumption data of nearly 20 thousand firms in Shanghai from 2018 to 2020 to construct the ECU indexes. Results show that all ECU indexes, no matter at sectoral level or regional level, successfully captured the negative impacts of COVID-19 on Shanghai's economic conditions. Besides, the ECU indexes also presented the heterogeneities in different districts as well as in different sectors. This reflects the facts that changes in uncertainties of economic conditions are mainly related to regional economic structures and targeted regulation policies faced by sectors. The ECU index can also be easily extended to measure uncertainties of economic conditions in different fields which has great potentials in the future.
    Date: 2021–07
  35. By: Yedavalli, Pavan; Burak Onat, Emin; Peng, Xi; Sengupta, Raja; Waddell, Paul; Bulusu, Vishwanath; Xue, Min
    Abstract: Over the past several years, Urban Air Mobility (UAM) has galvanized enthusiasm from investors and researchers, marrying expertise in aircraft design, transportation, logistics, artificial intelligence, battery chemistry, and broader policymaking. However, two significant questions remain unexplored: (1) What is the value of UAM in a region’s transportation network?, and (2) How can UAM be effectively deployed to realize and maximize this value to all stakeholders, including riders and local economies? To adequately understand the value proposition of UAM for metropolitan areas, we develop a holistic multi-modal toolchain, SimUAM, to model and simulate UAM and its impacts on travel behavior. This toolchain has several components: (1) MANTA: A fast, high-fidelity regional-scale traffic microsimulator, (2) VertiSim: A granular, discrete-event vertiport and pedestrian, (3) 퐹퐸3 : A high-fidelity, trajectory-based aerial microsimulation. SimUAM, rooted in granular, GPU-based microsimulation, models millions of trips and their exact movements in the street network and in the air, producing interpretable and actionable performance metrics for UAM designs and deployments. The modularity, extensibility, and speed of the platform will allow for rapid scenario planning and sensitivity analysis, effectively acting as a detailed performance assessment tool. As a result, stakeholders in UAM can understand the impacts of critical infrastructure, and subsequently define policies, requirements, and investments needed to support UAM as a viable transportation mode.
    Keywords: Engineering
    Date: 2021–08–01
  36. By: Moshe Babaioff; Ruty Mundel; Noam Nisan
    Abstract: In the early $20^{th}$ century, Pigou observed that imposing a marginal cost tax on the usage of a public good induces a socially efficient level of use as an equilibrium. Unfortunately, such a "Pigouvian" tax may also induce other, socially inefficient, equilibria. We observe that this social inefficiency may be unbounded, and study whether alternative tax structures may lead to milder losses in the worst case, i.e. to a lower price of anarchy. We show that no tax structure leads to bounded losses in the worst case. However, we do find a tax scheme that has a lower price of anarchy than the Pigouvian tax, obtaining tight lower and upper bounds in terms of a crucial parameter that we identify. We generalize our results to various scenarios that each offers an alternative to the use of a public road by private cars, such as ride sharing, or using a bus or a train.
    Date: 2021–07
  37. By: Jed J. Cohen (The Energy Institute at Johannes Kepler University); Levan Elbakidze (Division of Resource Economics and Management and the Center for Innovation in Gas Research and Utilization, West Virginia University); Randall Jackson (Geology and Geography Department and Regional Research Institute, West Virginia University)
    Abstract: Solar Renewable Energy Credits (SRECs) are financial instruments created by state policies to offer incentives for generating solar energy. In an effort to support in-state solar energy sectors and boost local employment opportunities, some states have closed off their SREC markets to out-of-state solar facilities. We examine the merits of such protectionist policy from the protectionist states perspective. We find that SREC market closure leads to higher in-state SREC prices, greater solar installation, and lower electricity prices. The study illustrates the economic incentives for protecting in-state SREC markets from out-of-state solar energy producers.
    Keywords: RPS, Solar Energy, Renewable Energy Credits, Interstate Trade, Protectionism
    JEL: H77 Q42 Q48
    Date: 2020–08–10
  38. By: Saule Baurzhan (Eastern Mediteranean University); Glenn Jenkins (Queen's University); Godwin O. Olasehinde-Williams (Nanchang University)
    Abstract: This paper assesses the economic benefits of 57 World Bank Group-sponsored hydropower dam plant investments. Hydropower dams are among the main sources for producing electricity and the largest renewable source for power generation throughout the world. Hydropower dams are often a lower-cost option for power generation in Clean Energy Transition for addressing global climate change. Despite its conspicuous aspects, constructing hydropower dams has been controversial. Considering the World Bank’s long history as the largest hydropower development financier, this study investigates its performance in supporting hydropower dams. The outcomes of this study apply to the wider hydropower development community. Of the projects in this study, 70% experienced a cost overrun, and more than 80% of projects experienced time overruns, incurring potential additional costs as a result. Despite the high cost and time overruns, this hydropower portfolio of dams produced a present value of net economic benefits by 2016 of over half a trillion USD. Based on our findings, the evaluated hydropower portfolio helped avoid over a billion tonnes of CO2 for an estimated global environmental benefit valued at nearly USD 350 billion. The projects’ additional environmental benefits raise the real rate of return from 15.4% to 17.3%. The implication for hydropower developers is that the projects’ assessment should consider cost and time overrun and factor them into the project-planning contingency scenarios. There is a considerable benefit for developing countries to exploit their hydropower resources if they can be developed according to industry practices and international standards. The case for developing hydropower may be stronger when considering its climate benefits. The net economic benefits of hydropower can be even higher if there is a greater effort to manage cost and time overruns.
    Keywords: investment appraisal, carbon emissions, cost overrun, hydropower, dams, World Bank
    Date: 2021–08
  39. By: Davillas, A; Burlinson, A.; Liu, H-H.
    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: lifesatisfaction, 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
  40. By: Marion Leroutier (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, 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: Decreasing greenhouse gas emissions from electricity generation is crucial to tackle climate change. Yet, empirically little is known on the effectiveness of economic instruments in the power sector. This paper examines the impact of the UK Carbon Price Support (CPS), a carbon tax implemented in the UK power sector in 2013. Compared to a synthetic control unit built from other European countries, emissions from the UK power sector declined by 26 percent on an average year between 2013 and 2017. Bounds on the effects of potential UK confounding policies and several placebo tests suggest that the carbon tax caused at least 80% of this decrease. Three mechanisms are highlighted: a decrease in emissions at the intensive margin; the closure of some high-emission plants at the extensive margin; and a higher probability of closure than in the synthetic UK for plants at risk of closure due to European air quality regulations. This paper shows that a carbon tax on electricity generation can lead to successful decarbonisation.
    Keywords: Synthetic control method,Synthetic control method carbon tax,Electricity generation,Carbon tax
    Date: 2021–06
  41. By: Donatella Baiardi (Center for European Studies, University of Parma, Italy; Rimini Centre for Economic Analysis); Maria Gaia Soana (University of Parma, Italy)
    Abstract: We empirically investigate the effectiveness of environmental and energy policies, complying with legal requirements or followed voluntarily by firms, on the pro-environmental efforts of 63 listed firms in Italy in the years 2008-2019. Our research design combines macroeconomic data referring to general policies for reducing air emissions, renewable energy interventions and energy efficiency measures with analogous policies applied at firm level on voluntary basis. The empirical analysis is performed in a panel data context by means of propensity score matching with multiple treatments, which allows us to test the effectiveness of (1) macroeconomic policies on firm environmental performance; (2) microeconomic policies on firm environmental performance, and (3) the coexistence of macroeconomic and microeconomic policies on firm environmental performance. Our results show that the effectiveness of these interventions, applied either separately or jointly, depends on the type of indicator used to proxy firm environmental performance. In particular, we find that the social costs of climate change are not internalized by listed companies, and that macroeconomic interventions are an excellent tool to implement because they are effective to fight climate change where voluntary actions fail and are also complementary to voluntary actions, since they support their effectiveness.
    Keywords: Firm environmental performance, General policies for reducing air emissions, Renewable energy policies, Energy efficiency policies, Propensity score matching with multiple treatments, Italian listed companies
    Date: 2021–08
  42. By: Josep Ferret Mas (Department of Politics and International Relations, University of Reading); Alexander Mihailov (Department of Economics, University of Reading)
    Abstract: The present paper endorses an interdisciplinary approach to the complex and urgent issue of intergenerational climate justice, and proposes a rich menu of policy options, in particular some novel and unconventional ones, to resolve it immediately but flexibly. We incorporate the realistic features of economic growth, nominal interest, expected inflation, and the option for nonrepayment or partial repayment of public debt across generations as well as a central bank institution, or rather the global network of central banks, to implement climate mitigation policy in the stylized model proposed by Sachs (2015). Similarly, but even without repayment, we find such kind of policy, which we label 'green quantitative easing', or 'green QE', to be Pareto-efficient across generations. Differently, we argue that neither the present, nor future generations need to repay the novel greening compensatory transfers (GCTs) to households and firms we envisage to serve as a main financial instrument of central banks in triggering a decisive reversal in environmental deterioration right now, without further delay, given the emergency of the situation. Moreover, and in support of the economic considerations and incentives, we argue from philosophical, legal and political-theory grounds that such a financial scheme intermediated by central banks worldwide serves two types of principles of intergenerational climate justice: (i) principles that tell us to mitigate climate change now and avoid harm for future generations; and (ii) principles that tell us how to share mitigation costs fairly across generations. Our spectrum of suggested pragmatic green QE initiatives includes potential issuance by firms and households of super-long-term coupon bonds to be held by central banks over up to a century, possibly GCT-based only, and allows for much flexibility and complementarity in the practical solutions to be potentially chosen, with voluntary partial repayment or not of the mitigation costs across generations.
    Keywords: green quantitative easing, greening compensatory transfers, central banks, public finance, climate change mitigation policy, intergenerational climate justice, intergenerational social welfare
    JEL: D61 D63 D78 E21 E58 F55 G28 H23 O44 Q54
    Date: 2021–08–10
  43. By: Oliver Kalsbach (CER–ETH – Center of Economic Research at ETH Zurich, Switzerland); Sebastian Rausch (ZEW Leibniz Centre for European Economic Research, Mannheim, Germany, Department of Economics, Heidelberg University, Germany, Centre for Energy Policy and Economics at ETH Zurich, Switzerland, and Joint Program on the Science and Policy of Global Change at Massachusetts Institute of Technology, Cambridge, USA)
    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: 2021–08
  44. By: Ferrari Massimo,; Pagliari Maria Sole,
    Abstract: In this paper we explore the cross-country implications of climate-related mitigation policies. Specifically, we set up a two-country, two-sector (brown vs green) DSGE model with negative production externalities stemming from carbon-dioxide emissions. We estimate the model using US and euro area data and we characterize welfare-enhancing equilibria under alternative containment policies. Three main policy implications emerge: i) fiscal policy should focus on reducing emissions by levying taxes on polluting production activities; ii) monetary policy should look through environmental objectives while standing ready to support the economy when the costs of the environmental transition materialize; iii) international cooperation is crucial to obtain a Pareto improvement under the proposed policies. We finally find that the objective of reducing emissions by 50%, which is compatible with the Paris agreement's goal of limiting global warming to below 2 degrees Celsius with respect to pre-industrial levels, would not be attainable in absence of international cooperation even with the support of monetary policy.
    Keywords: DSGE model, open-economy macroeconomics, optimal policies, climate modelling.
    JEL: F42 E50 E60 F30
    Date: 2021
  45. By: Eckersley, Peter; Kern, Kristine; Haupt, Wolfgang; Müller, Hannah
    Abstract: This report is a product of the ExTrass project, which is funded by the German Federal Ministry of Education and Research to help medium-sized and large cities in Germany to prepare for the increased frequency of extreme weather events, particularly heavy rainfall and heatwaves. The project examines the drivers and barriers for urban climate adaptation and mitigation, with a particular focus on three case study cities: Potsdam, Remscheid and Würzburg. Amongst other things, the project team evaluates the efficacy of urban greening initiatives, works towards climate-sensitive urban planning, contributes data on city climate, educates the population on risks and improves contingency plans. It also provides a platform for knowledge exchange to help cities learn from each other. Cities are responsible for about 70% of global greenhouse gas emissions and are also particularly vulnerable to the impacts of climate change. Extreme weather events can result in significant damage to property and pose major risks to urban populations. Yet, municipalities are not able to manage these risks alone: in order to understand how they are seeking to combat change we need to examine the contexts within which they operate and their relationships with other key actors. This report focuses on the multi-level nature of the German state, with a particular focus on the role of the Bundesländer regional governments. It shows how the climate and energy priorities of individual states are largely shaped by their political and economic interests, and result in them adopting different approaches to working with municipalities. It shows that although Germany relies overwhelmingly on interdependent, vertical relationships between tiers of government to coordinate and implement climate policy, states that do not have a historical reliance on fossil fuel resources, and/or in which the Green Party form part of the governing coalition, have provided more resources and support to municipal governments to act on the issue.
    Date: 2021
  46. By: Catherine Locatelli (GAEL - Laboratoire d'Economie Appliquée de Grenoble - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes)
    Abstract: Analyse de l'émergence d'une confrontation Etats-Unis-Russie sur le marché européen et asiatique en matière de gaz naturel
    Date: 2021–06–14
  47. By: R. Andrew Butters; Jackson Dorsey; Gautam Gowrisankaran
    Abstract: We develop a dynamic competitive equilibrium model of battery adoption and operations to evaluate the social value and adoption trajectory of utility-scale batteries and examine policy counterfactuals. The first battery unit breaks even in 2027 when renewable energy share reaches 52% and expected capital costs are $259/kWh. While the competitive market will install 10 MWh by 2030, competitive adoption does not reach 5,000 MWh until 2043 because the marginal value of investment sharply declines in aggregate capacity. California's 1,300 MW battery mandate implies subsidies of 49% and creates deadweight losses of $433 million relative to a competitive battery market.
    JEL: L94 Q40 Q48 Q55
    Date: 2021–08
  48. By: International Monetary Fund
    Abstract: Selected Issues
    Keywords: B. mining revenue; revenue management; tax exemption; A. mining revenue; company Cost Structure; Mining sector; Oil, gas and mining taxes; Corporate income tax; Transfer pricing; Natural resources; Asia and Pacific; Global
    Date: 2021–07–06
  49. By: Salaheddine Soummane (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); F. Ghersi (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); Franck Lecocq (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: We implement the hybrid (energy-economy) recursive-dynamic multisector IMACLIM model with important adaptations to Saudi macroeconomics. We design two scenarios reflecting both the Saudi Vision 2030 economic development program and Nationally Determined Contribution (NDC) to greenhouse gas mitigation: Continuity of previous plans to expand energy-intensive activities under maintained energy-pricing policies, versus Transformation by economic diversification away from hydrocarbon-related activities and fiscal and energypricing reforms. We show that, compared to Continuity, Transformation improves activity, employment and public budget outlooks, while considerably abating the energy intensity of GDP and total CO2 emissions. Our results thus point at the relevance of economic diversification as both a hedging strategy against international climate change mitigation depressing oil markets and a national climate mitigation strategy for Saudi Arabia. However, the successful advancement of the reforms necessary for diversification remains conditional to setting a suitable institutional framework for a competitive economy.
    Keywords: Economic diversification,General equilibrium,Oil-exporting country,Climate policy
    Date: 2022
  50. By: Jairo Quirós-Tortós (UCR - Universidad de Costa Rica); Guido Godínez- Zamora (UCR - Universidad de Costa Rica); Daniel de la Torre Ugarte (Universidad del Pacífico); Carlos Heros; Juan Lazo (Universidad del Pacífico); Elías Ruiz (Ministerio de Ambiente del Perú); Berioska Quispe (Ministerio de Ambiente del Perú); Daniella Canseco; Freddy Garro (Ministerio de Ambiente del Perú); Jimena Mora (Ministerio de Ambiente del Perú); Lorenzo Eguren (Ministerio de Ambiente del Perú); Milagros Sandoval (Ministerio de Ambiente del Perú); Silke Campos (Ministerio de Ambiente del Perú); Micol Salmeri (2050 Pathways Platform); Richard Baron (2050 Pathways Platform); Jaime Fernandez-Baca (Banco Interamericano de Desarollo); Ana Saori Iju Fukushima (Banco Interamericano de Desarollo); Valentina Saavedra (Banco Interamericano de Desarollo); Adrien Vogt-Schilb (Banco Interamericano de Desarollo)
    Abstract: Cumplir con las metas del Acuerdo de Paris requiere que todos los países lleguen a cero emisiones netas de carbono alrededor de 2050. Este estudio evalúa los costos y beneficios de distintas rutas de descarbonización en los sectores de agricultura, silvicultura y otros usos de la tierra; transporte; energía; residuos; y procesos industriales en Perú. En sus páginas demuestra que es posible lograr cero emisiones netas de carbono para 2050, mediante transformaciones sectoriales como generación de electricidad a base de energía renovable, electrificación de la flota vehicular y de los usos de la energía, eficiencia energética, reducción de la deforestación, mejores prácticas agrícolas y ganaderas, cambios en las dietas, y mejoras en el manejo de residuos y en los procesos industriales. Estas transformaciones brindan un beneficio neto de US$ 140.000 millones, gracias a ahorros operativos (incluidos ahorros de energía), mejoras en la productividad e ingresos por servicios ecosistémicos, y favorecen la salud, entre otros beneficios. Además, el estudio evalúa 1.000 posibles rutas de descarbonización adicionales para analizar el efecto de 201 factores de incertidumbre sobre emisiones, costos y beneficios, utilizando el método de toma de decisiones robusta. Las transformaciones sectoriales modeladas traen beneficios netos de entre US$ 20.000 millones y US$ 391.000 millones y permiten reducir las emisiones entre 260 MtCO2e y 520 MtCO2e para 2050. Estos resultados sustentan la actualización de la Estrategia Nacional ante el Cambio climático del Gobierno del Perú y sus políticas de reactivación económica posteriores a la pandemia.
    Date: 2021–05
  51. By: Sebastian Rausch (ZEW Leibniz Centre for European Economic Research, Mannheim, Germany, Department of Economics, Heidelberg University, Germany, Centre for Energy Policy and Economics at ETH Zurich, Switzerland, and Joint Program on the Science and Policy of Global Change at Massachusetts Institute of Technology, Cambridge, USA); Hidemichi Yonezawa (Division for Energy and Environmental Economics at the Research Department at Statistics Norway)
    Abstract: Technology policy is the most widespread form of climate policy and is often preferred over seemingly efficient carbon pricing. We propose a new explanation for this observation: gains that predominantly accrue to households with large capital assets and that influence majority decisions in favor of technology policy. We study climate policy choices in an overlapping generations model with heterogeneous energy technologies and distortionary income taxation. Compared to carbon pricing, green technology policy leads to a pronounced capital subsidy effect that benefits most of the current generations but burdens future generations. Based on majority voting which disregards future generations, green technology policies are favored over a carbon tax. Smart “polluter-pays” financing of green technology policies enables obtaining the support of current generations while realizing efficiency gains for future generations.
    Keywords: Climate Policy; Green Technology Policy; Carbon Pricing; Overlapping Generations; Intergenerational Distribution; Social Welfare; General Equilibrium
    JEL: Q54 Q48 Q58 D58 H23
    Date: 2021–08
  52. By: Barbara Annicchiarico; Stefano Carattini; Carolyn Fischer; Garth Heutel
    Abstract: We study the relationship between business cycles and the design and effects of environmental policies, particularly those with economy-wide significance like climate policies. First, we provide a brief review of the literature related to this topic, from initial explorations using real business cycle models to New Keynesian extensions, open-economy variations, and issues of monetary policy and financial regulations. Next, we provide a list of the main findings that emerge from this literature that are potentially most relevant to policymakers, including the impacts of policy on volatility and how to design policy to adjust to cycles. Finally, we propose several important remaining research questions.
    JEL: E32 Q58
    Date: 2021–07

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