nep-ene New Economics Papers
on Energy Economics
Issue of 2021‒10‒25
fifty papers chosen by
Roger Fouquet
London School of Economics

  1. Energy exchange among heterogeneous prosumers under price uncertainty By Marta Castellini; Luca Di Corato; Michele Moretto; Sergio Vergalli
  2. Examining the Determinants of Air Pollution: Implications of Economic Growth and Renewable Energy Consumption By Xie, Jia Yu; Suh, Dong Hee
  3. Do Economic Growth and Renewable Energy Consumption Affect Biodiversity and Ecosystem Services? By Park, Jinseon; Suh, Dong Hee
  4. The impact of Renewable Energy Standards on the biomass supply and agricultural land demand in the US Great Plains Region By Iglesias Pinedo, Wilman J.
  5. Greta Thunberg effect and Business Cycle Dynamics: A DSGE model By Busato, Francesco; Chiarini, Bruno; Cisco, Gianluigi; Ferrara, Maria
  6. Developing Countries’ Macroeconomic Exposure to the Low-carbon Transition By Etienne ESPAGNE; Antoine GODIN; Guilherme MAGACHO; Achilleas MANTES; Devrim YILMAZ
  7. Demand or supply? An empirical exploration of the effects of climate change on the macroeconomy By Ciccarelli, Matteo; Marotta, Fulvia
  8. Comment interpréter la finance verte ? By Pierre Jacquet
  9. What Do You Think about Climate Finance? By Johannes Stroebel; Jeffrey Wurgler
  11. Green financial development improving energy efficiency and economic growth: A study of CPEC area in COVID-19 era By Zhang, Linyun; Huang, Feiming; Lu, Lu; Ni, Xinwen
  12. Strategic Local Regulators and the Efficacy of Pollution Standards By Zhang, Ruohao; Khanna, Neha
  13. An Evolutionary Approach to Pollution Control in Competitive Markets By Ratul Lahkar; Vinay Ramani
  14. Taxation of Carbon Emissions and Air Pollution in Intertemporal Optimization Frameworks with Social and Private Discount Rates By Jacqueline Adelowo; Mathias Mier; Christoph Weissbart; Jacqueline Adelowo
  15. The Economic Benefits of Mitigating the Risk of Unplanned Power Outages By Majid Hashemi; Glenn Jenkins
  16. Robust estimation and forecasting of climate change using score-driven ice-age models By Blazsek, Szabolcs Istvan; Escribano Sáez, Álvaro
  17. Which combination of battery capacity and charging power for battery electric vehicles: urban versus rural French case studies By Bassem Haidar; Pascal da Costa; Jan Lepoutre; Fabrice Vidal
  18. Machine learning in energy forecasts with an application to high frequency electricity consumption data By Erik Heilmann; Janosch Henze; Heike Wetzel
  19. Can Environmental, Social and Governance be successfully incorporated into reporting standards? Evaluating ESG (Environmental concerns) in the Oil and Gas indus By Kakkar, Shrey
  20. An exploration of the association between fuel subsidies and fuel riots By Neil McCulloch; Davide Natalini; Naomi Hossain; Patricia Justino
  21. The Effect of Reliability Improvements on Household Electricity Consumption and Coping Behavior: A Multi-dimensional Approach By Majid Hashemi
  22. Time-varying granger causality tests for applications in global crude oil markets: A study on the DCC-MGARCH Hong test By Caporina, Massimiliano; Costola, Michele
  23. Abatement strategies and the cost of environmental regulation: emission standards on the European car market By Mathias Reynaert
  24. Greening international aviation post COVID-19: What role for kerosene taxes? By Jonas Teusch; Samuel Ribansky
  25. Erratum to 'Forecasting day-ahead electricity prices: A review of state-of-the-art algorithms, best practices and an open-access benchmark' [Appl. Energy 293 (2021) 116983] By Jesus Lago; Grzegorz Marcjasz; Bart De Schutter; Rafal Weron
  26. Land Value Impacts of Ethanol Market Expansion Differ by Irrigation Status By Sampson, Gabriel; Gardner, Grant
  27. Education Quality, Green Technology, and the Economic Impact of Carbon Pricing By Macdonald, Kevin; Patrinos, Harry Anthony
  28. Analyse der CO2-Abgaben im internationalen Vergleich inklusive Maßnahmen und Handlungsspielräume zur Vermeidung der Verlagerung von CO2-Emissionen By Berger, Johannes; Köppl-Turyna, Monika; Strohner, Ludwig
  29. Corporate CO2 offsetting in small- and medium-sized firms in Germany By Daniel Engler; Gunnar Gutsche; Amantia Simixhiu; Andreas Ziegler
  30. Effects of Carbon Pricing and Other Climate Policies on CO2 Emissions By Emanuel Kohlscheen; Richhild Moessner; Elod Takáts
  31. Economics of co-firing rice straw in coal power plants in Vietnam By an Ha Truong; Minh Ha-Duong; Hoang Anh Tran
  32. Decarbonisation through digitalisation: Proposals for transforming the energy sector By Strüker, Jens; Weibelzahl, Martin; Körner, Marc-Fabian; Kießling, Axel; Franke-Sluijk, Ariette; Herrmann, Mike
  33. Preferences For The Far Future By Steinke, Marek; Trautmann, Stefan
  34. Adaptation to climate change: air-conditioning and the role of remittances By Teresa Randazzo; Filippo Pavanello; Enrica De Cian
  35. The Economic Implications for Australia of Carbon Tariffs By Philip Adams
  36. The rise and fall of the energy-carbon Kuznets curve: Evidence from Africa By Olatunji A. Shobande; Simplice A. Asongu
  37. The Influence of Public Charging Infrastructure Deployment and Other Socio-Economic Factors on Electric Vehicle Adoption in France By Bassem Haidar; Maria Teresa Aguilar Rojas
  38. Climate Protection versus Convergence? By Lengwiler, Yvan
  39. Imaginary future generations: A deliberative approach for intergenerational sustainability dilemma By Raja Ragendra Timilsina; Yoshinori Nakagawa; Yoshio Komijo; Koji Kotani; Tatsuyoshi Saijo
  40. Energy Consumption and Human Development in South Africa: Empirical Evidence from Disaggregated Data By Mercy Musakwa; Nicholas M Odhiambo
  41. The Effects of Air Quality on Economics of Farm Worker Productivity By Sambucci, Olena; Sumner, Daniel A.
  43. Assessment of 2021-2025-2030 CO2 standards on automakers' portfolio vehicles' segments By Bassem Haidar; Fabrice Vidal; Pascal da Costa; Jan Lepoutre
  44. Exploring the theoretical link between profitability and luxury emissions By Stefano Di Bucchianico; Federica Cappelli
  45. Emission Control by Voluntary Agreements: Oligopoly Markets with Green Consumers By Kim, Hyunseok; Moschini, GianCarlo
  46. Spillover: Impact of the Deepwater Horizon Oil Spill on local employment level of the Gulf of Mexico Coastal Region By Saha, Bijeta Bijen
  47. On technology transfer and utility-scale power storage By Minh Ha-Duong
  48. Does Telecommuting Reduce Commuting Emissions? By Waldemar Marz; Suphi Sen
  49. Assessment of 2021-2025-2030 CO2 standards on automakers' portfolio vehicles' segments By Bassem Haidar; Fabrice Vidal; Pascal da Costa; Jan Lepoutre
  50. Biographical By Nordhaus, William

  1. By: Marta Castellini (Department of Economics and Management, Università degli Studi di Brescia; FEEM); Luca Di Corato (Department of Economics, University Of Venice Cà Foscari); Michele Moretto (Department of Economics and Management, Università degli Studi di Padova); Sergio Vergalli (Department of Economics and Management, Università degli Studi di Brescia; FEEM)
    Abstract: In this paper, we provide a real options model framing prosumers’ investment in photovoltaic plants. This is presented in a Smart Grid context where the exchange of energy among prosumers is possible. We determine the optimal size of the photovoltaic installations based on the influence the self-consumption profiles on the exchange of energy among prosumers. We calibrate the model using figures relative to the Northern Italy energy market and investigate the investment decision allowing for different prosumer profiles and consider several combinations of their individual energy demand and supply. Our findings show that the shape of individual energy demand and supply curves is crucial to the exchange of energy among prosumers, and that there could be circumstances under which no exchange occurs.
    Keywords: Smart Grids, Renewable Energy Sources, Real Options, Prosumer, Peer to Peer Energy Trading
    JEL: Q42 C61 D81
    Date: 2021
  2. By: Xie, Jia Yu; Suh, Dong Hee
    Keywords: Environmental Economics and Policy, Resource/Energy Economics and Policy, Health Economics and Policy
    Date: 2021–08
  3. By: Park, Jinseon; Suh, Dong Hee
    Keywords: Environmental Economics and Policy, Resource/Energy Economics and Policy, Research Methods/Statistical Methods
    Date: 2021–08
  4. By: Iglesias Pinedo, Wilman J.
    Keywords: Production Economics, Resource/Energy Economics and Policy, Research Methods/Statistical Methods
    Date: 2021–08
  5. By: Busato, Francesco; Chiarini, Bruno; Cisco, Gianluigi; Ferrara, Maria
    Abstract: The increasing concerns for the future effects of global warming have given rise to an unprecedented wave of environmental activism. This paper studies how this call for stronger climate actions could influence macroeconomic dynamics. We explore this topic, employing a Dynamic Stochastic General Equilibrium (DSGE) model extended to consider two classes of goods (i.e., Green and Dirty), variable green preferences, and a "Greta Thunberg" shock affecting consumers' sustainable attitudes. We find that: (i) environmental awareness plays a key role in reducing carbon emissions and green preferences; (ii) Greta Thunberg effect slows down aggregate output and investment; (iii) a green preference shock contributes to around 15 and 29 % of consumption, investment, and labor volatilities at the aggregate level.
    Keywords: Carbon Emissions, Environmental Awareness, DSGE model, General Equilibrium, Global Warming, Green Consumer Behavior
    JEL: E32 Q51 Q54
    Date: 2021–10–14
  6. By: Etienne ESPAGNE; Antoine GODIN; Guilherme MAGACHO; Achilleas MANTES; Devrim YILMAZ
    Abstract: This paper aims at providing estimates of countries’ macroeconomic exposures to the low-carbon transition. We develop a method to evaluate countries’ external, fiscal and socio-economic exposure, and, considering their capacity to adapt their productive structure, we analyse countries’ vulnerabilities and risks in these different dimensions.
    JEL: Q
    Date: 2021–10–19
  7. By: Ciccarelli, Matteo; Marotta, Fulvia
    Abstract: The macroeconomic effects of climate-related events and climate policies depend on the interaction between demand- and supply-type of shocks that those events and policies imply. Using a panel of 24 OECD countries for the sample 1990-2019 and a standard macroeconomic framework, the paper tests the combined effect of (1) climate change, (2) environmental policies and (3) environment-related technologies on the macroeconomy. Results show that climate change and policies to counteract them have a significant, albeit not sizeable, macroeconomic effects over the business cycle. We find evidence that physical risks work as negative demand shocks while transition policies or technology improvements resemble downward supply movements. Furthermore, the disruptive effects on the economy are exacerbated for countries without carbon tax or with a high exposure to natural disasters. Overall our results support the need for a uniform policy mix to counteract climate change with a balance between demand-pull and technology-push policies. JEL Classification: C11, C33, E32, E58, Q5
    Keywords: business cycle, environment-related technologies, environmental policy, physical risks, SVAR
    Date: 2021–10
  8. By: Pierre Jacquet (ENPC - École des Ponts ParisTech)
    Abstract: Beyond its indisputable success as a financial niche, the concept of "green finance" exhibits several inconsistencies that reflect tensions with the current rules of financial capitalism and question the potential of green finance to engineer and sustain societal change. However, the interaction between the development of green finance, the pressures from civil society (that underlie changes in societal values), and the validation through tax and regulatory policies, holds a real potential for green transformation. Green finance brings a threefold contribution through that interaction: measure and communication of impacts; standardization of approaches, criteria and instruments; progressive normalization of green investment principles. Yet, taxation and regulation play a crucial role in validating these evolutions and introducing supportive incentives.
    Abstract: En dépit d'incontestables succès de niche, le concept de finance verte présente plusieurs zones de flou et incohérences qui soulignent les tensions avec les règles de fonctionnement du capitalisme financier et amènent à relativiser son potentiel de transformation de l'économie et de la société. Cependant, l'interaction entre le développement de la finance verte, les pressions de la société civile (qui font évoluer les valeurs de la société et instaurent de nouvelles normes), ainsi que les politiques réglementaires et fiscales (qui valident ces évolutions), peut soutenir la dynamique de transformation verte. La finance verte y contribue dans trois domaines : la mesure et la communication des impacts ; la standardisation des approches, des critères et des instruments ; la normalisation progressive de nouveaux principes d'investissement. Mais la fiscalité et la réglementation jouent aussi un rôle déterminant pour ancrer ces changements et créer les incitations adéquates.
    Date: 2021–07–01
  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 rather than overestimate them. 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.
    Keywords: climate finance, environment, ESG, SRI, social discounting
    JEL: G12 G14 H43 Q54
    Date: 2021
  10. By: Leonardo Becchetti (Dipartimento di Economia e Finanza, Università di Roma Tor Vergata); Sara Mancini (Dipartimento di Economia e Finanza, Università di Roma Tor Vergata); Nazaria Solferino (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria)
    Abstract: We investigate the effects of domestic and EU incentives on different types of corporate investments in ecological transition on a large representative sample of Italian firms including the universe of companies above 250 employees. We perform propensity score matching tests exploiting revealed information of firms that declare to use the incentives for specific ecological transition investments compared to a synthetic counterfactual of “twin” companies matched on selected characteristics. Our findings show that domestic and EU incentives significantly increase green investments, and more so if we consider investment in energy saving plants and for greenhouse emissions reduction.
    Keywords: EU incentives, green investment, propensity score
    JEL: H23 H25 Q58
    Date: 2021–10
  11. By: Zhang, Linyun; Huang, Feiming; Lu, Lu; Ni, Xinwen
    Abstract: This study seeks to evaluate the effect of green financial development, improving energy efficiency and economic growth on Covid-19 tenure. For this, the CPEC area is recommended to look into. Present study revealed the energy economic negative repercussions of Covid-19 impacts. It is assumed that, in China and Pakistan, economic expansion, trade openness, financial development, and urbanization coexist. To verify the postulated impacts of economic activity on the environment, we do Johansen cointegration, error correction, and Granger causality tests. We discovered that economic growth, energy consumption, trade openness, financial development, and urbanization had a long-term relationship to CO2 emissions in Pakistan. Urbanization is the only macroeconomic factor with a detrimental effect on carbon emissions. As with China, no cointegration is found across variables, but unidirectional causality from energy consumption and economic growth to economic growth is established. Economic growth, energy consumption, and trade openness also each have bidirectional causal effect on financial development. According to statistical data, along with significant projected economic development in CPEC countries, policymakers and regulators are urged to strengthen environmental protection laws in China and Pakistan.
    Keywords: Green financial development,Energy Financing,Energy Efficiency,Economic growth,Covid-19 crises,Capital formation
    Date: 2021
  12. By: Zhang, Ruohao; Khanna, Neha
    Keywords: Environmental Economics and Policy, Institutional and Behavioral Economics, Community/Rural/Urban Development
    Date: 2021–08
  13. By: Ratul Lahkar (Ashoka University); Vinay Ramani (Indian Institute of Management, Vishakhapatnam)
    Abstract: We consider a large population of firms in a market environment. The firms are divided into a finite set of types, with each type being characterized by a distinct private cost function. Moreover, the firms generate an external cost like pollution in the production process. As a result, the Nash equilibrium outcome is not socially optimal. We propose an evolutionary implementation mechanism to achieve the socially optimal outcome. In contrast to the classical Pigouvian pricing and the VCG mechanism, evolutionarily implementation does not require the planner to know or elicit any private information from firms. Hence, it is informationally parsimonious. By imposing a tax equal to the current external damage being imposed by a firm, the planner can guide the evolution of the society towards the social optimum. The imposition of the tax generates a potential game whose potential function is the social welfare function of the model. Evolutionary dynamics converge to the maximizer of this function thereby evolutionarily implementing the social welfare maximizer.
    Keywords: Evolutionary Implementation; Negative Externality; Potential Games; Pigouvian Tax; Dominant Strategy Implementation
    Date: 2021–10
  14. By: Jacqueline Adelowo; Mathias Mier; Christoph Weissbart; Jacqueline Adelowo
    Abstract: Current policies focus on reducing CO2 emissions, neglecting the existence and impact of other air pollutants such as NO2, NH3, NMVOC, PPM10, PPM2.5, and SO2. We devise a strategy to model those emissions and related social cost accounting for diverging social and private discount rates in an intertemporal optimization framework that aims to predict firm behavior. We derive optimal CO2 and air pollution taxes above the social cost of carbon or social cost of air pollution, respectively, when social discount rates are below private ones. We implement the modeling strategy in the EUREGEN model to determine the technology and emission mix of the European power market until 2050 and quantify aggregated social cost. No taxation yields aggregated social cost of 5,145 billion € in the period 2020 to 2050. Taxing CO2 emissions only leads to aggregated social cost of 794 billion € and promotes the deployment of CCS technologies. Taxing air pollution only results in aggregated social cost of 2,091 billion € and fosters the deployment of nuclear. Taxing both reduces cost to 622 billion €. Wind and solar are almost unaffected by internalization choices
    Keywords: Taxation, Intertemporal Optimization, Social Cost, Air Pollution, Carbon Emission, Externality, Energy System Model, Power Market Model, Decarbonization
    JEL: C61 C68 Q40 Q41
    Date: 2021
  15. By: Majid Hashemi; Glenn Jenkins (Queen's University)
    Abstract: This paper takes on a novel perspective to the overloading of distribution substations by considering the common-pool characteristics of electric infrastructure capacity. Using firm- and substation-level data from a sample of Nepalese firms, the results provide evidence of common-pool resource (CPR) problems across substations’ ownership boundaries: firms with captive substations experience fewer and shorter unplanned outages than firms connected to shared substations. Based on these findings, private investments in captive substations emerge as a coping mechanism against unreliable electricity supply. Lastly, an appraisal framework for such investments is developed and used to quantify the economic benefits to Nepal’s economy.
    Keywords: Electricity reliability, Opportunity cost of power outages, Common-pool resource
    JEL: Q41 D61 H4 L43
    Date: 2021–10
  16. By: Blazsek, Szabolcs Istvan; Escribano Sáez, Álvaro
    Abstract: ScScore-driven models applied to finance and economics have attracted significant attention in the last decade. In this paper, we apply those models to climate data. We study the robustness of a recent climate econometric model, named ice-age model, and we extend that model by using score-driven filters in the measurement and transition equations. The climate variables considered are Antarctic ice volume Icet, atmospheric carbon dioxide level CO2,t, and land surface temperature Tempt, which during the history of the Earth were driven by exogenous variables. The influence of humanity on climate started approximately 10-15 thousand years ago, and it has significantly increased since then. We forecast the climate variables for the last 100 thousand years, by using data for the period of 798 thousand years ago to 101 thousand years ago for which humanity did not influence the Earth’s climate. For the last 10-15 thousand years of the forecasting period, we find that: (i) the forecasts of Icet are above the observed Icet, (ii) the forecasts of the CO2,t level are below the observed CO2,t, and (iii) the forecasts of Tempt are below the observed Tempt. Our results are robust, and they disentangle the effects of humanity and orbital variables.
    Keywords: Climate Change; Dynamic Conditional Score Models; Generalized Autoregressive Score Models; Ice-Ages and Inter-Glacial Periods; Atmospheric Co2 and Land Surface Temperature
    Date: 2021–10–14
  17. By: Bassem Haidar (LGI - Laboratoire Génie Industriel - CentraleSupélec - Université Paris-Saclay); Pascal da Costa; Jan Lepoutre; Fabrice Vidal
    Abstract: Battery Electric Vehicles (BEVs) are generally considered a promising solution for reducing greenhouse-gas emissions. Despite increasing sales, techno-economic barriers still hinder their widespread adoption. Market stakeholders are faced with a dilemma to address these barriers, especially in terms of choices that have to be made about car battery capacity and recharging infrastructure investments. While previously considered separately, these choices are not independent and influence car price, recharging speed, and ecological impact. This paper explores various combinations of battery capacity sizes and charging power to define and compare these options. We simulate the needs of 12 scenarios of identical privately-purchased BEVs, by increasing their battery capacity, analyse the owner's and charging operator's cost models before exploring Pareto fronts to conclude with optimal combinations of battery size and charging power, taking into account French urban and rural needs separately. For urban (rural) areas, purchasing a 35-50-kWh (50-kWh) BEV and deploying 22-and 50-kW chargers (50-kW) proves cost-efficient solutions. Policy implications are discussed, and we recommend to revise charging tariffs and pricing methods.
    Keywords: Battery range,Charging infrastructure,Electric vehicles,Innovative business model,Techno-economic scenarios
    Date: 2021
  18. By: Erik Heilmann (University of Kassel); Janosch Henze (University of Kassel); Heike Wetzel (University of Kassel)
    Abstract: Forecasting plays an essential role in energy economics. With new challenges and use cases in the energy system, forecasts have to meet more complex requirements, such as increasing temporal and spatial resolution of data. The concept of machine learning can meet these requirements by providing different model approaches and a standardized process of model selection. This paper provides a concise and comprehensible introduction to the topic by discussing the concept of machine learning in the context of energy economics and presenting an exemplary application to electricity load data. For this, we introduce and demonstrate the structured machine learning process containing the preparation, model selection and test of forecast models. This process is intended to serve as a general guideline for energy economists and practitioners who need to apply sophisticated forecast models.
    Keywords: machine learning, electricity consumption forecast, artificial neural network, time series forecast
    JEL: C45 C53 Q47
    Date: 2021
  19. By: Kakkar, Shrey
    Abstract: This paper examines the current status of Environmental and Social Governance incorporated into company reporting and activity. This investigation first discusses the specific details and components of ESG. It then outlines recent movements towards it, while discussing causes and rationale for companies to consider ESG concerns. Despite Friedman’s sentiment that a company must focus on maximizing shareholder earnings, ESG has demonstrated a noticeable rise in implementation, with over $30 trillion in assets under management globally incorporating ESG. This paper then considers existing ESG frameworks in the Oil and Gas industry, ultimately proposing five criteria to evaluate the ESG consideration/reporting in this industry by different companies. Finally, this paper considers industry leaders from around the world and evaluates their ESG-related activity against the proposed criteria. It concludes that although ESG reporting still lacks common structure and awareness, ESG consideration has become feasible and evident in the Oil and Gas Industry.
    Keywords: Environmental, Social and Governance, Financial Reporting, Oil and Gas
    JEL: M4 M41 M48 Q35 Q51
    Date: 2021–09–20
  20. By: Neil McCulloch; Davide Natalini; Naomi Hossain; Patricia Justino
    Abstract: Between 2005 and 2018, 41 countries had at least one riot directly associated with popular demand for fuel. We make use of a new international dataset on fuel riots to explore the effects of fuel prices and price regimes on fuel riots. In line with prior expectations, we find that large domestic fuel price shocks—often linked to international price shocks—are a key driver of riots. In addition, we report a novel result: fuel riots are closely associated with domestic price regimes.
    Keywords: Fuel subsidies, Riots, protest, Conflict, Prices, Energy
    Date: 2021
  21. By: Majid Hashemi
    Abstract: This study analyzes the extent to which electricity consumers of different income levels would increase electricity consumption and change their coping behavior to deal with power outages in response to electricity reliability improvements. The empirical analysis is conducted in two steps: (1) using an unsupervised machine learning technique, a nationally representative sample of Nepalese households is segmented into similar clusters based on the reliability constraints they face; and, (2) using regression models, the impact of reliability improvements on consumption and coping decisions is estimated. The findings point out that improved reliability is positively correlated with the probability of electric appliance ownership. The interaction of income and reliability-constraint indicators suggests that the unreliable electricity supply constrains households equally at all income levels. Moreover, the results from an ordered probit model with three off-grid backup decision alternatives indicate no association between coping decisions and income in the first two income quintiles. In contrast, higher-income quintiles are associated with significant changes in coping behavior when reliable electricity is available from the grid. Putting this paper’s findings into an energy-policy perspective, a connection to the grid by itself does not necessarily translate to realized benefits from electricity consumption. The reliability of the service plays a critical role for households at all income levels.
    Keywords: Electricity demand, Electricity reliability, Coping behavior, K-means clustering analysis, Low-income countries
    JEL: Q40 Q41 L94 O13 C38
    Date: 2021–10
  22. By: Caporina, Massimiliano; Costola, Michele
    Abstract: Analysing causality among oil prices and, in general, among financial and economic variables is of central relevance in applied economics studies. The recent contribution of Lu et al. (2014) proposes a novel test for causality- the DCC-MGARCH Hong test. We show that the critical values of the test statistic must be evaluated through simulations, thereby challenging the evidence in papers adopting the DCC-MGARCH Hong test. We also note that rolling Hong tests represent a more viable solution in the presence of short-lived causality periods.
    Keywords: Granger Causality,Hong test,DCC-GARCH,Oil market,COVID-19
    JEL: C10 C13 C32 C58 Q43 Q47
    Date: 2021
  23. By: Mathias Reynaert (TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: This paper studies the introduction of an EU-wide emission standard on the automobile market. Using panel data from 1998-2011, I find that firms decreased emission ratings by 14%. Firms use technology adoption and gaming of emission tests to decrease emissions, rather than shifting the sales mix or downsizing. I find that the standard missed its emission target, and from estimating a structural model, I find that the standard was not welfare improving. The political environment in the EU shaped the design and weak enforcement and resulted in firms' choices for abatement by technology adoption and gaming.
    Keywords: Environmental regulation,Compliance,Carbon emissions,Automobiles,Fuel economy
    Date: 2021–01
  24. By: Jonas Teusch; Samuel Ribansky
    Abstract: This paper discusses the contribution that kerosene taxes could make to decarbonising international air travel post COVID-19. Reaching climate neutrality by mid-century requires that all sectors, including aviation, cut emissions strongly. The paper argues that clarity on decarbonisation targets, including through carbon price signals in the form of kerosene taxes, will support an orderly transition in aviation. A gradually increasing tax on kerosene can strengthen the incentives for investment and innovation in clean aviation technologies. Taxing kerosene would also provide implementing countries with tax revenues that could be used to support clean investment and innovation, while addressing competitiveness and equity issues. Where legal obstacles to taxing kerosene exist, these can be overcome by renegotiating the relevant air service agreements.
    Keywords: Air transportation, Carbon taxes, Environmental externalities, Environmental taxes, Fuel taxes, Greenhouse gas emissions, Policy instruments
    JEL: H23 L93 Q58 R48
    Date: 2021–10–20
  25. By: Jesus Lago; Grzegorz Marcjasz; Bart De Schutter; Rafal Weron
    Abstract: This Erratum corrects the error metrics of the LEAR models for the German (EPEX DE) market reported in Tables 2 and 3 of Lago et al. (2021) Applied Energy 293, 116983.
    Keywords: Electricity price forecasting; Regression model; Deep learning; Open-access benchmark; Forecast evaluation; Best practices
    JEL: C22 C32 C45 C51 C53 Q41 Q47
    Date: 2021–07–08
  26. By: Sampson, Gabriel; Gardner, Grant
    Keywords: Resource/Energy Economics and Policy, Environmental Economics and Policy, Production Economics
    Date: 2021–08
  27. By: Macdonald, Kevin; Patrinos, Harry Anthony
    Abstract: Carbon pricing is increasingly used by governments to reduce emissions. The effect of carbon pricing on economic outcomes as well as mitigating factors has been studied extensively since the early 1990s. One mitigating factor that has received less attention is education quality. If technological change that reduces the reliance of production on emissions is skill-biased, then carbon pricing may increase the skill premium of earnings and subsequent wage inequality; however, a more elastic skill supply through better education quality may mitigate adverse economic outcomes, including wage inequality, and enhance the effect of carbon pricing on technological change and subsequently emissions. A general equilibrium, overlapping-generations model is proposed, with endogenous skill investment in which the average skill level of the workforce can affect the need for emissions in an aggregate production function. This study uses data on industrial emissions linked to the Organisation for Economic Co-operation and Development's Programme for International Assessment of Adult Competencies dataset for European Union countries. The findings show that, within countries, cognitive skills are positively associated with employment in industries that rely less on emissions for production and in industries that, over time, have been able to reduce their reliance on emissions for production. In the estimated general equilibrium model, higher cognitive skills reduce their reliance on emissions for production. Having higher quality education-defined as the level of cognitive skills attained by workers per unit of cost-increases the elasticity of skill supply and, as a result, mitigates a carbon tax's economic costs including output loss and wage inequity, and enhances its effect on emissions reduction. The implication is that investments in education quality are needed for better enabling green technological innovation and adaptation and reducing inequality that results from carbon pricing.
    Keywords: Carbon pricing,Education,Skills,Learning outcomes
    JEL: Q43 O47 Q56 O41
    Date: 2021
  28. By: Berger, Johannes; Köppl-Turyna, Monika; Strohner, Ludwig
    Abstract: Die österreichische Bundesregierung hat sich im Regierungsprogramm die Umsetzung einer ökosozialen Steuerreform zum Ziel gesetzt. Damit sollen CO2-Emissionen stärker besteuert werden, um internationalen Verpflichtungen zur Reduktion des Ausstoßes von Treibhausgasemissionen nachzukommen. Aus ökonomischer Sicht können der Emissionshandel und Steuern effiziente Instrumente sein, um dieses Ziel mit möglichst geringen Kosten zu erreichen. Dabei ist der Emissionshandel grundsätzlich vorzuziehen, da er die Erreichung eines Reduktionsziels "garantieren" kann. Im internationalen Vergleich zeigt sich, dass in einer Vielzahl europäischer Länder eine CO2-bezogene Abgabe, teilweise schon seit geraumer Zeit, existiert. Im Vergleich ist aber zu berücksichtigen, dass in Österreich ebenso fiskalisch bedeutsame Abgaben bestehen, die CO2-Emissionen indirekt besteuern. Der internationale Vergleich zeigt, dass die Höhe der Steuer in einzelnen Ländern Europas sehr unterschiedlich ausfällt, von deutlich unter 10 Euro bis knapp 120 Euro je Tonne CO2 in Schweden. Im Schnitt über die Länder mit einer CO2-Abgabe beträgt diese etwa 35 Euro. In Deutschland sieht das nationale Emissionshandelssystem derzeit einen Preis von 25 Euro vor, der bis 2025 schrittweise auf 55 Euro erhöht werden soll. In relevanten Vergleichsländern ist die Einhebung einer CO2-Abgabe mit einer Form der Vergütung der Einnahmen an die Abgabenleistenden verbunden. Dies erfolgt beispielsweise in der Schweiz auf Basis der Lohnsumme eines Unternehmens bzw. pauschal an private Haushalte. In Schweden wurde die Einkommensteuerbelastung reduziert. In Deutschland ist derzeit nur eine Reduktion der ErneuerbarenEnergie-Gesetz-Umlage geplant. Dies würde in Österreich den Beiträgen zur Ökostromförderung entsprechen. Aus ökonomischer Sicht würde das Wachstum und die Beschäftigung bei einer Senkung der Steuern auf das Einkommen (Einkommensteuer und Körperschaftsteuer) und einer Lohnnebenkostensenkung am kräftigsten gestärkt werden. Diese Abgaben weisen auch ein hinreichend großes Aufkommen für eine Rückvergütung auf. Damit könnten die Wachstumskräfte in der Ökonomie und die Beschäftigungsnachfrage gestärkt werden. Zu diesem Ergebnis kommen auch Studien, die sich mit der Rückvergütung von Umweltabgaben beschäftigen. Um den Handlungsspielraum zu erweitern, wäre ein Grenzausgleichsystem (border adjustment) eine Ergänzung zu einer CO2-Bepreisung. Exporte wären vom CO2-Preis entlastet und Importe mit einer CO2-Bepreisung belastet. Je größer der Wirtschaftsraum ist, der ein solches Grenzausgleichssystem einführt, desto größer wäre der Druck auch auf Drittstaaten, ebenfalls weniger CO2- intensiv zu produzieren.
    Date: 2021
  29. By: Daniel Engler (University of Kassel); Gunnar Gutsche (University of Kassel); Amantia Simixhiu (University of Kassel); Andreas Ziegler (University of Kassel)
    Abstract: Voluntary CO2 offsetting by individuals, firms, and organizations is increasingly considered as a direction of climate policy that is complementary to traditional approaches such as subsidies or CO2 taxes. Based on data from a large-scale survey among corporate decision makers, this paper empirically examines corporate CO2 offsetting and its determinants in small- and medium-sized firms in Germany. Our descriptive analysis shows both a rather limited engagement in corporate CO2 offsetting as well as a strong lack of knowledge about its mechanism. The econometric analysis reveals that some firm-specific characteristics like the average age of the employees, firm size, and firm age matter for CO2 offsetting. However, the main estimation results refer to the relevance of general environment-related variables like the implementation of environmental product and service innovations or the share of employees that carry out environment-related tasks and especially of climate-related factors and activities. In particular, the implementation of climate targets and the participation in the EU Emissions Trading System (EU ETS) are strongly significantly positively correlated with CO2 offsetting. In line with similar findings at the individual level, these estimation results imply that corporate CO2 offsetting also does not substitute or crowd out other climate protection and further pro-environmental activities, but rather complements them.
    Keywords: Corporate CO2 offsetting, corporate climate protection and pro-environmental activities, small- and medium-sized firms
    Date: 2021
  30. By: Emanuel Kohlscheen; Richhild Moessner; Elod Takáts
    Abstract: We provide ex-post empirical analysis of the effects of climate policies on carbon dioxide emissions at the aggregate national level. Our results are based on a comprehensive database of 121 countries. As climate policies we examine carbon taxes and emissions trading systems (ETS), as well as the overall stringency of climate policies. We use dynamic panel regressions, controlling for macroeconomic factors such as economic development, GDP growth, urbanisation, as well as the energy mix. We find that higher carbon taxes and prices of permits in ETS reduce carbon emissions. An increase in carbon taxes by $10 per ton of CO2 reduces CO2 emissions per capita by 1.3% in the short run and by 4.6% in the long run.
    Keywords: climate policies, carbon tax, carbon emission trading system, carbon dioxide, climate change, emissions, energy, environment, growth
    JEL: O44 Q00 Q48 Q58 Q40 Q50
    Date: 2021
  31. By: an Ha Truong (USTH - University of Science and Technology of Hanoi, 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, VIET - Vietnam Initiative for Energy Transition); Hoang Anh Tran (University of Science and Technology of Hanoi, Viet Nam, VIET - Vietnam Initiative for Energy Transition)
    Abstract: As governments forced 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? To assess the technology we build an integrated model simulating the economics, environmental and social implications of blending 5% of rice straw in two existing coal power plants in Vietnam. The business value of co-firing is positive –straw is cheaper than coal– but not large enough to motivate the stakeholders. The external social benefit of co-firing –reduced air-borne pollution– are several times larger than the business value. Within that external benefit, the social value of avoided 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. 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. 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, mainly as a way to reduce open-field straw burning. 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
  32. By: Strüker, Jens; Weibelzahl, Martin; Körner, Marc-Fabian; Kießling, Axel; Franke-Sluijk, Ariette; Herrmann, Mike
    Abstract: The successful and rapid achievement of sustainability and climate protection goals is becoming an ever-greater focus of political, economic, and societal action. Against this background, the energy industry contributes and will further contribute to decarbonisation in Germany and throughout Europe. Indeed, it already provides a significant contribution to the Paris Agreement and European Green Deal. In this light, the next transformation phase to a sustainable energy system is inevitably linked to the modernisation and especially to the digitalisation of the energy industry. The aim of this thesis paper is to intensify the discussion on the digitalisation of the energy industry and, in particular, to outline recommendations for flexible and proactive action by all stakeholders. The University of Bayreuth, the Fraunhofer FIT Project Group Business & Information Systems Engineering and the European transmission system operator TenneT are united by the vision of climate-neutral economic growth based on the innovative strength of the European economy. In 2021, decarbonisation is already shaping the digitalisation of the energy industry. Following on from the steps initiated in recent years to move the energy industry towards greater sustainability in the course of the energy transition, the main concern now is to accelerate sustainable growth while continuing to keep the energy supply secure and economical. A crucial building block in this development is the electrification of additional sectors. Accordingly, we discuss the role of grid expansion with respect to sector coupling and emphasise the digitalisation of end-to-end energy industry processes. In this context, we see decentralised digital identities as a promising way of bridging the current digital gap and addressing the need for digital certificates for thorough decarbonisation. In view of the urgency of climate policy action, we recommend an appropriate innovation policy to enable promising solutions to be tested in an agile way and findings to be drawn rapidly. Finally, we offer an overview of the monitoring of carbon emissions in grid expansion projects. This paper is aimed at political decision-makers, energy industry stakeholders, and all citizens interested in energy policy.
    Keywords: Digitalization,decarbonization,energy industry,CO2
    Date: 2021
  33. By: Steinke, Marek; Trautmann, Stefan
    Abstract: Both research and anecdotal evidence suggest that people care about long-run environmental outcomes, but often fail to act sustainably, endangering environmental stability. For a large population sample, we show that people substantially value the environment intrinsically, i.e., even after their own and their kin’s lifespan. Willingness-to-pay for very long-run environmental benefits not experienced by the respondent is similar to that of short-run benefits, experienced by the respondent. However, adding a cooperation problem through uncertainty about other people’s preferences significantly decreases participants’ willingness-to-pay for both time frames, with respondents being pessimistic about others’ willingness to contribute.
    Date: 2021–10–19
  34. By: Teresa Randazzo (Department of Economics, University Of Venice Cà Foscari; Fondazione CMCC, RFF-CMCC EIEE); Filippo Pavanello (University of Bologna; Department of Economics, University Of Venice Ca’ Foscari; Fondazione CMCC, RFF-CMCC EIEE.); Enrica De Cian (Department of Economics, University Of Venice Cà Foscari; Fondazione CMCC, RFF-CMCC EIEE)
    Abstract: Do remittances improve the ability of households to adapt to global warming? We try to answer this question by studying the behaviours of households in Mexico, a country that experiences a large and stable flow of remittances. Nationally representative household surveys indicate that Mexican households respond to the high temperature levels by purchasing air-conditioning, whose adoption is on the rise. We inquire whether and to what extent remittances are used to adopt and operate air-conditioning to maintain thermal comfort at home. We find an important role of remittances in the climate adaptation process, with large differences between coastal and inland regions, as well as among different income groups. We conclude by showing the overall increase in welfare households attain by adopting air-conditioning.
    Keywords: Remittances, Air-conditioning, Climate Change Adaptation, Micro-econometrics, Mexico
    JEL: D12 O13 O15 F24 Q4
    Date: 2021
  35. By: Philip Adams
    Abstract: A carbon tariff is a tax on foreign imports levied based on greenhouse-gas content. Such tariffs are designed to level the playing field for domestic import-competing industries whose costs have risen due to a domestic CO2-price. It is argued that carbon tariffs are necessary to avoid "carbon leakage" -- local production shutting down and moving to countries without strong climate policies. The question addressed in this paper, is what effect might carbon tariffs have on the Australian economy. Using the Victoria University Regional Model (VURM), we evaluate the potential effects arising from carbon tariffs imposed in three regions: the EU, the G7 countries plus Korea, and China. The tariff rates are calculated with carbon prices of: $US70 (= 60 euro) for the EU, and $US39 for the other two regions. Key findings are as follows. 1. Carbon tariffs have little effect on employment in the long-run. However, the negative impact on Australia's terms of trade arising from reductions in world demand increases the real cost of capital, leading to small reductions in capital and hence real GDP. 2. Less real GDP means less real Gross National Income (GNI), a measure of economic welfare).The contractions in real GNI, though small are a little larger than in real GDP because a lower terms of trade means less purchasing power from a given level of real income. 3. Only two industries are projected to experience output and employment losses in each of the three scenarios: Coal mining and the closely related Mining services for whom the coal industry is a major customer. Indeed, the effects on coal production dominate most of the industry outcomes and are key to explaining what happens at the state level. As shown in Table 6, output and employment in those states where coal is over-represented, NSW and QLD, fall. Output and employment in states where coal is much less important rise, reflecting the positive impacts of real devaluation on non-tariffed products. We conclude that at the national level, the carbon tariffs examined are unlikely to have a significant impact. They will, however, have noticeable impacts at the industrial and state levels. Those impacts -- due, in the main, to a reduction in output and employment in the coal sector - will occur in any case for Australia to shift towards a zero emissions economy. The concern is not that these reductions happen, but that they happen in a way which is outside of Australia's control. This loss of sovereignty over what happens to our coal industry might result in non-optimal adjustment with adverse impacts on welfare, regions and workers directly affected.
    Keywords: Carbon tariffs, Zero greenhouse emissions, Coal
    JEL: C68 Q54 Q58
    Date: 2021–10
  36. By: Olatunji A. Shobande (University of Aberdeen, UK); Simplice A. Asongu (Yaoundé, Cameroon)
    Abstract: Purpose – This paper provides an analysis of the energy-carbon Kuznets curve hypothesis (CKC) using a second-generation panel methodology. Design/methodology/approach – Specifically, we investigate whether energy consumption, natural resources, and governance explain the CKC proposition. Our empirical strategy is based on the Westerlund panel cointegration test, augmented mean group (AMG), and vector autoregressive (VAR) panel Granger-causality tests. Findings – The results suggest that the CKC hypothesis is incomplete without these mechanisms, as they play a critical role in reducing carbon emissions in Africa. We recommend improving the environmental standards and proper regulatory and monitoring systems to reduce carbon emissions and promote sustainable development in the continent. Originality/value –The study revisits the CKC hypothesis with particular emphasis on governance and more robust empirical estimation techniques.
    Keywords: carbon cuts; Energy consumption; Governance; Climate crisis; Panel analysis; Africa
    Date: 2021–01
  37. By: Bassem Haidar (LGI - Laboratoire Génie Industriel - CentraleSupélec - Université Paris-Saclay); Maria Teresa Aguilar Rojas
    Abstract: Battery Electric Vehicles (BEVs) and Plug-in Hybrid Electric Vehicles (PHEVs) offer a promising choice to replace fossil-fuel dependent Internal Combustion Engine Vehicles with a low-emission transport solution. To overcome barriers hindering the purchasing activity, governments, automotive manufacturers, and charging infrastructure operators have deployed market-boosting initiatives. Here, we analyze the influence of socio-demographic, technical, and economic factors on the BEV and PHEV markets, separately, in French departments from 2015 to 2019, using fixed-and random-effects panel data regressions. We find BEV/PHEV models numbers and the gasoline price positively associated with both BEV and PHEV adoption. Contrary to slow-and-normal charger density, fast, ultrafast chargers and financial incentives boost the BEV market. Regarding the PHEV model, only fast charger density had a significant and negative influence on the sales from all charging powers densities. Based on the results, policy recommendations are discussed for the automotive industry, the charging operator, and the local authorities.
    Keywords: Charging Infrastructure,Electric Vehicle,Incentives,Panel Data Modelling,Technology Adoption
    Date: 2021–06–07
  38. By: Lengwiler, Yvan (University of Basel)
    Abstract: Global economic convergence and protection of the climate are both worthwhile goals. Yet, there is an inherent tension between them. Greenhouse gases are a waste product that is often emitted in the production process. Limiting such emissions therefore hampers the accumulation of income and capital. I expand Solow's growth model to accommodate green house gases, and use this to estimate the contribution of such emissions to economic development. The sobering insight is that we would not have witnessed any convergence in the last 45 years if poorer countries had not increased greenhouse gas emissions.
    Keywords: climate change, convergence, growth theory, growth accounting, green house gases, GHG, carbon emissions, pollution, poverty, natural resources.
    JEL: O44
    Date: 2021–09–19
  39. By: Raja Ragendra Timilsina (School of Economics and Management, Kochi University of Technology); Yoshinori Nakagawa (School of Economics and Management, Kochi University of Technology); Yoshio Komijo (Waseda University); Koji Kotani (School of Economics and Management, Kochi University of Technology); Tatsuyoshi Saijo (Research Institute for Future Design, Kochi University of Technology)
    Abstract: The current generation affects future generations, but the opposite is not true. This one-way nature of the dependence of generations is the leading cause of many intergenerational problems, such as climate change. These problems are characterized by the fact that the current generation tends to choose actions to their benefit without considering future generations, which we call the intergenerational sustainability dilemma (ISD). This paper designs and implements deliberation experiments representing ISD with a single generation of three people and examines how the dilemma can be solved. “Imaginary future generations†(IFG) is suggested as a treatment in which one person in the current generation is asked to be a representative from the future without any obligations. We analyze the recorded deliberation of generation decisions. We find that intergenerational sustainability is enhanced through deliberations when one generational member emerges naturally as a neutral icebreaker to deliberate (neutral icebreaker is defined as a person who voluntarily opens and activates the deliberation from a neutral standpoint) and/or IFG is present in a generation. Specifically, we demonstrate that when an icebreaker and/or IFG is present during deliberation, generation brings a wider variety of ideas and viewpoints about the ISD, leading to intergenerational sustainability. This research illustrates how a deliberative analysis can be usefully combined with economic experiments as a methodology to reveal human behaviors and preferences for intergenerational decision making.
    Keywords: Intergenerational sustainability, Imaginary future generations, deliberation, economic experiments
    Date: 2021–10
  40. By: Mercy Musakwa; Nicholas M Odhiambo (University of South Africa)
    Abstract: This study investigated the impact of energy consumption on human development in South Africa, using annual data from 1990 to 2019. The study used disaggregated data on energy measures namely: oil products consumption; electricity consumption; renewable energy consumption; natural gas; coal and lignite; and total energy consumption at an aggregate level. Human Development Index (HDI) was used as a measure of human development. By employing autoregressive distributed lag bounds test to cointegration and error correction model, the study found the impact of energy consumption on human development to be positive in the short run when renewable energy was used as a proxy, but insignificant in the long run. When oil products, natural gas and total energy were used as proxies for energy, a negative impact was confirmed in the short run, while an insignificant impact was confirmed in the long run. When electricity, coal and lignite were used as proxies for energy, an insignificant impact was confirmed, irrespective of the time frame considered. The results revealed that the positive impact of renewable energy on human development is not big enough to offset the negative impact of other energy sources. This suggests that South Africa has to continue to expand renewable energy if a positive impact of energy on human development is to be realised.
    Date: 2021–10–14
  41. By: Sambucci, Olena; Sumner, Daniel A.
    Keywords: Labor and Human Capital, Productivity Analysis, Health Economics and Policy
    Date: 2021–08
  42. By: Phoebe Koundouri; Theodoros Zachariadis (The Cyprus Institute & Manager SDSN Europe); Stathis Devves (Athens University of Economics and Business); Angelos Plataniotis (National and Kapodistrian University of Athens)
    Abstract: The European Green Deal was approved in December 2019 by European Union Leaders, laying out a broad set of objectives for a climate-neutral, resource-efficient, technologically sophisticated, and socially equitable continent. The EU has also decided to integrate the Sustainable Development Goals (SDGs) of UN Agenda 2030 in the European Semester, the EU's main mechanism for coordinating national economic and employment strategies. Further, the EU responded to the enormous consequences of Covid-19 by enacting a robust "Next Generation EU" package of policies and resources to help Europe's economy recover while pursuing its green transformation. To link these four major policy initiatives the SDGs, the European Green Deal, the European Semester, and the EU recovery plan we co-authored the report: "Transformations for the Joint Implementation of Agenda 2030 for Sustainable Development and the European Green Deal: A Green and Digital, Job-Based and Inclusive Recovery from the COVID-19 Pandemic", which was released in February 2021 by the UN Sustainable Development Solutions Network Europe (SDSN Europe). In this article, we use part of the work performed in that report to present how the objectives of Agenda 2030 and the European Green Deal can be aligned and provide actionable recommendations to policymakers for this purpose.
    Keywords: European Green Deal, SDGs, Sustainability, Co-integration, EU Economic Policy, Just Transition
    JEL: Q01 Q52 Q54 Q58
    Date: 2021–10–18
  43. By: Bassem Haidar (LGI - Laboratoire Génie Industriel - CentraleSupélec - Université Paris-Saclay); Fabrice Vidal; Pascal da Costa; Jan Lepoutre
    Abstract: The European Commission adopted Regulation number (EU)2019/631, setting new EU fleetwide CO2 emission targets for 2025 and 2030, for newly registered passenger cars. Automotive manufacturers must determine their targets for CO2 targets based on their fleets' weight in 2021. These standards, which will become stricter by 15% in 2025 and 35% compared to 2021, cannot be achieved without fleet electrification. This study compares ICEVs fleet replacement effects by BEVs and PHEVs on CO2 compliance and production costs. To address this tradeoff, we minimized the production costs of replacing ICEVs with BEVs and PHEVs for 12 scenarios: 4 vehicles Segments and three years: 2021, 2025, 2030. Results show that for all vehicles Segments, the introduction of BEVs and PHEVs into the vehicle fleet reduces the costs of CO2 compliance relative to a pure ICEV scenario. Automotive manufacturers must sell required quotas identified in this study, depending on the vehicle's Segment, BEVs, and PHEVs, to ensure minimum costs. Results show that it is more beneficial for automakers to respect the CO2 engagement than to pay penalties. Generally, the minimum costs are achieved favouring PHEVs rather than on BEVs, regardless of the Segment, because of the fewer battery installed. Finally, we analyse the results and compare them to the directive of the European Commission. We recommend future research to consider the vehicle's real fuel consumption instead of standard cycle fuel consumption.
    Keywords: Alternative Powertrains,Battery Electric Vehicles,CO2 fleet emissions,CO2 European Standards,Plug-in Hybrid Electric Vehicles,Portfolio Transformation
    Date: 2021
  44. By: Stefano Di Bucchianico; Federica Cappelli
    Abstract: Given that the richest 10% of the world population is responsible for more than half of global greenhouse gas emissions between 1990 and 2015, understanding the sources of excessive consumption of wealthier households and the ways to reduce them becomes especially important. Indeed, subsistence emissions are the emissions generated to satisfy basic needs, while luxury emissions are those generated to satisfy non-basic needs and that can, thus, be avoided or reduced. We make use of the ‘integrated wage-commodity sector’ model to study this issue. By using this model, we are able to connect the double role of luxury goods. On the one hand, they are the main reason why profits exist (together with surplus production of other wage-goods), given that profitability stems from surplus production delivered by workers. On the other hand, they are the major constituent of wasteful luxury consumption and, hence, major drivers of CO2 emissions. Three different scenarios (‘green growth’, ‘reformist’, and ‘just transition’) are depicted and connected to the possible policy actions to be undertaken to address social and environmental predicaments. The just transition scenario seems to be the only viable option to respect both social and environmental boundaries.
    Keywords: rate of profit, luxury goods, GHG emissions, decent living standard, climate change
    JEL: B24 Q52 Q57
    Date: 2021–10
  45. By: Kim, Hyunseok; Moschini, GianCarlo
    Keywords: Environmental Economics and Policy, Production Economics, International Development
    Date: 2021–08
  46. By: Saha, Bijeta Bijen
    Keywords: Environmental Economics and Policy, Resource/Energy Economics and Policy, Community/Rural/Urban Development
    Date: 2021–08
  47. By: 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: Vietnam's recent energy transition experience shows that grid congestion issues limit how fast a country can turn to solar PV and wind power. Utility-scale battery storage could alleviate problems by time-shifting the variable electricity production, deferring the urgency to upgrade the transmission network. However, the technology is hardly bankable now in low and middle-income countries. We propose that forming a collective of transmission network operators may accelerate access to this technology.
    Date: 2021–10–01
  48. By: Waldemar Marz; Suphi Sen
    Abstract: The long-term trend toward more work from home due to digitization has found a strong new driver, the Covid-19 pandemic. The profound change in urban mobility patterns supports the often-held view that reducing the number of commuting trips can lower carbon emissions to a certain degree. We investigate this optimistic view from a long-run perspective in a monocentric urban model with household-level vehicle choice based on fuel efficiency. In the medium run, fewer trips lead to the choice of less fuel-efficient vehicles. In addition, with lower annual driving costs to the city center, households change their location in the long run toward longer commuting trips, but cheaper housing, implying an adjustment in the real-estate market. These changes in vehicle choice and the urban form largely eliminate the initial environmental benefits. Binding fuel economy standards completely prevent the medium-run drop in fuel efficiency, but slightly exacerbate the long-term increase in commuting trip length.
    Keywords: telecommuting, monocentric city, fuel economy, carbon emissions
    JEL: H23 L90 Q48 R40
    Date: 2021
  49. By: Bassem Haidar (LGI - Laboratoire Génie Industriel - CentraleSupélec - Université Paris-Saclay); Fabrice Vidal; Pascal da Costa; Jan Lepoutre
    Abstract: The European Commission adopted Regulation number (EU)2019/631, setting new EU fleetwide CO2 emission targets for 2025 and 2030, for newly registered passenger cars. Automotive manufacturers must determine their targets for CO2 targets based on their fleets' weight in 2021. These standards, which will become stricter by 15% in 2025 and 35% compared to 2021, cannot be achieved without fleet electrification. This study compares ICEVs fleet replacement effects by BEVs and PHEVs on CO2 compliance and production costs. To address this tradeoff, we minimized the production costs of replacing ICEVs with BEVs and PHEVs for 12 scenarios: 4 vehicles Segments and three years: 2021, 2025, 2030. Results show that for all vehicles Segments, the introduction of BEVs and PHEVs into the vehicle fleet reduces the costs of CO2 compliance relative to a pure ICEV scenario. Automotive manufacturers must sell required quotas identified in this study, depending on the vehicle's Segment, BEVs, and PHEVs, to ensure minimum costs. Results show that it is more beneficial for automakers to respect the CO2 engagement than to pay penalties. Generally, the minimum costs are achieved favouring PHEVs rather than on BEVs, regardless of the Segment, because of the fewer battery installed. Finally, we analyse the results and compare them to the directive of the European Commission. We recommend future research to consider the vehicle's real fuel consumption instead of standard cycle fuel consumption.
    Date: 2021
  50. By: Nordhaus, William (Yale University)
    Abstract: I first saw light in Albuquerque, New Mexico, USA, at the dawn of World War II. My earliest memories are of the warm climate, skiing in winter, trout fishing in summer, and a fragrant alfalfa field outside my window.
    Keywords: long-term growth; climate change;
    JEL: O00
    Date: 2021–10–10

This nep-ene issue is ©2021 by Roger Fouquet. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.