|
on Energy Economics |
| By: | Rachel Feldman (Department of Economics, Georgetown University); Arik Levinson (Department of Economics, Georgetown University) |
| Abstract: | State-level renewable portfolio standards (RPSs) aim to encourage renewable energy and discourage greenhouse gas (GHG) emissions from the electric power sector in the United States. Do they work? Some prominent government agencies and advocacy groups assert that U.S. renewables growth has been largely due to RPSs. That seems unlikely, given that in most regions, renewables exceed RPS requirements. But it’s not an easy question to answer, thanks to interstate trading and the possibility that states with abundant renewable resources might set the most ambitious RPS goals. We combine the best features of three recent academic studies, using reduced-form and instrumental variables approaches. In some specifications, RPSs do appear to lower carbon emissions and boost wind and solar generation. But the effects are small—consistent with the academic findings and in contrast to the public claims and policy goals. Classification- Q42 Q48 |
| Keywords: | solar and wind energy, fossil fuels, renewable energy credits |
| Date: | 2022–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:geo:guwopa:gueconwpa~22-22-01&r= |
| By: | Pejman Bahramian (Department of Economics, Queen's University) |
| Abstract: | The Province of Ontario has had a very aggressive program of introducing wind electricity generation technologies into its generation supply mix. This program, combined with the rigid baseload production by nuclear and hydro plants, has created a surplus baseload electricity supply for 20 years. Pumped hydro storage (PHS) has been suggested as an economically viable technology for storing energy produced by non-dispatchable wind energy sources. In this vein, an analytical framework has been developed to explore the feasibility of the PHS facility to manage the surplus supply of electricity and compare its cost performance with the alternative gas power plants. The analysis is undertaken for a situation where the PHS plant uses surplus energy for the first 20 years of its operation, and additional wind energy would be provided for the second 20 years of the project’s life. It is found that given the level of capital costs of building PHS in Ontario, the PHS expansion is not economically cost-effective to utilize the projected off-peak surpluses. The economic analysis also illustrates that in the context of Ontario, the integration of PHS with wind power generation will have a negative impact on the Canadian economy in all circumstances. This loss is borne mainly by the electricity consumers of Ontario. Even considering the cost of GHG emissions from a world perspective, this investment is not worthwhile. It would be better socially from the perspective of the world if the surplus baseload electricity from Ontario would be given away to the US free of charge. It could then be used to reduce generation by natural gas plants in the USA, hence reducing GHG emissions globally, without any incremental cost to Canada. |
| Keywords: | economic analysis, electricity, pumped hydro storage, wind power |
| JEL: | O55 D61 Q42 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1478&r= |
| By: | Ben Youssef, Slim |
| Abstract: | We evaluate the relationships between renewable energy consumption, net energy imports, military expenditures, arms exports, gross domestic product, and carbon dioxide emissions by using annual data about the USA during the period 1980-2016. The autoregressive distributed lag approach and the vector error correction model are used. Long-run unidirectional causalities are running from all considered variables to net energy imports and arms exports. We show that arms exports have a positive long-run effect on both renewable energy consumption and on net energy imports. Military expenditures have a positive long-term effect on renewable energy consumption, but they have a negative long-term effect on net energy imports. We recommend that the United States should prefer to export sophisticated weapons to its allies rather than intervene directly and militarily in the event it should secure its supply of imported fossil fuels; we also recommend increasing the R&D budget of the US Department of Defense allocated to innovations in renewable energies. |
| Keywords: | Renewable energy; net energy imports; arms exports; military expenditures; autoregressive distributed lag; USA. |
| JEL: | C32 H56 O51 Q42 |
| Date: | 2020–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:110959&r= |
| By: | Maximilien Germain (EDF R&D OSIRIS - Optimisation, Simulation, Risque et Statistiques pour les Marchés de l’Energie - EDF R&D - EDF R&D - EDF - EDF, EDF R&D - EDF R&D - EDF - EDF, EDF - EDF, LPSM (UMR_8001) - Laboratoire de Probabilités, Statistiques et Modélisations - SU - Sorbonne Université - CNRS - Centre National de la Recherche Scientifique - UP - Université de Paris); Huyên Pham (LPSM (UMR_8001) - Laboratoire de Probabilités, Statistiques et Modélisations - SU - Sorbonne Université - CNRS - Centre National de la Recherche Scientifique - UP - Université de Paris, CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique, FiME Lab - Laboratoire de Finance des Marchés d'Energie - EDF R&D - EDF R&D - EDF - EDF - CREST - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres); Xavier Warin (EDF R&D OSIRIS - Optimisation, Simulation, Risque et Statistiques pour les Marchés de l’Energie - EDF R&D - EDF R&D - EDF - EDF, EDF R&D - EDF R&D - EDF - EDF, EDF - EDF, FiME Lab - Laboratoire de Finance des Marchés d'Energie - EDF R&D - EDF R&D - EDF - EDF - CREST - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres) |
| Abstract: | We consider the control of McKean-Vlasov dynamics (or mean-field control) with probabilistic state constraints. We rely on a level-set approach which provides a representation of the constrained problem in terms of an unconstrained one with exact penalization and running maximum or integral cost. The method is then extended to the common noise setting. Our work extends (Bokanowski, Picarelli, and Zidani, SIAM J. Control Optim. 54.5 (2016), pp. 2568–2593) and (Bokanowski, Picarelli, and Zidani, Appl. Math. Optim. 71 (2015), pp. 125–163) to a mean-field setting. The reformulation as an unconstrained problem is particularly suitable for the numerical resolution of the problem, that is achieved from an extension of a machine learning algorithm from (Carmona, Laurière, arXiv:1908.01613 to appear in Ann. Appl. Prob., 2019). A first application concerns the storage of renewable electricity in the presence of mean-field price impact and another one focuses on a mean-variance portfolio selection problem with probabilistic constraints on the wealth. We also illustrate our approach for a direct numerical resolution of the primal Markowitz continuous-time problem without relying on duality. |
| Keywords: | mean-field control,state constraints,neural networks |
| Date: | 2021–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03498263&r= |
| By: | Chengyuan Han; Hannes Hilger; Eva Mix; Philipp C. B\"ottcher; Mark Reyers; Christian Beck; Dirk Witthaut; Leonardo Rydin Gorj\~ao |
| Abstract: | The large variability of renewable power sources is a central challenge in the transition to a sustainable energy system. Electricity markets are central for the coordination of electric power generation. These markets rely evermore on short-term trading to facilitate the balancing of power generation and demand and to enable systems integration of small producers. Electricity prices in these spot markets show pronounced fluctuations, featuring extreme peaks as well as occasional negative prices. In this article, we analyse electricity price time series from the European EPEX market, in particular the hourly day-ahead, hourly intraday, and 15-min intraday market prices. We quantify the fluctuations, correlations, and extreme events and reveal different time scales in the dynamics of the market. The short-term fluctuations show remarkably different characteristics for time scales below and above 12 hours. Fluctuations are strongly correlated and persistent below 12 hours, which contributes to extreme price events and a strong multifractal behaviour. On longer time scales, they get anti-correlated and price time series revert to their mean, witnessed by a stark decrease of the Hurst coefficient after 12 hours. The long-term behaviour is strongly influenced by the evolution of a large-scale weather patterns with a typical time scale of four days. We elucidate this dependence in detail using a classification into circulation weather types. The separation in time scales enables a superstatistical treatment, which confirms the characteristic time scale of four days, and motivates the use of $q$-Gaussian distributions as the best fit to the empiric distribution of electricity prices. |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2112.03031&r= |
| By: | Lijing Zhu (China University of Petroleum); Jingzhou Wang (China University of Petroleum); Arash Farnoosh (IFPEN - IFP Energies nouvelles - IFPEN - IFP Energies nouvelles, IFP School); Xunzhang Pan (China University of Petroleum) |
| Abstract: | To reduce traffic congestion and protect the environment, license plate control (LPC) policy has been implemented in Beijing since 2011. In 2019, 100,000 vehicle license plates were distributed, including 60,000 for electric vehicle (EV) and 40,000 for gasoline vehicle (GV). However, whether the current license plate allocation is optimal from a social welfare maximization perspective remains unclear. This paper proposes a two-level Stackelberg game which portrays the interaction between vehicle applicants and the government to quantify the optimal EV license plates under the LPC policy in Beijing. The equilibrium number of EV license plates derived from the Stackelberg model is 58,800, which could increase the social welfare by 0.38%. Sensitivity analysis is conducted to illustrate the impact of important influential factors — total license plate quota, vehicle rental fee, and energy price — on EV adoption. The LPC policy under COVID-19 is also studied through a scenario analysis. If the government additionally increases the total quota by 20,000, 24% could be allocated to GV and 76% to EV. One third reduction of the current vehicle rental fee could increase EV license plates by 10.5%. Interms of energy prices, when gasoline price is low, reducing electricity price could contribute to EV adoption significantly, while that effect tapers off as the gasoline price rises. |
| Keywords: | License plate quota,Stackelberg game theory,License plate control (LPC) policy,Electric vehicle |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03500766&r= |
| By: | Ian M. Trotter; Torjus F. Bolkesj{\o}; Eirik O. J{\aa}stad; Jon Gustav Kirkerud |
| Abstract: | Weather is one of the main drivers of both the power demand and supply, especially in the Nordic region which is characterized by high heating needs and a high share of renewable energy. Furthermore, ambitious decarbonization plans may cause power to replace fossil fuels for heating in the Nordic region, at the same time as large wind power expansions are expected, resulting in even greater exposure to weather risk. In this study, we quantify the increase in weather risk resulting from replacing fossil fuels with power for heating in the Nordic region, at the same time as variable renewable generation expands. First, we calibrate statistical weather-driven power consumption models for each of the countries Norway, Sweden, Denmark, and Finland. Then, we modify the weather sensitivity of the models to simulate different levels of heating electrification, and use 300 simulated weather years to investigate how differing weather conditions impact power consumption at each electrification level. The results show that full replacement of fossil fuels by power for heating in 2040 leads to an increase in annual consumption of 155 TWh (30%) compared to a business-as-usual scenario during an average weather year, but a 178 TWh (34%) increase during a one-in-twenty weather year. However, the increase in the peak consumption is greater: around 50% for a normal weather year, and 70% for a one-in-twenty weather year. Furthermore, wind and solar generation contribute little during the consumption peaks. The increased weather sensitivity caused by heating electrification causes greater total load, but also causes a significant increase in inter-annual, seasonal, and intra-seasonal variations. We conclude that heating electrification must be accompanied by an increase in power system flexibility to ensure a stable and secure power supply. |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2112.02893&r= |
| By: | Hlongwane, Nyiko Worship; Daw, Olebogeng David |
| Abstract: | This study examines the challenges and opportunities of electricity generation from coal on growth of South African economy. The study utilizes the available annual time series data collected from secondary sources (World Bank) spanning for the period from 1971 to 2015. The study employs the Autoregressive Distributed Lag (ARDL) model and an Error Correction Model (ECM) to analyse the challenges and opportunities of coal-fired electricity generation on growth South African economy. Statistical results from revealed a positive statistically insignificant short run and positive statistically significant long run relationship between electricity generated from coal and economic growth in South Africa. Renewable electricity generation also contribute positively to economic growth both in the short and long run period. The policy implication from this study is that the policy makers need to acknowledge the positive contribution of coal-fired electricity generation, revise policies on decommissioning of these powerplants, implement policies that encourage coal-fired electricity generation in a way that is environmentally friendly and increase investment in renewable electricity generation to boosts economic growth in South Africa. |
| Keywords: | Electricity generation, Economic growth, Autoregressive Distributed Lag (ARDL)Model, Renewable electricity, South Africa |
| JEL: | C1 C29 P19 Q43 |
| Date: | 2021–12–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:110963&r= |
| By: | Edmond Noubissi (University of Dschang, Cameroon); Loudi Njoya (University of Dschang, Cameroon) |
| Abstract: | This paper contributes to the literature on the relationship between gender and the environment. There are indeed very few studies on this topic, and existing studies have not yet investigated the channels through which women's presence in parliaments affects the environment. We use a stochastic impact model extended to the population, wealth and technology regression model to estimate both the effect and transmission of women parliamentarians on the environment in 25 African countries from 2000 to 2016. The empirical results show that the presence of women in parliament contributes to the improvement of environmental quality in Africa. In addition, the mediation analysis reveals that women parliamentarians not only have a direct positive effect on the environment but also a positive indirect effect through their impact on per capita income, corruption and development assistance. To enhance the positive effects of women parliamentarians on the environment, governments should design policies to encourage women to participate in economic activities, integrate anti-corruption programmes and participate in the management of development assistance. |
| Keywords: | Women's parliamentary, environmental quality, African countries |
| JEL: | F63 F64 J16 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:exs:wpaper:21/100&r= |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:abh:wpaper:21/069&r= |
| By: | Hlongwane, Nyiko Worship; Daw, Olebogeng David |
| Abstract: | This study analysis the increase in electricity generation and economic growth in South Africa. The study employs time series data spanning from 1985 to 2020. The study employs an Autoregressive Distributed Lag Model (ARDL), Error Correction Model and Granger causality test to analyse the short and long run relationships between the variables. The empirical results revealed that there is a positive relationship between electricity generation and economic growth both in the short and long run period. The study therefore proposed the increase in electricity generation to increase economic growth in South Africa. |
| Keywords: | Electricity generation, Economic growth, ARDL, Granger causality, South Africa. |
| JEL: | C01 C32 E02 O4 Q43 |
| Date: | 2021–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:111018&r= |
| By: | Beatriz Manotas-Hidalgo (Universidad Publica de Navarra) |
| Abstract: | This paper examines how the pollution generated by oil operations in Nigeria can affect agricultural total factor productivity. I analyze oil spills, which are the main ecological disaster in Nigeria and lead to major environmental, economic, and social problems. Following a consumer-producer household framework, and applying a difference-and-difference approach, I estimate an agricultural production function. I find that farmers located less than 10 kilometers from oil spills suffer a relative reduction in agricultural output of around 2.73%. I also examine alternative mechanisms and find that oil-spill pollution can explain my results. I detect less owner-occupied land and a drop in labor income in urban areas close to oil spills, which could also be explained by a decrease in the labor productivity component. This study highlights an externality through which the oil industry affects living conditions in rural areas and stresses the importance of clean-up in areas close to oil spills. |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:nav:ecupna:2109&r= |
| By: | Samba Diop (Alioune Diop University, Bambey, Senegal); Simplice A. Asongu (Yaoundé, Cameroon); Vanessa S. Tchamyou (Yaoundé, Cameroon) |
| Abstract: | This paper measures the macroeconomic impact of recent political crisis, protest and uprisings in Africa with the generalized synthetic control method and evaluates the role played by natural resource dependence on the modulation of the impact. We find that political crisis, protests and uprisings have a significant and negative impact on economic growth while the impact is positive on investment and price level. For economic growth, the deviation of the actual series from the counterfactual is negative, instantaneous, persistent and highly significant; indicating non-negligible costs of the shock. Indeed, dependence on natural resources amplifies the negative effect of political crisis, protests and uprisings on GDP. Finally, the more the treated country depends on natural resources, the more it becomes resilient from the investment losses caused by political crisis. |
| Keywords: | political conflicts; economic growth; Africa |
| JEL: | F52 K42 O17 O55 P16 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:abh:wpaper:21/060&r= |
| By: | Joseph I. Uduji (University of Nigeria, Nsukka, Nigeria); Elda N. Okolo-Obasi (University of Nigeria, Nsukka, Nigeria); Simplice A. Asongu (Yaoundé, Cameroon) |
| Abstract: | Purpose – The purpose of this paper is to critically examine the multinational oil companies’ (MOCs) corporate social responsibility (CSR) initiatives in Nigeria. Its special focus is to investigate the impact of the global memorandum of understanding (GMoU) on reducing incidents of electoral violence in the oil-producing communities. Design/methodology/approach – This paper adopts a survey technique, aimed at gathering information from a representative sample of the population, as it is essentially cross-sectional, describing and interpreting the current situation. A total of 1200 households were sampled across the Niger Delta region of Nigeria. Findings – The results from the use of a combined propensity score matching and logit model indicate that GMoU model made significant impact in deterring occurrences of electoral violence, when interventions on cluster development boards (CDBs) are designed to mitigate the intricate of political clashes in the region. Practical implication – This implies that CSR interventions of MOCs play a vital role in reducing incidents of electoral violence in Nigeria’s oil producing region. Social implication – Reducing the increasing electoral violence in the oil host communities, will in turn create an enabling environment for more extensive and responsible business of Multinational Corporation in sub-Saharan Africa. Originality/value –This paper extends and contributes to the literature on CSR initiatives of multinational enterprises in developing countries and rationale for demands for social projects by host communities. It concludes that business has an obligation to help in solving problems of public concern. |
| Keywords: | Electoral violence, corporate social responsibility, multinational oil companies, sub-Saharan Africa |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:abh:wpaper:21/063&r= |
| By: | Chen, Yunnan |
| Abstract: | Nigeria has been a primary destination for Chinese investment in the last two decades, as Chinese entrepreneurs and investors have been drawn by rich resources and huge market potential. However, challenges remain in harnessing the potential of this growing manufacturing investment for the structural transformation of the economy. This paper assesses the evolving landscape of Chinese investment in manufacturing and potential for technology transfers, finding a growing Chinese presence in manufacturing sectors, particularly in construction and consumer sectors. However technology transfer within these is highly uneven, and challenged by economic and policy instability in recent years. |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cariwp:202036&r= |
| By: | Dan Zhang (IFP School); Frédéric Lantz (IFP School, IFPEN - IFP Energies nouvelles - IFPEN - IFP Energies nouvelles); Arash Farnoosh (IFP School, IFPEN - IFP Energies nouvelles - IFPEN - IFP Energies nouvelles) |
| Abstract: | This paper examines the price discovery of three international crude oil futures markets (WTI, Brent, INE) before and after the outbreak of the COVID-19 with the application of information share and component share model. Our study shows that there is a structural break of the date of 6th of March,2020 in each price series with Zivot and Andrew's unit root test. Using Gregory and Hansen cointegration tests, cointegration relationships with structural break in May,2020 are detected. According to results of IS and CS model of Yan and Zviot (2010), Brent futures price mainly plays a leading role of WTI and INE futures price and occupies an absolute dominant position all the time in the three crude oil futures markets systems. In the post-covid period, the price discovery efficiency of INE has been improved slightly but is still weak compared with other two markets. After the outbreak of COVID-19, the dominant position in price contribution in the relationship with INE has transferred from Brent to WTI. These findings offer practical implications for regulators and portfolio risk managers during the unprecedented uncertainty period provoked by the COVID-19 pandemic. |
| Keywords: | Oil Market,Price discovery,Structural Break |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03500719&r= |
| By: | Babacar Seck; Robert J. Elliott |
| Abstract: | This paper introduces a new type of risk measures, namely regime switching entropic risk measures, and study their applicability through simulations. The state of the economy is incorporated into the entropic risk formulation by using a Markov chain. Closed formulae of the risk measure are obtained for futures on crude oil derivatives. The applicability of these new types of risk measures is based on the study of the risk aversion parameter and the convenience yield. The numerical results show a term structure and a mean-reverting behavior of the convenience yield. |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2112.13041&r= |
| By: | Xu, Yuelu; Elbakidze, Levan; Etienne, Xiaoli |
| Abstract: | The rapid development of unconventional oil and gas (UOG) has raised public concerns about its land use and competition with agriculture. Using county-level data from 1997 to 2018, we find that on average, UOG development negatively affected crop acreage in the contiguous U.S. However, there exists significant regional heterogeneity. The relationship is positive in Southwestern region, U-shaped in Great Plains, and negative in Appalachia. There is significant difference in crop acreage between counties with and without UOG after 2008 in the contiguous U.S. and Great Plains. The reduction in crop acreage after 2008 was highest in Great Plains. |
| Keywords: | Agricultural and Food Policy, Land Economics/Use, Resource /Energy Economics and Policy |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:assa22:316536&r= |
| By: | Lutz Kilian; Xiaoqing Zhou |
| Abstract: | Predictions of oil prices reaching $100 per barrel during the winter of 2021/22 have raised fears of persistently high inflation and rising inflation expectations for years to come. We show that these concerns have been overstated. A $100 oil scenario of the type discussed by many observers, would only briefly raise monthly headline inflation, before fading rather quickly. However, the short-run effects on headline inflation would be sizable. For example, on a year-over-year basis, headline PCE inflation would increase by 1.8 percentage points at the end of 2021 under this scenario, and by 0.4 percentage points at the end of 2022. In contrast, the impact on measures of core inflation such as trimmed mean PCE inflation is only 0.4 and 0.3 percentage points in 2021 and 2022, respectively. These estimates already account for any increases in inflation expectations under the scenario. The peak response of the 1-year household inflation expectation would be 1.2 percentage points, while that of the 5-year expectation would be 0.2 percentage points. |
| Keywords: | scenario, inflation, expectation, oil price, gasoline price, household survey, core, pandemic, recovery |
| JEL: | E31 E52 Q43 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9455&r= |
| By: | Witos, Krzysztof; Wójcik-Czerniawska, Agnieszk; Grzymała, Zbigniew |
| Abstract: | The paper addresses environmental impact of using pallets and compares the performance of plastic and wooden pallets regarding to carbon footprint and waste, they produce. Common wisdom has it, that wooden pallets are environmentally friendly. Plastic pallets, due to the material they are being made of, are regarded to be a potential source of pollution in land, air, and water. We have gathered, evaluated, extracted and/or calculated data showing how much CO2, and solid waste is generated due to specific wooden and plastic pallet operations. The Life Cycle Assessment method has been used, with primary data extracted from our own studies and experience or taken from reputable sources we quote in our work. |
| Keywords: | Environmental Economics and Policy |
| Date: | 2021–09–21 |
| URL: | http://d.repec.org/n?u=RePEc:ags:haaepa:316601&r= |
| By: | Eric Jondeau (Swiss Finance Institute; University of Lausanne - Faculty of Business and Economics (HEC Lausanne); Swiss Finance Institute); Benoît Mojon (Bank for International Settlements (BIS)); Luiz A. Pereira da Silva (Bank for International Settlements (BIS)) |
| Abstract: | In this paper, we build portfolios with decreasing carbon footprint, which passive investors can use as new Paris-consistent (PC) benchmarks and have the same risk- adjusted returns as business as usual (BAU) benchmarks. As the distribution of firms' carbon intensity is very skewed, excluding a small fraction of highly polluting firms can massively reduce the carbon footprint of a portfolio of corporate stocks. We identify the worst polluters globally, exclude them from the portfolio, and re- allocate the proceeds so as to keep sectoral and regional exposures similar to those of the business as usual (BAU) benchmark. This approach limits divestment from corporates in Emerging Countries that would result from implementing exclusions and reinvestment without the objective of preserving regional exposures. We show that reducing the carbon footprint of the portfolio by 64% in 10 years would be obtained by excluding sequentially up to 11% of the corporates, which together amount to less than 6% of the global market portfolio. While this reallocation preserves regional and sectoral exposures similar to those of the BAU benchmark, it does not change its risk-adjusted return. We define PC benchmark portfolios at the global level, for Emerging Countries, Europe, North America, and the Pacific. |
| Keywords: | Portfolio carbon footprint, Green and brown assets, Alignment with Paris Agreement |
| JEL: | G11 G24 Q56 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp2191&r= |
| By: | Hao, Miao; Lyv, Kangjuan; Li, Shiyuan; Hu, Wuyang |
| Abstract: | Environmental regulation can be an effective tool for the government to balance the relationship between the ecology and economic development. In this paper, the corporate life cycle theory is incorporated into environmental regulation policy evaluation, and the impact of environmental regulation on the output of innovation by China’s enterprises in different development stages is analyzed. The results show that environmental regulation significantly promotes innovation and particularly green innovation of all enterprises in China. The effect is especially strong for enterprises in the start-up and growing stage, and the impetus for innovation among private enterprises is significantly greater than that of state-owned enterprises. The mechanism behind these results is also analyzed. This paper extends the existing theoretical framework and provides empirical reference for future environmental policy research. Also, we provide guidance for the government to formulate environmental policies according to the development tasks of different stages and the nature of different enterprises, so as to achieve the social and economic goals effectively. |
| Keywords: | Corporate Life Cycle; Two Control Zones; Innovation; Environmental Regulation; Difference-in-Difference |
| JEL: | L51 O44 Q55 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:110971&r= |
| By: | Congressional Budget Office |
| Abstract: | CBO finds that aircraft availability rates—measured as the percentage of time aircraft can be flown on training or missions—declined in both the Air Force and the Navy from 2001 through 2019, but the decline was more marked in the Navy, which includes the Marine Corps. The availability rates of the Navy’s fighters and attack aircraft fell considerably more than the rates of the Air Force’s fighters and attack aircraft. Flying hours per aircraft declined in both the Air Force and the Navy. |
| JEL: | H56 H57 L64 N42 N62 |
| Date: | 2022–01–05 |
| URL: | http://d.repec.org/n?u=RePEc:cbo:report:57433&r= |
| By: | Mohajan, Haradhan |
| Abstract: | During the first industrial revolution (IR1) human and animal labor technology converted into machinery, such as the steam engine, the spinning jenny, puddling and rolling processes for making iron, coke smelting, etc. During the second industrial revolution (IR2) electricity, internal combustion engine, indoor plumbing, chemical industries, etc. technologies are developed. The third industrial revolution (IR3) began in the 1950s that is considered as the move from mechanical and analogue electronic technology to digital electronics. Nano, bio, and IT technologies, 3D printing, artificial intelligence, robotics, etc. are the most important driver of the IR3. During the IR1&2s only Western Europe and the USA were developed but during the IR3 the world becomes about 10 times wealthier, and development spreads almost every part of the world. In the IR3 there have been developed thousands of businesses organizations and millions of jobs globally. Major modern inventions are happened in the IR3. Economic development, development of transportation, development of 3D printing, robotics technologies, fab lab, etc. are extraordinary activities during the IR3. In the IR3 standard of living and life expectancy of every nation has increased than that of the IR1&2s. The IR3 has also some negative impacts, such as air pollution, biodiversity reduction, water pollution, habitat destruction, greenhouse gas emissions, global warming and climate change, etc. This study has tried to discuss various aspects of IR3 in some details. |
| Keywords: | Digital Revolution, 3D Printing, Economic Development, Industrial Revolution, Renewable Energy, Robotics |
| JEL: | B15 B3 D6 I3 N1 O1 Q5 |
| Date: | 2021–09–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:110972&r= |
| By: | Shaikh M.S.U. Eskander; Khandokar Istiak |
| Abstract: | Understanding how energy efficiency improvement can mitigate CO2 emissions is critical for global climate change policies to ensure environmental sustainability and a low carbon future. Being the catalyst for training future generations, universities can play an instrumental role in this vision by adopting energy-saving and CO2 reduction strategies. We investigate how energy efficiency and affluence affect the emissions reduction experience of the UK universities. Using HESA data, a centralized system of reporting energy use and corresponding emissions, we adopt a two-step estimation strategy to first develop efficiency and activity indices for residential and non-residential energy use and emissions, and then to employ a two-step system GMM estimation procedure that captures the environment-economy-energy nexus to analyze the impact of the energy efficiency on CO2 emissions. For 122 UK universities over the period between 2008-09 and 2018-19, econometric results, which are robust to alternative specifications and restricted samples, confirm higher energy efficiency is conducive to lower emissions. However, the less-than-elastic relationship between energy efficiency and emissions implies that the UK universities will not be able to comply with their net-zero objectives unless they increase their investments in renewables and energy-efficient technologies. These findings will draw interests from pro-environment activists, university and government administrators, and policymakers. |
| Keywords: | Emissions, Energy, Index decomposition, University |
| JEL: | Q41 Q42 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2021-94&r= |
| By: | Rui Mano; Mr. Philip Barrett; Katharina Bergant; Jean Chateau |
| Abstract: | The run up to the 26th Climate Change Conference has brought tackling climate change to the fore of global policy making. In this context, the U.S. administration has recently unveiled new climate targets. This paper elaborates on the administration’s plans and uses two models developed at the IMF to illustrate key macro-climate trade-offs. First, a model with endogenous fuel-specific technological change shows that subsidies cannot substitute for explicit carbon pricing and that even a moderate carbon tax can greatly economize on the overall fiscal cost of the package. Second, a rich sectoral model shows that there are only very marginal economic costs from front-loading the decarbonization of the power sector but there are large accompanying environmental benefits. Regulations can be effective in the power sector because they provide an appropriate shadow cost to carbon. However, a carbon tax would still be more efficient and easier to administer. Finally, as the economy transitions away from fossil-fueled power generation, there would be a significant reallocation of labor across sectors and locations that would need to be handled carefully to limit the social costs of the transition. |
| Keywords: | Climate Change; subsidies; carbon tax; power sector. |
| Date: | 2021–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2021/290&r= |
| By: | Fernández-Amador, Octavio; Oberdabernig, Doris; Tomberger, Patrick |
| Abstract: | The recent Intergovernmental Panel on Climate Change (IPCC) Sixth Assessment Report 2021 underscores the need to curb methane emissions. In this article published in Empirical Economics (open access), the authors investigate the convergence of methane footprints, highlight the difficulties to achieve methane abatement in the medium run, and argue that the formulation of climate policies should deal with methane emissions separately. Click on the link below to read the full article. |
| Date: | 2022–01–05 |
| URL: | http://d.repec.org/n?u=RePEc:wti:papers:1342&r= |
| By: | Philip Lubin; Alexander N. Cohen |
| Abstract: | Large scale directed energy offers the possibility of radical transformation in a variety of areas, including the ability to achieve relativistic flight that will enable the first interstellar missions, as well as rapid interplanetary transit. In addition, the same technology will allow for long-range beamed power for ion, ablation, and thermal engines, as well as long-range recharging of distant spacecraft, long-range and ultra high bandwidth laser communications, and many additional applications that include remote composition analysis, manipulation of asteroids, and full planetary defense. Directed energy relies on photonics which, like electronics, is an exponentially expanding growth area driven by diverse economic interests that allows transformational advances in space exploration and capability. We have made enormous technological progress in the last few years to enable this long-term vision. In addition to the technological challenges, we must face the economic challenges to bring the vision to reality. The path ahead requires a fundamental change in the system designs to allow for the radical cost reductions required. To afford the full-scale realization of this vision we will need to bring to fore integrated photonics and mass production as a path forward. Fortunately, integrated photonics is a technology driven by vast consumer need for high speed data delivery. We outline the fundamental physics that drive the economics and derive an analytic cost model that allows us to logically plan the path ahead. |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2112.13911&r= |
| By: | Stefan Ambec (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); Philippe de Donder (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: | We analyze environmental policy in a model where some consumers (dubbed green) derive warm glow from buying a good of a higher environmental quality, and where green firms differentiate products on their environmental quality to enjoy market power. For any given pollution level, emission taxes turn out to be less cost-effective than an emission standard because taxation always induces a higher wedge between the environmental qualities of products. By stark contrast, consumers prefer taxes to standards when the warm glow intensity is not too large. Also, the ability of green firms to exert market power makes the tax less attractive to green consumers. When the pollution level is endogenized via majority voting, both neutral and green consumers vote in favor of laxer standards and therefore pollution is higher compared to the case of nondifferentiated products. By contrast, the majority chosen tax induces the efficient level of pollution. Green consumerism reduces environmental protection with standards but not with taxes. |
| Keywords: | political economy,green label,standard,tax,product differentiation,green consumerism,corporate social responsibility,environmental regulation |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03429506&r= |
| By: | Anwar, Muhammad Azfar; Zhang, Qingyu; Asmi, Fahad; Hussain, Nazim; Plantinga, Auke; Zafar, Muhammad Wasif; Sinha, Avik |
| Abstract: | The environmental Kuznets curve (EKC) explains the dynamics associated with income and environmental quality. This study utilizes bibliometric analysis and data visualization techniques and empirically determines the tendencies and patterns in the EKC literature. Furthermore, the study explains intellectual structure, construct development, evolution, collaborations, and research clusters within the EKC research domain during the last two decades, from 2000 to 2020. The study empirically analyzes 2,218 articles and 55,051 references from 328 journals, 4,146 authors, 99 countries, and 50 subject categories. The study used co-citation analysis to examined the noticeable research articles, journals and authors’ contribution. Moreover, the co-occurrence analysis examined the prominent countries, institutions and keywords in the concerned literature. Most studies in EKC domain focus on developing regions facing the dual challenge of growth and environmental sustainability. The current initiative categorizes the EKC knowledge domain into major research areas with the help of different clusters namely causality analysis, non-renewable energy, energy consumption, the EKC, and industrial pollution. The study further discusses emerging trends that provide future research fronts and intellectual development within the EKC framework. |
| Keywords: | Environmental Kuznets curve; bibliometrics; carbon emissions; bibliographic coupling |
| JEL: | Q5 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:110944&r= |
| By: | Li, Shiyuan |
| Abstract: | Enterprises who are the most responsible for air pollution are also constrained by environmental protection policies the most. As the strictest environmental policy in China, Atmosphere Ten Articles carries the task to balance the relationship between the ecology and economic development. This paper analyzes the impact of this policy on enterprise performance from two perspectives: social performance and economic performance. The corporate life cycle theory is also integrated into the policy evaluation, and enterprise ownership heterogeneity is analyzed. Through decomposition, we found that the policy can promote the enterprises’ economic performance through technological innovation and resource allocation effect. This paper extends the existing environmental policy evaluation framework and provides empirical reference for future research. |
| Keywords: | Corporate Social Responsibility; Total Factor Productivity; Atmosphere Ten Articles; Corporate Life Cycle |
| JEL: | E61 L25 Q56 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:110974&r= |
| By: | Alt, Marius; Gallier, Carlo; Kesternich, Martin; Sturm, Bodo |
| Abstract: | Bei der 26. UN-Klimakonferenz in Glasgow geht es um die Umsetzung der Ziele aus dem Pariser Klimaschutzabkommen. Im Mittelpunkt steht dabei die schrittweise Zielerhöhung der einzelnen Länder, die sich anschließend in konkreten Klimaschutzbeiträgen widerspiegeln sollen. Der vorliegende ZEW Policy Brief erläutert diesen Prozess und erklärt, warum eine schrittweise Verschärfung der nationalstaatlichen Ziele allein nicht ausreichen wird, um den Klimawandel deutlich abzuschwächen. Aus ökonomischer Sicht ist die Gründung eines Klimaklubs zu empfehlen, in dem ein CO2-Preis Anreize zur Emissionsvermeidung setzt. |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewpbs:92021&r= |
| By: | Nikos Tsakiris; Panos Hatzipanayotou (Athens University of Economics and Business); Michael S. Michael |
| Abstract: | In a model of two large asymmetric countries, we examine the effectiveness of the non-cooperative setting of tradable emission permits in reducing global pollution, under different rules of international taxation of capital earnings. Our key result is that, under certain conditions, the lowest Nash equilibrium level of global pollution is achieved when the policy-mix combines internationally, rather than nationally, tradable emission permits and either capital-tax exemptions or capital-tax credits. |
| Keywords: | Emission Permits, Cross-border Pollution, Capital Tax Competition, Capital Tax Rules |
| JEL: | F18 F21 H21 |
| Date: | 2022–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:aue:wpaper:2201&r= |
| By: | Carlos Benavides; Luis Cifuentes (University of Zaragoza - Universidad de Zaragoza [Zaragoza]); Manuel Díaz; Horacio Gilabert; Luis Gonzales; Diego González; David Groves (Rand Corporation); Marcela Jaramillo; Catalina Marinkovic; Luna Menares; Francisco Meza; Edmundo Molina; Marcia Montedónico; Rodrigo Palma; Andrés Pica; Cristian Salas; James Syme; Rigoberto Torres; Sebastián Vicuña; José Valdés; Adrien Vogt-Schilb |
| Abstract: | Chile aims to reach carbon neutrality. Its Nationally Determined Contribution (NDC) commits the country to reach net-zero emissions of greenhouse gases by 2050 and sets targets for emissions to be reduced progressively over time. To comply with the goals of the NDC, line ministries have considered a set of sectoral transformations, such as closing coal-fired power plants, promoting electric mobility, and increasing forest captures which, taken together, could bring emissions down to zero. This study evaluates how these sectoral transformations would fare under a wide range of economic, environmental, and technological uncertainties. It identifies the vulnerabilities of the strategy, that is, under what conditions sectoral transformations are insufficient to achieve net-zero emissions. It then quantifies options for making sectoral plans to deliver the NDC more robust, that is to reduce the likelihood of not achieving carbon neutrality. Additional measures discussed include speeding up retirement of coal-fired power plants, promotion of telework and non-motorized transport, reduction of beef consumption, expansion of thermal retrofitting of houses, increased afforestation, sustainable forest management, and expansion of protected areas. These measures are based on ideas proposed by sectoral experts during a participatory process. Finally, a macroeconomic evaluation finds that enhancing the set of measures put forward to comply with the NDC would result in a net gain of 0.8% of gross domestic product (GDP) by 2050, on the top of 4.4% GDP gain that the current NDC plans would bring. |
| Keywords: | general equilibrium model,greenhouse gas emissions,robust decision-making,cost-benenefit analysis,climate change mitigation,decarbonization |
| Date: | 2021–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-03485958&r= |
| By: | Leif Jacobs (Fraunhofer Institute for Applied Information Technology); Lara Quack (Fraunhofer Institute for Applied Information Technology); Mario Mechtel (Leuphana University of Lüneburg, Institute of Economics) |
| Abstract: | We introduce a new microsimulation model built on household transport data to study the distributional effects of carbon-based fuel taxation of private road transport in Germany. Our data includes annual mileage at the car-level, the distinction between fuel types, as well as car-specific fuel consumption, allowing for a very detailed analysis. The model allows focusing on different types of households as well as identifying effect heterogeneity across the income distribution. We compare the recent fuel tax scheme with three policy reform scenarios to empirically test several hypotheses regarding distributional effects of carbon pricing. We find that the legal status quo of the fuel tax has overall regressive effects, with the tax on petrol acting regressive and the tax on diesel acting progressive. A transformation of the current tax into a revenue-neutral carbon-harmonised fuel tax yields a progressive distributional effect, while an introduction of a new carbon tax on transport fuels is neither learly regressive nor progressive. Combining both tax schemes also has non-regressive effects. Our results suggest that policy makers face various options for pricing road transport greenhouse gas emissions without causing an overall disproportionate tax burden on low-income households. |
| Keywords: | carbon pricing, fuel tax, distributional effects, road transport, microsimulation, exante impact assessment |
| JEL: | H22 H23 Q48 Q58 R48 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:405&r= |
| By: | Rim Berahab; Chami Abdelilah; Derj Atar; Hammi Ibtissem; Morazzo Mariano; Naciri Yassine; Zarkik Afaf |
| Abstract: | The consequences of climate change are becoming progressively more visible in Morocco. Changes in rainfall patterns and drought, increases in average temperatures and heatwaves, flooding, and rising sea levels are increasingly affecting several regions. Yet, Morocco has a relatively low greenhouse gas (GHG) emission rate, compared to other countries. In 20162, Morocco’s total GHG emissions reached 86127.7 gigagram of carbon dioxide equivalent (Gg CO2-eq), totaling around 0.2% of global GHG emissions. However, emission levels are anticipated to increase significantly in the coming decades as a result of the country’s continuing economic development. |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:ocp:ppaper:pb21-19&r= |
| By: | Xue, Chaokai; Shahbaz, Muhammad; Ahmed, Zahoor; Ahmad, Mahmood; Sinha, Avik |
| Abstract: | Undoubtedly, energy is indispensable to attain economic development; however, it also generates CO2 emissions, which are the dominant contributor to environmental deterioration and climate change. In this regard, clean energy can help to achieve both sustainable development and environmental sustainability since it comprises non-carbohydrate energy sources that do not or seldom generate emissions. Against this backdrop, this work considers economic policy uncertainty (EPU) and probes the impact of clean energy consumption on CO2 emissions in the third largest European economy France from 1987 to 2019 controlling urbanization and economic growth. Using the STIRPAT framework, the study employed the novel Augmented ARDL method that overcomes the limitations of the ARDL methods. The outcomes disclosed strong evidence of cointegration as F-statistics (overall and independent variables) and t-statistics of the dependent variables were significant. The long-run analysis revealed that EPU poses a threat to environmental sustainability by augmenting emissions levels. Surprisingly, clean energy consumption does not contribute to emissions reduction in the long-run. Economic growth boosts CO2 emissions, while urbanization is conducive to environmental quality supporting ecological modernization theory. The study detected causality from EPU to economic growth and emissions. Finally, based on the study outcomes, a policy framework is suggested to address the objectives of Sustainable Development Goal (SDG) 7 and 13. |
| Keywords: | Economic Policy Uncertainty; Clean Energy Consumption; Economic Growth; Environmental Sustainability |
| JEL: | Q4 Q5 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:110945&r= |
| By: | Li, Yumin; Li, Shiyuan; Li, Guodong; Liu, Minquan |
| Abstract: | Governments have been heavily involved in financing investments that provide environmental benefits. The Chinese government has provided various green incentives for the new energy vehicle (NEV) industry. This study evaluates the effectiveness of these low-carbon incentive policies. We estimate a NEV demand model and simulate different policy scenarios. We find that incentive policies have increased the NEV demand by 56.26% during the sample period. Among these incentive policies, free license policy contributed most of the sales. One should, therefore, consider both financial and non-financial incentive policies in future green development program designs. |
| Keywords: | Low-carbon incentive policies, Subsidies, New energy vehicles, Demand estimation |
| JEL: | L62 O31 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:110970&r= |
| By: | Rim Berahab; Chami Abdelilah; Derj Atar; Hammi Ibtissem; Morazzo Mariano; Naciri Yassine; Zarkik Afaf |
| Abstract: | Morocco's significant renewable energy resources offer an unprecedented opportunity to anchor the country’s economic and political choices in the energy transition, and to turn the transition into an essential lever for economic development. This is all the more relevant as the costs of renewable energies have dropped over the past 10 years2, and now offer strong potential, not only for creating green jobs but for ensuring a dynamic and resilient economic growth as well. In 2020, nearly 20% of Morocco's electricity production was provided by renewable energy resources (RES), while the installed capacity of RES was around 36%. Morocco's ambition is to reach a target of 52% of installed RES capacity by 2030, reinforcing the country's commitment to energy transition and decarbonization. However, this transition must also be sustainable from a socio-economic point of view and must ensure that ‘no one is left behind’. It is, therefore, necessary to quantify the costs and benefits of the energy transition, in order to identify the right policy approaches and mitigate the potential negative effects of the transition on growth, particularly in terms of industrial competitiveness, employment, and citizens' purchasing power. Part II of the Morocco’s Decarbonization Pathway Policy Brief series presented an update of the decarbonization scenarios. It revealed that in the Increased Ambition and Green Development scenarios, Morocco would achieve higher decarbonization targets than the current policy. Decarbonization targets will be achieved mainly thanks to extensive electrification of the final sectors and increasing RES in the generation mix. More specifically, the transportation, power generation, and residential sectors will be crucial to the decarbonization of Morocco’s energy consumption. This third Policy Brief in the series presents the results of a cost-benefit analysis, performed to identify the technological levers of the energy transition in Morocco, and to estimate the global economic benefit of modeled scenarios presented in Part II, both at national and sectoral levels. |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:ocp:ppaper:pb23-19&r= |
| By: | Panagiotis Varelas; Francesco Contino; Alessandro Parente |
| Abstract: | The recent coronavirus disease (COVID-19) pandemic outbreak affected our society greatly, offering a chance to rebuild and rethink our way of living. Energy, as a driving factor of everyday life faced an unprecedented shock. How big was this shock for both the economic and political levels? No consolidated study exists where both aspects are considered. To rethink our way of living, we should reconsider the energy policies strategies for the upcoming years. To date, such an impact has not yet been quantified using price forecasting mathematical models. We have therefore developed a methodology, to quantify the impact of COVID-19 pandemic on European energy market. This paper is addressing the following question “Is the COVID-19 pandemic a Black Swan event?”Evidently COVID- 19 had significant consequences on the European energy market. Stocks suffered historical minimum prices duringthis year, with a greater impact on coal technologies than renewable ones. Moreover, stock prices return is showing unexpected fluctuations, hence resulting in incorrectly predicted price forecasts. Despite the initial shock, the energy market is returning to pre-crisis levels, with the renewable technologies leading the comeback. Based on our findings and methods, we conclude that COVID-19 pandemic was not a Black Swan event. We foresee to extend our methodology beyond European energy market and the short-term effects of the pandemic with possible application on the impact of policy makers on energy models. |
| Keywords: | energy; stock prices; COVID-19; pandemic; Black Swan; energy market |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/334346&r= |
| By: | Sinha, Avik; Balsalobre-Lorente, Daniel; Zafar, Wasif; Saleem, Muhammad Mansoor |
| Abstract: | Energy poverty is a critical policymaking problem in the world, while the outlined solutions in academic and policy literature talks about the solutions, without addressing the possible cause of the problem. The interaction between labor and energy market might pave a way to address the issue. Within the context of energy poverty, this interaction might turn out to be a major roadblock in the way to attain the objectives of Sustainable Development Goals (SDGs). From this perspective, this study aims at analyzing the constituents of inequality in access to energy, and in that pursuit, it has employed Kaya-Theil Decomposition method. The study is carried out at the global level over the period of 1990-2019. The study outcomes demonstrate all the inequality components to be rising during the study period. Presence of a possible feedback loop in the association might create the Vicious Circle of Energy Poverty around the globe. This study contributes to the literature by addressing the demand-side dimension of the energy poverty issue, while using the Kaya-Theil Decomposition method as an estimator of demand-side factors. Based on the study outcomes, a policy framework has been recommended, and it is aimed at helping the nations to achieve the objectives of SDG 7, SDG 8, and SDG 10. |
| Keywords: | Energy poverty; Energy intensity; Labor productivity; Labor force participation; Theil index |
| JEL: | Q4 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:111061&r= |
| By: | Jorrit Gosens; Alex Turnbull; Frank Jotzo |
| Abstract: | China aims for net-zero carbon emissions by 2060, and an emissions peak before 2030. This will reduce its consumption of coal for power generation and steel making. Simultaneously, China aims for improved energy security, primarily with expanded domestic coal production and transport infrastructure. Here, we analyze effects of both these pressures on seaborne coal imports, with a purpose-built model of China's coal production, transport, and consumption system with installation-level geospatial and technical detail. This represents a 1000-fold increase in granularity versus earlier models, allowing representation of aspects that have previously been obscured. We find that reduced Chinese coal consumption affects seaborne imports much more strongly than domestic supply. Recent expansions of rail and port capacity, which reduce costs of getting domestic coal to Southern coastal provinces, will further reduce demand for seaborne thermal coal and amplify the effect of decarbonisation on coal imports. Seaborne coking coal imports are also likely to fall, because of expanded supply of cheap and high quality coking coal from neighbouring Mongolia. |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2112.06357&r= |
| By: | Chishti, Muhammad Zubair; Sinha, Avik |
| Abstract: | The current paper formulates a novel framework to scrutinize the effects of shocks in technological and financial innovation on carbon dioxide emissions (CO2e) in BRICS economies. The Westerlund cointegration test is applied to confirm the long-run association among the constructs. The estimates of second-generation techniques, viz, Augmented Mean Group (AMG) and Common Correlated Effect Mean Group (CCEMG), determine the following results. First, the positive shocks from financial innovation significantly disrupt the CO2e, while financial innovation's adverse shocks cause to stimulate pollution. Second, positive shocks in technological innovation also plays a pivotal role in mitigating carbon emissions while the negative shocks exhibit no impact. Third, the process of urbanization exhibits a negative linkage with environmental degradation. Fourth, fossil fuel consumption demonstrates a positive association with CO2e. Lastly, the negative correlation between foreign direct investment-CO2e nexus and GDP per capita squared-CO2e nexus assert the existence of EKC hypothesis, respectively. Also, fully-modified OLS is also deployed for country-level analysis. Besides, the causality test validates the findings by confirming the causal relationship among the modeled variables. Based on the study outcomes, this study has recommended an SDG-oriented policy framework. |
| Keywords: | Financial innovation, Technological innovation, CO2e, FDI, urbanization, BRICS |
| JEL: | Q5 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:110943&r= |
| By: | Anu Rangarajan; Tulika Narayan |
| Abstract: | The need for innovative, sustainable solutions to combat climate change is greater than ever. Mathematica’s researchers draw on our expertise from multiple sectors, domains, and regions to design solutions to address various climate change challenges. |
| Keywords: | Climate change, Greenhouse gas emissions, Resilience |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:73f90d1b439a4afe9b4c7ef3476d89fa&r= |
| By: | Alienor Cameron; Marc Baudry |
| Abstract: | On 14 July 2021, the European Commission formally adopted a proposal for a Carbon Border Adjustment Mechanism to mitigate the risk of carbon leakage caused by its increasingly ambitious environmental policies. There is a gap between the ways in which this issue is discussed in political spheres and the evidence provided by economic literature on it. The aim of this paper is to bridge this gap by presenting the context and policy debate surrounding carbon leakage and CBAs in the EU, reviewing the state of the economic literature on this topic, and discussing further research that is necessary to answer remaining policy concerns and unresolved research questions. |
| Keywords: | climate policy, carbon border adjustment, carbon leakage |
| JEL: | H23 L51 O33 Q58 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2022-1&r= |
| By: | Otaviano Canuto |
| Abstract: | Accelerating the transition toward low or net-zero carbon emissions is necessary to keep global warming at theoretically safe levels. That will likely bring price shocks associated with rising metal prices, energy costs, and carbon taxes – what has been called “greenflation”. Greening the economy will also require public spending and redistributive policies. |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:ocp:ppaper:pb51-21&r= |
| By: | Louis Balzer (Universit\'e Gustave Eiffel, ENTPE); Ludovic Leclercq (Universit\'e Gustave Eiffel, ENTPE) |
| Abstract: | The literature about tradable credit schemes (TCS) as a demand management system alleviating congestion flourished in the past decade. Most proposed formulations are based on static models and thus do not account for the congestion dynamics. This paper considers elastic demand and implements a TCS to foster modal shift by restricting the number of cars allowed in the network over the day. A trip-based Macroscopic Fundamental Diagram (MFD) model represents the traffic dynamics at the whole urban scale. We assume the users have different OD pairs and choose between driving their car or riding the transit following a logit model. We aim to compute the modal shares and credit price at equilibrium under TCS. The travel times are linearized with respect to the modal shares to improve the convergence. We then present a method to find the credit charge minimizing the total travel time alone or combined with the carbon emission. The proposed methodology is illustrated with a typical demand profile from 7:00 to 10:00 for Lyon Metropolis. We show that traffic dynamics and trip heterogeneity matter when deriving the modal equilibrium under a TCS. A method is described to compute the linearization of the travel times and compared against a classical descend method (MSA). The proposed linearization is a promising tool to circumvent the complexity of the implicit formulation of the trip-based MFD. Under an optimized TCS, the total travel time decreases by 17% and the carbon emission by 45% by increasing the PT share by 24 points. |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2112.07277&r= |
| By: | Shahbaz, Muhammad; Sinha, Avik; Ahmad, Shabbir; Jiao, Zhilun; Wang, Zhaohua |
| Abstract: | This study contributes to the literature of energy economics by divulging the nature of scale and technique effects on energy consumption, considering foreign direct investment (FDI) as one of considerable factors of energy demand. The Chinese provincial data over the period of 2000–2018 are used for empirical analysis. In doing so, we have applied the Westerlund and Edgerton (2008) cointegration test using cross-sectional dependence and structural breaks, and bootstrapped quantile regression to decompose scale and technique effects. The empirical results show the presence of cointegrating association among the model parameters, in the presence of cross-sectional dependence and structural breaks. The quantile regression results indicate that the scale effect exerted by FDI is negative at lower quantiles of energy consumption, and positive at upper quantiles. Moreover, scale and technique effects exerted by FDI are positive and negative, respectively, at lower quantiles of energy consumption, and negative and positive, respectively, at higher quantiles. The results of this study are expected to help in designing the energy policies in China, keeping the quantum of energy consumption at various provinces in mind, and, thereby, ensuring the sustainability in energy consumption. |
| Keywords: | Income Effect, Scale effect, Energy Consumption, Quantile Regression, China |
| JEL: | Q4 Q5 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:111231&r= |
| By: | Uri Dadush |
| Abstract: | The EU's proposed carbon border tax is well intentioned. It is motivated by climate concerns, not by protectionism. However, the tax is based on the false premise of carbon leakage, and its implementation is rife with practical difficulties. Moreover, the tax, as proposed, departs from the Paris agreement principle of differentiated responsibilities, and will be challenged by developing countries. The United States is not ready to adopt carbon taxes, either. The WTO, already in a fragile state, may be dealt another body blow by the proposed tax. Better alternatives are available. |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:ocp:ppaper:pb21-21&r= |
| By: | Ozili, Peterson K |
| Abstract: | This article discusses some policy options that central banks may find useful in dealing with climate change risk in the financial sector. The effect of climate change on the financial sector are indirect but severe when they occur. Central banks play an important role in regulating the financial sector and in managing its inherent risks, yet there are no studies that suggest policy solutions to help central banks and other financial sector regulators deal with the risk that climate change pose to the financial sector. Five policy options are proposed in the paper, which includes: imposing a climate change capital surcharge; impose a fixed-rate risk capital - based on Tier 2 capital; a reduction in lending to industries whose activities destroy the environment and climate; creating a climate bank; and, requiring financial institutions to relocate their important assets to areas less prone to climate change events. Several policy experiments are needed to identify the best policy option that works best for each country while taking into account the unique financial sector, financial system and climate change history of each country |
| Keywords: | climate change, financial risk, financial institutions, central bank, financial system, financial sector, banks, capital surcharge, climate change risk, climate bank, bank regulation |
| JEL: | G21 G28 Q01 Q54 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:111217&r= |
| By: | Pengcheng You; Yan Jiang; Enoch Yeung; Dennice F. Gayme; Enrique Mallada |
| Abstract: | This paper focuses on the operation of an electricity market that accounts for participants that bid at a sub-minute timescale. To that end, we model the market-clearing process as a dynamical system, called market dynamics, which is temporally coupled with the grid frequency dynamics and is thus required to guarantee system-wide stability while meeting the system operational constraints. We characterize participants as price-takers who rationally update their bids to maximize their utility in response to real-time schedules of prices and dispatch. For two common bidding mechanisms, based on quantity and price, we identify a notion of alignment between participants' behavior and planners' goals that leads to a saddle-based design of the market that guarantees convergence to a point meeting all operational constraints. We further explore cases where this alignment property does not hold and observe that misaligned participants' bidding can destabilize the closed-loop system. We thus design a regularized version of the market dynamics that recovers all the desirable stability and steady-state performance guarantees. Numerical tests validate our results on the IEEE 39-bus system. |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2112.05811&r= |
| By: | Cecilia Bellora; Lionel Fontagné (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | On March 10, 2021, the European Parliament adopted a resolution on the border carbon adjustment mechanism that the European Commission committed to setting up. How would this adjustment work and what would be its consequences? By reducing the incentive to displace production of high-emitting products to countries with little or no carbon tax, the carbon adjustment mechanism would reduce "carbon leakage" but increase the price of carbon in the European Union (EU). Therefore, European industries that use as inputs goods subject either to the carbon tax or to the carbon adjustment are at risk of a loss of competitiveness. However, the main challenge in addressing climate change is the participation of the major emitting countries in the effort to abate greenhouse-gas emissions. While the European mechanism could help the EU in strengthening its emissionreduction targets, it is above all the compliance of the United States with the commitments made in the Paris Agreement that will make it possible to save one year's worth of global emissions by 2035, pending a more concrete commitment from China. |
| Abstract: | Le Parlement européen vient d'adopter une résolution concernant le mécanisme d'ajustement carbone à la frontière que la Commission européenne s'est engagée à mettre en place. Quel pourrait être son fonctionnement et quelles en seraient les conséquences ? En réduisant l'incitation à déplacer la production des produits fortement émissifs vers des pays ne taxant pas, ou peu, le carbone, le mécanisme d'ajustement carbone devrait diminuer les « fuites de carbone », mais augmenter le prix du carbone dans l'Union européenne (UE). Une perte de compétitivité pour les industries européennes utilisant comme intrants les biens soumis à la taxe carbone ou au mécanisme d'ajustement n'est donc pas à exclure. Mais l'enjeu principal pour la préservation du climat est la participation des grands pays émetteurs à l'effort de réduction des émissions de gaz à effet de serre. Si le mécanisme européen est de nature à permettre à l'UE de renforcer ses objectifs de réduction d'émissions, c'est surtout le respect des engagements pris dans l'accord de Paris par les États-Unis qui permettra d'économiser une année d'émissions mondiales d'ici à 2035, dans l'attente d'un engagement plus concret de la Chine |
| Keywords: | International Trade,Climate Change,Commerce international,changement climatique |
| Date: | 2021–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-03436004&r= |
| By: | Filippo Belloc; Bouwe Dijkstra; Edilio Valentini |
| Abstract: | We develop a new measure of installation-level environmental compliance costs under an Emissions Trading System (ETS) by estimating normalized demand curves of permits sector-by-sector. Our measure reflects installation-level compliance costs deviations within-sector and it is scaled by both the installation’s baseline output and the sector-specific abatement efficiency. An application to four sectors in Phase 3 of the EU ETS unveils a non-negligible within-sector variance and reveals that the installation-level dimension explains the largest part of it, while the country effect accounts for 7.7% to 11.4% of the total within-sector variance. This points to the installation-level dimension as mostly important when the impact of environmental regulations has to be assessed in practice. |
| Keywords: | compliance costs, environmental regulation, abatement technology, EU ETS |
| JEL: | L50 L60 Q52 Q58 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:861&r= |
| By: | Patrick Schembri (CEARC - Cultures, Environnements, Arctique, Représentations, Climat - CNRS - Centre National de la Recherche Scientifique - UVSQ - Université de Versailles Saint-Quentin-en-Yvelines, MSH Paris-Saclay - Maison des Sciences de l'Homme - Paris Saclay - ENS Paris Saclay - Ecole Normale Supérieure Paris-Saclay - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique - UVSQ - Université de Versailles Saint-Quentin-en-Yvelines); Hynd Remita (ICP - Institut de Chimie Physique - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique, MSH Paris-Saclay - Maison des Sciences de l'Homme - Paris Saclay - ENS Paris Saclay - Ecole Normale Supérieure Paris-Saclay - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique - UVSQ - Université de Versailles Saint-Quentin-en-Yvelines) |
| Abstract: | Les changements importants imposés par l'urgence climatique, la numérisation accélérée des activités économiques et la crise sanitaire interrogent la manière dont on comprend le monde et ses évolutions. À ce titre, l'énergie demeure au centre des débats sur l'avenir des sociétés. Les défis actuels de la transition énergétique – qui consiste à abandonner les combustibles fossiles (pétrole, gaz naturel et charbon) au profit d'un nouveau modèle énergétique – reposent à la fois sur la maîtrise de la consommation d'énergie et sur le déploiement à grande échelle de sources renouvelables (comme le soleil, le vent, l'eau en mouvement, les réactions chimiques des matières organiques vivantes…). L'ouvrage propose une approche originale qui croise les regards de chimistes, économistes et juristes sur la transition énergétique actuelle. Il réunit des contributions présentées dans le cadre du workshop MOMENTOM (MOlecules and Materials for the ENergy of TOMorrow) organisé le 21 novembre 2019 à la Maison des Sciences de l'Homme Paris-Saclay. En particulier, la transition énergétique est analysée sous l'angle du droit, par référence à la protection des libertés individuelles et à la garantie de l'accès à une énergie bon marché. Cette transition énergétique est également traitée à travers certaines innovations technologiques telles que l'hydrogène et les batteries à des fins de stockage de l'énergie. On trouvera notamment une analyse économique de l'évolution de la demande mondiale d'hydrogène à l'horizon 2050, ainsi que de l'usage de ce matériau dans le secteur des bus urbains. Au niveau international, les scientifiques et notamment les chimistes consacrent beaucoup d'efforts à imiter le monde du vivant pour produire une énergie propre. Les énormes défis consistent à développer des matériaux avancés, abondants, peu coûteux et éco-compatibles. À titre d'illustration, l'ouvrage traite des dernières avancées scientifiques réalisées visant à produire du carburant solaire par de la photosynthèse artificielle. Il analyse enfin les enjeux de la transition énergétique en termes de comportements de consommation. À ce titre, l'installation de dispositifs de comptage intelligent de la consommation électrique (type Linky) par les gestionnaires des réseaux de distribution électrique au domicile des usagers peut conduire à des conflits, les consommateurs ne faisant pas toujours confiance aux entreprises énergétiques pour agir dans leur meilleur intérêt et se méfiant de l'utilisation abusive de leurs données de consommation. La solution à ces conflits est de plus en plus souvent confiée à la justice. Les apports scientifiques pluridisciplinaires éclairent plusieurs questions, dont notamment celles-ci : comment pareille transition rencontre-t-elle le droit par référence à la protection des libertés individuelles et à la garantie de la sécurité de chacun ? Sous quelles conditions les innovations technologiques, telles que la solution hydrogène pour la mobilité et la batterie pour le stockage de l'énergie électrique, peuvent-elles être déployées à grande échelle ? Quels sont les obstacles à l'appropriation par les usagers des technologies contribuant à la maîtrise de leur consommation d'énergie ? |
| Keywords: | Transition énergétique,Hydrogène,Batteries,Innovations et stockage,Droit de l'énergie,Comportements de consommation |
| Date: | 2021–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03394500&r= |
| By: | Johannes Jarke-Neuert; Grischa Perino; Henrike Schwickert |
| Abstract: | We test the hypothesis that protest participation decisions in an adult population of potential climate protesters are interdependent. Subjects (n=1,510) from the four largest German cities were recruited two weeks before protest date. We measured participation (ex post) and beliefs about the other subjects' participation (ex ante) in an online survey, used a randomized informational intervention to induce exogenous variance in beliefs, and estimated the causal effect of a change in belief on the probability of participation using a control function approach. Participation decisions are found to be strategic substitutes: a one percentage-point increase of belief causes a .67 percentage-point decrease in the probability of participation in the average subject. |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2112.09478&r= |
| By: | Adekunle, Wasiu; Omo-Ikirodah, Beatrice; Collins, Olutosin; Adeniyi, Andrew; Bagudo, Abubakar; Mosobalaje, Risikat; Oladepo, Safiyyah |
| Abstract: | This paper extends the previous studies to re-examine the functional relations and causal links between environmental degradation and its possible determinants in Nigeria, covering 1977 to 2015. With the aid of ARDL model estimation, the study found a positive relationship between economic growth (measured by real GDP per capita and environmental degradation. A positive relation was also established between energy consumption and carbon emission. Similarly, this study reported a positive relationship between transport services in the import and export sectors and carbon emission. Through the Granger causality test, the study established a unidirectional causality running from carbon emission to economic growth. Similarly, there was a unidirectional causality from real GDP per capita to transport services in the export sector. Based on these findings, there is an increasing need for the authorities to regulate economic activities that directly and indirectly contribute to systematic environmental degradation in Nigeria. |
| Keywords: | Environmental degradation, Transport services, Economic growth, ARDL, Granger causality |
| JEL: | C22 O13 O44 |
| Date: | 2021–10–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:111069&r= |
| By: | Béatrice Parguel (DRM - MLAB - Dauphine Recherches en Management - MLAB - DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique, CNRS - Centre National de la Recherche Scientifique); Johnson Guillaume (DRM MOST - DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique, CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This article critically reviews how marketing research has investigated green advertising and greenwashing over the past three decades. First, we present how the mainstream literature initially considered green advertising primarily as a branding project, until the greenwashing debate emerged in the 1990s and became the key focus of marketing research on climate change in the late 2000s. Adopting a more critical stance, we then argue that the unanimous and uncritical condemnation of greenwashing in the marketing academic literature actually helps to perpetuate the legitimacy of green advertising, and so prevents challenge to the foundations of the neoliberal agenda. We call this phenomenon the "great green illusion." |
| Abstract: | Cet article interroge de manière critique comment la recherche en marketing a étudié la publicité verte et le greenwashing au cours des trois dernières décennies. Si la littérature mainstream a d'abord considéré la publicité verte comme participant des opérations de branding des marques et des organisations, le débat sur le greenwashing, apparu dans les années 1990, est devenu central à la fin des années 2000 dans les travaux conduits en marketing sur le changement climatique. Adoptant une posture plus critique, nous soutenons que la condamnation aussi rapide qu'unanime du greenwashing sert, en réalité, à préserver la légitimité de la publicité verte et à éviter de questionner les fondements de l'agenda néolibéral. Elle participe ainsi de ce que nous qualifions de « grande illusion verte. » |
| Keywords: | green advertising,greenwashing,CSR,regulation,self-regulation,neoliberalism |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-03425494&r= |
| By: | Nauli A. Desdiani (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)); Fachry Abdul Razak Afifi (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)); Amalia Cesarina (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)); Syahda Sabrina (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)); Meila Husna (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)); Rosalia Marcha Violeta (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)); Adho Adinegoro (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)); Alin Halimatussadiah (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)) |
| Abstract: | The establishment of national climate policy targets has forced the local government to set ambitious climate goals supporting the national government to achieve its proposed target. Besides low awareness of climate change and environmental risk impacts, the biggest challenge faced by the local governments to exert climate actions lies in the financing of the programs. This paper aims to analyze the current local government budget on climate and environmental activities and identify available potential financing sources to finance local government climate and environmental initiatives. We found that the local budget allocation for environmental spending increased from 1% in 2016 to 3% in 2020, yet it is still relatively low and insufficient for achieving the climate target. With a limited budget, local governments must find additional potential financing sources for financing their climate actions. Through case study analysis, insights from several regions that have gained harness of potential from various climate and environmental financing initiatives to overcome environmental issues in their areas and reach climate and environmental goals were attained. To address local budget shortages problem for climate and environmental activities, several strategies for the local government are proposed: (1) optimizing and improving the quality of spending from intergovernmental fiscal transfer; (2) adopting Climate Budget Tagging (CBT); (3) increasing local-own source revenue from natural resource and environmental based activities; (4) valuing regencies and/or cities with high ecological value with more fiscal support through TAPE and TAKE schemes; (5) optimizing the role of SOEs and private sectors through CSR and PPP; (6) optimizing multilateral financing; and (7) utilizing other financings from the central government such as through environmental fund management agency (BPDLH), disaster pooling fund, ICCTF, and SDGs Indonesia One. |
| Keywords: | climate change — environmental risk — climate and environmental financing — local budget |
| JEL: | H72 Q54 R11 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:lpe:wpaper:202167&r= |
| By: | Rim Berahab; Chami Abdelilah; Derj Atar; Hammi Ibtissem; Morazzo Mariano; Naciri Yassine; Zarkik Afaf |
| Abstract: | During the 2015 Paris Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC), governments pledged to limit the global temperature increase to well below 2°C above pre- industrial levels, to peak emissions as soon as possible, and to achieve carbon neutrality in the second half of the century. Yet, even assuming full implementation of the commitments made by governments in Paris, the global concentration of greenhouse-gas (GHG) emissions will lead to a 2.7°C increase in the global average temperature, which will not meet the 2°C target. Therefore, more urgent action is needed to further strengthen the ambitions of the parties as expressed in theit Nationally Determined Contributions (NDCs), and to accelerate the transition to a low-carbon economy. |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:ocp:ppaper:pb21-18&r= |
| By: | Julien Xavier Daubanes (University of Geneva); Shema Frédéric Mitali (Ecole Polytechnique Fédérale de Lausanne); Jean-Charles Rochet (Swiss Finance Institute; University of Geneva - Geneva Finance Research Institute (GFRI); University of Zurich - Swiss Banking Institute (ISB)) |
| Abstract: | Green bonds allow firms to commit to climate-friendly projects. Equity investors react positively to their announcement. Based on prior empirical studies, we suggest that green bond commitments help managers signal the profitability of their green projects and that they do so because they are sensitive to their rm's stock price. We present a signaling model in which firms undertake green projects not only because of carbon penalties but, additionally, because of managerial incentives, predicting that the role of the former is augmented by the latter. We test this prediction by exploiting both cross-industry differences in the stock-price sensitivity of managers' pay and in stock share turnover, and cross-country variations in effective carbon prices. Our results not only support the role that our theory ascribes to managerial incentives, but also show that this role mainly depends on carbon pricing. Green bonds are not substitutes to carbon pricing. On the contrary, the latter is essential to the effectiveness of the former. |
| Keywords: | Green bonds; Green finance; Climate policy; Carbon pricing; Managerial incentives; Short-termism |
| JEL: | D53 H23 G14 Q54 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp2197&r= |
| By: | Graham Beattie; Iza Ding; Andrea La Nauze |
| Abstract: | We provide evidence of an energy efficiency gap in China. Using an incentivized field experiment, we document that providing information to consumers on the energy costs of lightbulbs significantly affects their willingness to pay for energy efficient bulbs. Unlike previous literature, we do not find evidence that this gap is driven by biased beliefs. Further our experimental design allows us to rule out that changes in willingness to pay are driven purely by the salience of the monetary or environmental costs of lightbulbs. We argue that the results are consistent with consumers being risk averse and uncertain about the benefits of more energy efficient appliances. |
| Keywords: | energy-efficiency, lightbulbs, information experiment |
| JEL: | Q40 H23 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9435&r= |