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on Energy Economics |
| By: | Hirth, Lion; Khanna, Tarun; Ruhnau, Oliver |
| Abstract: | Electricity is a peculiar economic good, the most important reason being that it needs to be supplied at the very moment of consumption. As a result, wholesale electricity prices fluctuate widely at hourly or sub-hourly time scales, regularly reaching multiples of their average, and even turn negative. This paper examines whether the demand for electricity responds to such price variations in the very short term. To solve the classical identification problem when estimating a demand curve, we use weather-driven wind energy generation as an instrument. Our robustness checks confirm that wind energy is indeed a strong and valid instrument. Using data from Germany, we estimate that a 1 €/MWh increase in the wholesale electricity price causes the aggregate electricity demand to decline by 67–80 MW or 0.12–0.14%, contradicting the conventional wisdom that electricity demand is highly price-inelastic. These estimates are statistically significant and robust across model specifications, estimators, and sensitivity analyses. At average price and demand, our estimates correspond to a price elasticity of demand of about –0.05. Comparing situations with high and low wind energy (5–95th percentile), we estimate that prices vary by 26 €/MWh, and the corresponding demand response to wholesale electricity prices is about 2 GW, or 2.6% of peak load. Our analysis suggests that the demand response in Germany can be attributed primarily to industrial consumers. |
| Keywords: | Electricity markets,price elasticity,demand response,instrumental variables |
| JEL: | Q41 D47 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:249570&r= |
| By: | Tselika, Kyriaki (Dept. of Business and Management Science, Norwegian School of Economics) |
| Abstract: | This paper investigates the impact of intermittent renewable generation on the distribution of electricity prices and their variability in Denmark and Germany. We exploit hourly data from 2015 to 2020 and employ a novel panel quantile approach - the Quantiles via moments (MMQR) method. The combination of hourly-specific effects and the quantile approach allow us to estimate the renewable sources effect on various price quantiles while controlling for market dynamics. The results suggest that the merit-order effect occurs in both countries, with wind and solar generation having diverse effects on the electricity price distribution. Thus, policy makers should consider this diversifying effect to develop efficient renewable support schemes. We also explore non-linearities by including different demand levels in our model and investigate price variability. The outcomes indicate that wind generation increases (decreases) the occurrence of price fluctuations for low demand (high demand) in both countries. Meanwhile, in Germany, solar power stabilizes price fluctuations for high demand levels, stronger than wind. Market risk information could be useful for organizations in recognizing beneficial investment opportunities or hedging strategies. We finally aggregate the hourly observations into daily and compare the estimation outcomes. Hourly-related features seem to affect the merit-order effect and its robustness, and a panel approach shall be considered when investigating electricity markets. |
| Keywords: | Electricity prices; panel quantile regression; renewable sources; merit-order effect; price variability |
| JEL: | Q20 Q40 |
| Date: | 2022–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhhfms:2022_004&r= |
| By: | Abir Khribich (Université Côte d’Azur, CNRS, GREDEG, France; Faculty of Economic Sciences and Management of Nabeul, University of Carthage, Tunisia; LEGI, Tunisia Polytechnic School.); Rami H. Kacem (Faculty of Economic Sciences and Management of Nabeul, University of Carthage, Tunisia; LEGI, Tunisia Polytechnic School.); Damien Bazin (Université Côte d'Azur; GREDEG CNRS) |
| Abstract: | The aim of this research is to examine the short and long term impact of social development on the consumption of renewable energy in Tunisia. Our conceptual framework centres on the capacity of individuals to contribute to sustainability, and thereby help prevent risks and increase resilience. We in fact consider the possibility that social development represents an endpoint for sustainable development. Our proposed methodology derives from a Social Development Index (SDI) which is determined by aggregating various indicators associated with social wellbeing. We then use the Autoregressive Distributed Lag (ARDL) approach to investigate the existence of any causal relationship between social development and renewable energy consumption in the case of Tunisia. Empirical analysis shows that no such relationship exists over the long term (in both directions), but that a short term effect is detected at the 10% level of significance. This implies that additional specific strategies will be required to improve the degree of awareness among Tunisian people about the nationwide transition to renewable energy. Indeed, the empirical finding suggests that decision-makers and political leaders in developing countries such as Tunisia should develop consistent policies to ensure that any issues of uncertainty inherent to the development process are avoided, especially in the light of the current health emergency (Covid-19). |
| Keywords: | ARDL, Capabilities, Causality, Renewable energy, Social development, Tunisia |
| JEL: | C20 Q20 Q28 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2022-05&r= |
| By: | Grafström, Jonas (The Ratio Institute) |
| Abstract: | The purpose of this paper is to provide an analysis of the existence and possible direction of international knowledge spillovers in the solar energy sector. Specifically, the paper investigates how the accumulation of solar energy patents and public R&D spending affected the output of domestic granted solar energy patents. The econometric analysis relies on a data set consisting of most of the OECD countries plus China and analyzes two time periods; from 1990 to 2014 and the years 2000 to 2014. To analyze the data material, a Poisson fixed-effects estimator based on the Hausman, Hall and Griliches (1984) method was used. The empirical findings suggest that the domestic accumulation of patents and R&D is important for the potential development of new ones. Indeed, early investment in specific technology can be an indicator of future leadership in that field. |
| Keywords: | Solar PV; R&D; Spillovers; Patents |
| JEL: | E61 O32 Q20 Q58 |
| Date: | 2021–12–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0351&r= |
| By: | Herve Kaffo Fotio (University of Maroua, Cameroon); Tii N. Nchofoung (University of Dschang, Cameroon); Simplice A. Asongu (Yaoundé, Cameroon) |
| Abstract: | Despite growing attention on the role of renewable energy in promoting economic growth and environmental sustainability, its adoption rate remains uncomfortably low, especially in developing countries. This study attempts to explore the ways to extend the installed capacity of renewable energy in 16 sub-Saharan African (SSA) countries over the period 1980-2017. The results from panel cointegration econometric techniques suggest that policies to enhance financial integration should increase the installed capacity of renewable energy in SSA, though the beneficial effect is only statistically significant in the long run. This effect holds, although disproportionately when the financial integration index is disaggregated into its de facto and de jure aspects. Moreover, the quantile regression analysis reveals that the effect of financial integration on renewable energy capacity is positive but heterogeneous across the conditional distribution of renewable energy capacity. However, the positive effect of financial integration is not enough to ensure the diversification of the energy mix, measured as the share of renewable installed capacity in the total installed capacity. The results show that economic growth is positively linked to renewable energy generation capacity while financial development is negatively associated with renewable energy production. Overall, these findings suggest that policies to increase the openness to foreign capitals are welcomed as far as renewable energy generation is concerned. |
| Keywords: | Financial integration, Renewable energy, Sub-Saharan Africa, Cointegration |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:22/016&r= |
| By: | Ben Youssef, Slim |
| Abstract: | This paper evaluates the symmetric and asymmetric relationships between military spending (MS) and oil imports (OIM) in China. For this purpose, we use the autoregressive distributed lag (ARDL) and the non-linear ARDL approaches, with annual data ranging from 1989 to 2016. In the long-run, MS increases OIM, renewable energy (RE) consumption, and gross domestic product (GDP). RE consumption increases arms exports (AE) and GDP but reduces OIM. Interestingly, OIM reduces AE and AE harm GDP. OIM seem to have a non-linear and asymmetric impact on MS both in the short- and long-run. In the long-run, an increase in OIM by 1% increases MS by 0.853%, while a reduction of OIM by 1% reduces MS by 1.467%. The cumulative dynamic multiplier effects indicate that China reacts very rapidly to positive shocks, but is very cautious about reducing its MS in the event of a negative shock. It appears that China is prompt to reduce considerably its MS whenever it is assured about its energy security. This could be partially achieved by increasing its RE consumption, and the military sector is invited to contribute especially through its R&D activities. This could lead to a cleaner environment and a more peaceful world. |
| Keywords: | Renewable energy; oil imports; arms exports; military spending; non-linear and linear autoregressive distributed lag; China. |
| JEL: | C32 H56 O53 Q42 |
| Date: | 2021–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:111413&r= |
| By: | Ferguson, Beth |
| Abstract: | This report presents creative engagement activities based on the Designing with the Sun: Solar Curriculum Project that teaches high school and undergraduate students the principles of solar design and the steps needed to design and build a solar charging station. This in-depth curriculum covers renewable energy, electricity basics, solar design principles, and solar-supported mobility. Each chapter has a PowerPoint presentation, an active learning activity, video clips, and links to learn more. The solar curriculum materials are free for educators and self-learners to download and explore at their own pace. Small-scale solar charging stations provide a living lab for research and a place to recharge e-bikes and e-scooters. Shared micromobility (e-bike and e-scooter fleets) has exploded in popularity on college campuses and can help reduce car ownership and carbon emissions when recharged with the sun. As universities plan for the challenges of the 21stcentury, incorporating multifaceted forms of renewable energy with electric vehicle charging is a step toward climate action and decarbonization. Creative rethinking on a massive scale is required to meet the goals set by the Intergovernmental Panel on Climate Change and the COP 21 Paris Agreement to limit global warming to 1.5°C. The UN’s Sustainable Development Goals such as numbers 7, Affordable and Clean Energy;9, Industry, Innovation and Infrastructure; and 11, Sustainable Cities and Communities are all important guides for modeling solar education. View the NCST Project Webpage |
| Keywords: | Education, Engineering, Solar energy, photovoltaic, solar design, renewable energy |
| Date: | 2022–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsdav:qt4f74n7h0&r= |
| By: | Cullen S. Hendrix (Peterson Institute for International Economics) |
| Abstract: | The world's transition to sustainable energy systems has suddenly become a boon to countries rich in critical minerals used in clean energy technologies like rechargeable batteries, solar panels, wind turbines, and electric vehicles. Among these critical minerals are aluminum, coltan, copper, aluminum, zinc, tin, rare earths, lithium, tantalum, and cobalt. Given that these minerals are key to building sustainable energy systems, vital for ensuring military might, and often extremely valuable, will countries with large, exportable endowments of these minerals fall prey to the resource curse? Hendrix says these countries may find their newfound wealth to be a mixed blessing. The size of the markets for these resources and their marginal production costs suggest that they do not have the potential to generate massive rents the way that oil and gas production have. Given that these rents are the source of many ills--authoritarianism, reduced investment in human capital, poor human rights records--this is good news. But because several of these minerals can be mined artisanally, they may lead to governance challenges related to armed conflict. Their status as strategic resources will invite major power meddling and interventions--but only if mineral-rich economies are forced to align themselves and access to their resources with a major power, like the United States or China. The 20th century's scramble to secure oil resources led to cursed dynamics in oil-rich societies, but historical precedent is not destiny. Mineral-rich countries may avoid the resource curse, especially if they develop diverse investment and trading relationships to balance major power interests in their mineral wealth and embrace industry- and civil society-led good governance initiatives around mineral resources. |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:iie:pbrief:pb22-1&r= |
| By: | Gohdes, N.; Simshauser, P. |
| Abstract: | The cost of capital is among the most important variables determining the feasibility of investment in renewable energy projects. In Australia’s National Electricity Market, the ability of new variable renewable energy (VRE) plant to arrange requisite project finance at favourable rates largely determines project viability. Such financings are typically only achieved when VRE projects are underpinned by long-dated Power Purchase Agreements (PPA), under which prices are guaranteed by an investment-grade counterparty. In this article, we quantify the relationship between PPAs, counterparty credit quality and the cost of capital in the context of Australia’s energy-only wholesale market under conditions of policy uncertainty. Our analysis benefits from the application of confidential data from Australia’s capital markets. We find higher credit quality drives higher gearing, and somewhat counterintuitively, lower expected returns to equity. This in turn produces a lower cost of capital and by implication, higher post-construction VRE plant valuations – an outcome seemingly at odds with Modigliani and Miller’s classic 1958 article. In practice, risk has been repackaged and reallocated. |
| Keywords: | Renewable Energy, PPAs, Project Finance, Counterparty Credit, Cost of Capital |
| JEL: | D25 D80 G32 L51 Q41 |
| Date: | 2022–01–24 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2206&r= |
| By: | Tselika, Kyriaki (Dept. of Business and Management Science, Norwegian School of Economics) |
| Abstract: | Employing a quantile regression model, we investigate the impact of renewable sources on their unit revenues (absolute cannibalization) and value factors (relative cannibalization), as well as the cross-effect between technologies. The results indicate that an increase in wind and solar share reduce the technology’s own and each other’s unit revenues. In the case of value factors, an increase in wind share reduces the wind and solar market value. In contrast, there is no evidence of solar decreasing the wind market value. The findings imply that higher share of renewables may raise market risk and may limit future renewable investments, but these results are not uniform across the unit revenues and value factors distribution. |
| Keywords: | Value factor; unit revenues; renewable energy; quantile regression |
| JEL: | Q20 Q40 |
| Date: | 2022–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhhfms:2022_005&r= |
| By: | Braun, Robin (Bank of England) |
| Abstract: | When quantifying the importance of supply and demand for oil price fluctuations, a wide range of estimates have been reported. Models identified via a sharp upper bound on the short-run price elasticity of supply, find supply shocks to be minor drivers. In turn, when replacing the upper bound with a fairly uninformative prior, supply shocks turn out to be quite important. In this paper, I revisit the evidence with a model identified by a combination of weakly informative priors and non-Gaussianity. For this purpose, a structural vector autoregressive (SVAR) model is developed where the distributions of the structural shocks are modelled non-parametrically. The empirical findings indicate that once non-Gaussianity is incorporated into the model, posterior mass of the short-run oil supply elasticity shifts towards zero and oil supply shocks become minor drivers of oil prices. In terms of contributions to the forecast error variance of oil prices, the model arrives at median estimates of just 6% over a 16-month horizon. |
| Keywords: | Oil market; SVAR; identification by non-Gaussianity; non-parametric Bayesian methods |
| JEL: | C32 Q43 |
| Date: | 2021–12–17 |
| URL: | http://d.repec.org/n?u=RePEc:boe:boeewp:0957&r= |
| By: | Alexeev, Michael; Zakharov, Nikita |
| Abstract: | We investigate the relationship between oil windfalls and income inequality using the subnational data of one of the resource-richest and most unequal countries in the world – Russia. While previous literature produced contradictory findings due to the use of an aggregate measure of oil rents mainly in cross-national settings, we focus exclusively on oil rents that accrue to the subnational governments across one country. Our estimation strategy takes advantage of the two specific features of Russian oil taxation: 1) the policy change when sharing oil extraction taxes with local budgets was discontinued; and 2) the oil tax formula being tied directly to the international oil prices making oil price shocks an exogenous measure of change in oil rents. When we look at the period with oil tax revenues shared with the regional governments, we find that oil windfalls had increased income inequality and benefited the wealthiest quintile of the population in regions with more intense rent-seeking. Further, positive price shocks combined with greater rent-seeking reduced the share of labor income but increased the income share from unidentified sources traditionally associated with corruption. These effects of oil windfalls disappeared after the Russian government discontinued oil tax revenue sharing with regional governments. Finally, we examine some political implications of rising inequality due to the appropriation of oil windfalls. We find a positive effect of rising inequality on the frequency of protests associated with grievances among the poor and disadvantaged social groups; this effect, however, exists only in relatively democratic regions. |
| JEL: | D63 D73 Q35 Q38 P48 |
| Date: | 2022–01–25 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofitp:2022_002&r= |
| By: | Razzak, Weshah |
| Abstract: | Effectively, the government of Iraq, not the Iraqi people, owns the oil wealth; the oil industry is a government monopoly. We make the case against such monopoly and for a competitive oil industry. We estimate the share of oil in real output to be relatively large, and show that most macroeconomic variables are highly associated with the price of oil. This oil dependence is consistent with the rentier economy. In addition, the elasticity of oil production with respect to global oil consumption is greater than one. Such monopolistic industry would not be suitable for the future in a zero carbon state of the world. We estimate the dynamics of real oil prices and quantity; human capital, the stock of capital, labor, and real GDP, and conduct stress tests by producing dynamic stochastic projections for the period from 2020 to 2050 under the baseline and two adverse counterfactual scenarios. Permanent income is higher under a competitive scenario than a monopolistic one. A quick transfer of ownership of oil to the Iraqi people should guarantee a competitive market economy, a functional democracy, and a better future for the Iraqis. |
| Keywords: | Iraq, oil share, private ownership, FM-OLS, VAR, Stress testing |
| JEL: | C1 C53 D24 E17 Q30 Q34 |
| Date: | 2022–01–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:111417&r= |
| By: | Etienne Romsom |
| Abstract: | This paper, the first of two on global oil theft and fraud, discusses the prevalence, methods, and consequences of global oil theft, valued at US$133 billion per year and equivalent to 5-7 per cent of the global market for crude oil and petroleum fuels. However, the impact of oil theft is significantly larger than the value of theft itself. Government tax yields have been assessed for 30 developing countries associated with oil theft and found to be significantly lower than in the International Monetary Fund's benchmark study. |
| Keywords: | Oil, Fuel, Corruption, Crime, Domestic revenue mobilization, Tax evasion, Tax avoidance |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp-2022-16&r= |
| By: | Del Campo, Stellio; Anthoff, David; Kornek, Ulrike |
| Abstract: | A sizeable body of literature on climate economics utilizes the notion of inequality aversion. We review and synthesize published estimates of inequality aversion to guide this literature. We review both axiomatic and empirical studies, accordingly our findings draw on different lines of evidence. In the former case, a variety of ethical principles underlie the recommendations for positive inequality aversion. The latter studies use various methods to present estimates based on some form of "revealed ethics," for example by looking at existing progressive income tax-schedules or the level of foreign aid. Here we find strong support for the view that inequality aversion is positive (but potentially small) and very little support for any value larger than three. The vast majority of studies that look at domestic policies support values between one and two, whereas studies that look at foreign aid find lower values ranging from above zero to unity. |
| Keywords: | inequality aversion,marginal valuation of income,Atkinson index,climate change |
| JEL: | D63 I31 Q54 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:249036&r= |
| By: | Alessi, Lucia (European Commission); Battiston, Stefano (University Ca' Foscari of Venice); Kvedaras, Virmantas (European Commission) |
| Abstract: | How financial investors may react to policy events related to sustainability and climate change mitigation in particular, is a key question with implications for sustainable finance and financial stability. We address this question by carrying out a multi-period difference-in-difference approach on a confidential database of securities holdings of the European Central Bank, and we provide evidence of several effects related to the Paris Agreement. In aggregate, investors reduced their exposure to carbon-intensive assets in response to the agreement, and the trend reverted after the US withdrawal announcement. However, the reaction varies across categories and geographies of the securities holders, their ownership size, and the emissions of owned firms. In particular, transition risk has been taken up by less regulated financial institutions and the BRIC countries. Our results highlight that the redirection of global financial flows towards climate action requires clear and unanimous signals from the global community of policy makers. |
| Keywords: | high-carbon firms, finance, Paris Agreement, stock holdings, US withdrawal |
| JEL: | G11 G2 Q51 Q58 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:jrs:wpaper:202112&r= |
| By: | Alessi, Lucia (European Commission); Elisa, Ossola (European Commission); Panzica, Roberto (European Commission) |
| Abstract: | This paper studies the evolution of the greenium, i.e. a risk premium linked to firms' greenness and environmental transparency, based on individual stock returns. We estimate an asset pricing model with time-varying risk premia, where the greenium is associated to a priced `greenness and transparency' factor, which considers both companies' greenhouse gas emissions and the quality of their environmental disclosures. We show that investors in the European equity market tend to accept lower returns, ceteris paribus, to hold greener and more transparent assets when the shift of the economy towards low-carbon becomes more credible. This happened after the Paris Agreement, the first Global Climate Strike and the announcement of the EU Green Deal. Signals going in the opposite direction, such as the US withdrawal from the Paris Agreement, increasing fossil fuel prices and more bad news about climate change, are associated with increases in the greenium. |
| Keywords: | climate risk, environmental disclosure, conditional factor models, asset pricing |
| JEL: | G01 G11 G12 Q01 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:jrs:wpaper:202113&r= |
| By: | Jacques Fontanel (CESICE - Centre d'études sur la sécurité internationale et les coopérations européennes - UGA - Université Grenoble Alpes - IEPG - Sciences Po Grenoble - Institut d'études politiques de Grenoble - UGA - Université Grenoble Alpes) |
| Abstract: | Climate change poses a problem for the economic system that fostered the polluting industrial revolutions of coal and oil. Today, the digital economy revolution offers significant hope for reducing pollution and promoting decarbonisation. However, the economic interest struggles of the powerful lobbies of the polluting sectors seem to reduce the potential for transformation of an economic system driven by the search for short-term profit. The major powers want to preserve their economic gains and are undertaking this revolution at a pace that suits them, which is not without conflict, given the urgency of action in the face of the harmful transformations undergone by eco-systems. Furthermore, the GAFAMs, the powerful providers of digital services and instruments, together with their Chinese competitors, have a considerable economic and strategic force that could undermine freedoms and human and citizens' rights. Finally, for the production of digital tools, rare earths are likely to pose new problems, those relating to the pollution involved in their production and their relative scarcity compared to the stocks known today. |
| Abstract: | Le changement climatique pose un problème au système économique qui a favorisé les révolutions industrielles polluantes du charbon et du pétrole. Aujourd'hui, la révolution de l'économie numérique offre un espoir important pour réduire la pollution et promouvoir la décarbonisation. Cependant, les luttes d'intérêts économiques des puissants lobbies des secteurs polluants semblent réduire le potentiel de transformation d'un système économique guidé par la recherche du profit à court terme. Les grandes puissances veulent préserver leurs acquis économiques et entreprennent cette révolution au rythme qui leur convient, ce qui n'est pas sans conflit, vu l'urgence d'agir face aux transformations néfastes subies par les écosystèmes. Par ailleurs, les GAFAM, puissants fournisseurs de services et d'instruments numériques, disposent, avec leurs concurrents chinois, d'une force économique et stratégique considérable qui pourrait porter atteinte aux libertés et aux droits de l'homme et du citoyen. Enfin, pour la production d'outils numériques, les terres rares sont susceptibles de poser de nouveaux problèmes, ceux liés à la pollution liée à leur production et à leur relative rareté par rapport aux stocks connus aujourd'hui. |
| Keywords: | Digital economy,climate change,GAFAM,Rare Earths,changement de climat,Terres rares,Economie digitale |
| Date: | 2021–11–17 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03484094&r= |
| By: | Giovanna Marcolongo; Diego Zambiasi |
| Abstract: | We show that the incorporation of offshore entities increases when oil and gas exploration licences are awarded. We exploit leaked data on the incorporation of shell companies and detailed information on tax havens and the awarding rounds of oil licences to construct a new data set covering 119 countries over the period 1990-2014. We consider the incorporation of offshore entities as an indicator of corruption risk. We find that the number of new shell companies increases by 11.1 per cent in the period around the award of an exploration licence. |
| Keywords: | Oil, Extractives, Natural resources, Corruption, Tax havens, Shell companies |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp-2022-14&r= |
| By: | Michał Dzieliński (Stockholm Business School, Stockholm University); Florian Eugster (University of St. Gallen); Emma Sjöström (Stockholm School of Economics); Alexander F. Wagner (University of Zurich - Department of Banking and Finance; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI); Swiss Finance Institute) |
| Abstract: | Climate change is a major concern for many companies, but it has not historically featured much in earnings conference calls. We find a marked increase in climate talk on these calls in recent years. We also find that climate talk is negatively related to the change in CO2 emissions (especially Scope 2) in the year after the call, particularly in firms with high overall environmental and governance ratings. Conversely, investors react particularly negatively to climate talk when it comes from a firm with low levels of ESG performance or following poor earnings performance. Finally, a firm employs more climate talk when it is more material, when there is greater shareholder pressure or when it is better prepared for climate-related disclosure. Overall, these results suggest that investors and other stakeholders interested in corporate climate action should be paying attention to earnings conference calls as a source of useful information about companies' broader stance on climate-related issues. |
| Keywords: | climate talk, earnings calls, sustainability, CO2 emissions, greenwashing |
| JEL: | D83 G14 G34 G41 Q54 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp2214&r= |
| By: | Julien Daubanes (UNIGE - Université de Genève); Fanny Henriet (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Katheline Schubert (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | We examine an open economy's strategy to reduce its carbon emissions by replacing its consumption of coal—very carbon intensive—with gas—less so. Unlike the standard theoretical approach to carbon leakage, we show that unilateral CO2 reduction policies generate a higher leakage rate in the presence of more than one carbon energy source and may turn counterproductive, ultimately increasing world emissions. We establish testable conditions as to whether a unilateral tax on domestic CO2 emissions increases the domestic exploitation of gas and whether such a strategy increases global emissions. We also characterize this strategy's implications for climate policy in the rest of the world. Finally, we present an illustrative application of our results to the United States. |
| Keywords: | unilateral climate policy,carbon emission reduction,shale gas,gas-coal substitution,coal exports,carbon leakage,US policy,counter-productive policy |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:hal:pseptp:hal-03093955&r= |
| By: | Bellucci, Andrea (Universita Degli Studi Dell'insubria); Fatica, Serena (European Commission); Georgakaki, Aliki (European Commission); Gucciardi, Gianluca (Unicredit Bank); Letout, Simon (European Commission); Pasimeni, Francesco (International Renewable Energy Agency) |
| Abstract: | This paper explores the role of green innovation in attracting venture capital (VC) financing. We use a unique dataset that matches information on VC transactions, companies' balance sheet variables and data on patented innovation at the firm level over the period 2008-2017. Taking advance of a novel granular definition of green innovative activities that tracks patents at the firm level, we show that green innovators are more likely to receive VC funding than firms without green patents. Likewise, a larger share of green vs. non-green patents in a firm's portfolio increases the probability of receiving VC finance. Robustness checks and extensions tackling several dimensions of heterogeneity corroborate the view that green patenting is an important driver of VC funding. |
| Keywords: | Venture capital, Green ventures, Patents, Green technology |
| JEL: | G24 M13 M21 O35 Q55 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:jrs:wpaper:202111&r= |
| By: | Ary José A. Souza-Jr. |
| Abstract: | This paper analyses the impact of air pollution, climate conditions, and extreme weather events on subjective well-being across the Portuguese regions through estimating an ordered probit model. The estimation applies data at the individual level from the 8th and 9th waves of the European Social Survey, along with an air quality indicator, environmental variables, national forest inventory, and a study about the possible future effects of the sea-level rise on vulnerable areas and people living therein. Even after controlling for socio-economic variables and personal traits, the results suggest the existence of differences between regional welfare levels. Air pollution has a negative impact on life satisfaction due to its bad impacts on health (aggravating the condition of individuals with heart and lung diseases). The paper’s key finding is to show that at the regional level, both past (forest fires) and «possible» future (floods due to sea-level rise) extreme weather events may impact the current welfare level. Also, assessments of implicit willingness do to pay demonstrate that climate change effects have a relevant impact on their quality of life nowadays. |
| Keywords: | climate, extreme, region, flood, fire. |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:ise:remwps:wp02132022&r= |
| By: | François-Xavier Bellocq,; François-Xavier Duporge,; Mathilde Gauthier,; Annabelle Laferrère,; Bertrand Reysset |
| Abstract: | Africa has many advantages that will enable it to keep a low carbon footprint while achieving economic take-off. A just transition pathway that reconciles socioeconomic and climate imperatives is possible. However, it will require a strong commitment to climate issues from African and international stakeholders. Increased technical and financial mobilization of African governments, African and international donors and public development banks, and all financial players on the continent will make it possible to finance and support the continent’s fast-growing climate innovation. |
| Keywords: | Afrique |
| JEL: | Q |
| Date: | 2022–01–26 |
| URL: | http://d.repec.org/n?u=RePEc:avg:wpaper:en13236&r= |
| By: | Gilmore, J.; Nolan, T.; Simshauser, P. |
| Abstract: | Over the period 2016-2021 Australia’s National Electricity Market (NEM) experienced an investment supercycle, with 16,000MW of new utility-scale variable renewable plant commitments (and an additional 8,000MW of rooftop solar PV) in a power system with a ratcheted peak demand of 35,000MW. The sharp rise in intermittent asynchronous resources and the disorderly loss of 5,000MW of synchronous coal-fired generation plant placed strains on system security – most visibly represented by the rapid deterioration in the distribution of the power systems’ (50Hz) Frequency. This in turn necessitated material changes to the NEM’s suite of Frequency Control Ancillary Service (FCAS) markets. Utility-scale batteries are ideally suited for FCAS duties, but unlike the wholesale electricity market, there is no forward price curve for Frequency Control Ancillary Services, nor is there any systematic framework for determining equilibrium prices that might otherwise be used for investment decision-making. In this article, we develop an approach for quantifying long run equilibrium prices in the markets for Frequency Control Ancillary Services, with the intended application being to guide the suitability of utility-scale battery investments under conditions of uncertainty and missing forward FCAS markets. |
| Keywords: | Frequency control ancillary services, electricity markets, battery storage |
| JEL: | D25 D80 G32 L51 Q41 |
| Date: | 2022–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2203&r= |
| By: | Haggi, Hamed; M. Fenton, James; Brooker, Paul; Sun, Wei |
| Abstract: | In this study, we consider the perspective of the distribution system operator (DSO) that manages the DERs, especially H2 production and consumption by H2 systems, to reach the goal of net-zero emission energy production. It should be mentioned that a vertically integrated design is considered for the operation of the distribution network. To have realistic analysis of distribution network considering the power flow and voltage challenges, a standard 33-node distribution network, based on Fig. 1 including utility-operated natural gas power plants (combined cycle units and combustion turbine units), PV units, Battery energy storage (e.g. Li-ion batteries, Vanadium Redox flow batteries, etc.), and H2 systems (including electrolyzers, compressors, storage tanks, and FC units) are considered. Different types of voltage-dependent loads are considered such as critical, moderately-critical, and non-critical loads to resemble load types like hospitals, offices, grocery stores, etc. The goal of normal operation from grid operators' (utilities) perspective is to operate these assets to minimize the total operational and investment costs and maximize the green energy production for the power sector. Interested readers are encouraged to check. Simulation results for different case studies assume costs for the year 2050, and demonstrate that with considering H2 systems and Redox flow batteries, the net-zero emission energy production for electricity demand supply is achieved in high PV penetration levels while addressing the technical and physical network constraints. |
| Keywords: | H2 production, Utility Operations, Net Zero Emission Policy |
| JEL: | C15 C6 C61 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:111390&r= |
| By: | DIODATO Dario (European Commission - JRC); MONCADA PATERNO' CASTELLO Pietro (European Commission - JRC); RENTOCCHINI Francesco (European Commission - JRC); TUEBKE Alexander (European Commission - JRC) |
| Abstract: | New scientific evidence points out key issues helpful to designing policies and understanding new challenges, such as for requirements of the digital and green (twin) transition. - More effort is needed from companies in gender balance, which can also leverage the twin transition.- Strengthen the collaboration of companies with other research & innovation actors and secure an easy access to state-of-the-art technology infrastructure at the local level.- Support young and innovative companies to foster the growth potential of new ideas, particularly in strategic sectors.- Increase collaboration and support programmes among developed and developing countries in environmental and socio-economic Sustainable Development Goals.- Continue to invest in people’s education and skills, re-skilling and re-training, particularly in skills needed for hybrid (mix of remote and office-based) work. - Strengthen the Single Market, by reducing fragmentation, improving conditions for competition and better governance- Industrial innovation policy needs to be transformative, including new directions in objectives and investments, co-creation, a "whole government" approach and anticipation of future change. |
| Keywords: | Industrial Research and Innovation, Economics and and Policy, Green Deal, Twin transition, Sustainability, Competitiveness, European Union |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc128430&r= |
| By: | Donato Masciandaro; Romano Vincenzo Tarsia |
| Abstract: | This paper proposes an index for evaluating central bank activism in addressing climate-change issues. Consistent with a principal-agent approach, this metric assumes that the central bank’s sensibility on climate change depends on both economic and political drivers. The index has been created to include not only actual policies but also participation in green networks and initiatives that signal central bank activism on climate change. |
| Keywords: | Climate change, central banking, principal-agent, political pressure, monetary policy, financial stability |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:baf:cbafwp:cbafwp21167&r= |
| By: | Caroline Fyfe (Motu Economic and Public Policy Research); Arthur Grimes (Motu Economic and Public Policy Research); Shannon Minehan (Motu Economic and Public Policy Research); Phoebe Taptiklis (Motu Economic and Public Policy Research) |
| Abstract: | Over a fifth of New Zealanders find their homes to be too cold and damp. EECA’s Warmer Kiwi Homes (WKH) programme aims to make New Zealand homes warmer, drier, and healthier, while improving their energy efficiency. The programme includes provision of clean heating devices (primarily heat pumps) to household living areas that do not have such heating. We examine impacts that WKH heat pump provision has on household outcomes including comfort and wellbeing, indoor environmental outcomes and electricity use. The evaluation covers 127 households in Auckland/Waikato, Wellington and Christchurch who applied for a heat pump through WKH in 2021. Evaluation methods include two qualitative household surveys, a house survey, indoor environmental quality readings from a monitor in the living area, and electricity use measured using smart meter data. Timing of heat pump installation was effectively randomised by the onset of COVID-19, so enhancing the study’s statistical precision. The qualitative and quantitative data show that houses became more comfortable, warmer and less damp following heat pump installation relative to a house without a heat pump yet installed; CO2 levels also fell. These gains were achieved despite a likely fall in energy use. |
| Keywords: | Heat pumps; indoor temperature; electricity use; wellbeing; Warmer Kiwi Homes |
| JEL: | I18 I31 I38 Q48 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:mtu:wpaper:22_02&r= |
| By: | Masato Kawanishi; Nela Anjani Lubis; Hiroyuki Ueda; Junko Morizane; Ryo Fujikura |
| Abstract: | This study analyzes how and under what conditions technical cooperation may generate larger effects on endogenous and long-term capacity development in developing countries. To this end, we use the case of national greenhouse gas (GHG) inventory in Indonesia, where the task for producing GHG inventories was first outsourced to external experts through a dedicated project, but is now managed by the Ministry of Environment and Forestry (KLHK). While investigating the long-term process through which the country developed its capacity on this issue, we evaluated how and the extent to which the five-year technical cooperation supported by Japan International Cooperation Agency contributed to this by generating catalytic effects. This paper contributes to and complements the existing literature by applying a model of strategic issue diagnosis, by which we traced the evolving issue interpretations at the ministry and their consequent actions. This study finds that the technical cooperation interacted with changes in the institutional environment, raising the issue urgency, feasibility, and interdependence as perceived at KLHK, creating momentum to change their situation, and igniting endogenous capacity development. The study highlights that, as the substantial uncertainty in their reported GHG inventories was identified through the technical cooperation, the issue came to be defined by the ministry as the problem to be solved. This paper identifies the country’s specific context as an important factor to explain a project’s catalytic effect, or the absence thereof. It emphasizes that contexts must be factored in when evaluating projects, as they are often embedded in longer timeframes and in the wider scope that goes beyond the direct beneficiaries. |
| Keywords: | Capacity development, climate change, issue interpretations, carbon emissions, Indonesia |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:jic:wpaper:225&r= |
| By: | Meng, Jia; Zhang, ZhongXiang |
| Abstract: | This paper aims at analyzing the impact of corporate environmenral information disclosure from the perspective of investors. To that end, we have collected environmental information disclosure data of all Chinese listed companies from 2004 to 2020 and controlled the impacts of annual reports on investor response. We apply the Fama-French five-factor model to calculate the accumulative abnormal returns of stocks during the event window period. Our results suggest that environmental information disclosure can have a significant negative response among investors when we take the impacts of annual reports into consideration. Moreover, we find that heavy-polluting companies and companies with high institutional shareholding are more likely to have negative reactions from investors. Notably, the negative response is found significant after the Ambient Air Quality Standard was revised in 2012. Furthermore, high environmental expenditure and strict environmental regulation will result in negative investor responses, while the political connection can alleviate the negative impacts of environmental information disclosure. The results remain robust in different ways. The findings suggest that listed companies may lack the incentive to engage in environmental management and are reluctant to disclose environmental information. Consequently, the government should formulate a mandatory disclosure policy and provide administrative support to environmentalfriendly companies. Besides, companies should improve innovation technology to cut down environmental costs. Meanwhile, investors should be aware of the importance of corporate environmental behaviors and realize the long-term benefits of environmental management of listed companies. |
| Keywords: | Farm Management, Financial Economics |
| Date: | 2022–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:ags:feemwp:317842&r= |
| By: | Mounir Dahmani (Université de Gafsa, Tunisie); Mohamed Mabrouki (Université de Gafsa, Tunisie); Adel Ben Youssef (Université Côte d'Azur, France; GREDEG CNRS) |
| Abstract: | This paper analyzes the nexus between consumption of renewable and non-renewables energies, financial development, diffusion of information and communication technology (ICT) and economic growth in the MENA countries. We employ a cross-section augmented autoregressive distributed lag (CS-ARDL) modeling approach to analyze the effect of our explanatory variables on economic growth. We find a positive impact of renewable and non-renewable energies on economic growth. Financial development is related negatively to economic growth which may be explained among other things, by a weak financial sector, macroeconomic volatility and financial crises, or the existence of non-linear relationships. We find a positive and statistically significant influence of ICT on GDP. Renewable energies and diffusion of ICT can be considered important determinants of improved economic activity, job creation and create jobs and a better environment. |
| Keywords: | ICT, financial development, renewable and non-renewable energy consumption, MENA, dynamic panel, CS-ARDL |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2021-46&r= |
| By: | Alessi, Lucia (European Commission); Battiston, Stefano (University Ca' Foscari of Venice) |
| Abstract: | We develop the first top-down method to estimate the greenness of financial portfolios, in terms of alignment to the EU Taxonomy for sustainable activities. We also develop a method to estimate, at the same time, the portfolio exposure to climate transition risk. We provide sector-level, standardized and transparent coefficients for both estimates, based on definitions of greenness and transition risk that are applicable across countries. We analyse the portfolios of Euro Area investors in 2020, based on the confidential Securities Holdings Statistics of the European Central Bank. We find that, overall, the greenness of Euro Area investors' portfolios is lower than their exposure to transition risk (1.3% vs. 5.5%). Across financial institutions, we estimate greenness and exposure to transition risk, respectively, at 1.4% and 6.1% for investment funds, at 0.3% and 1.7% for banks and at 1.2% and 5.0% for insurers. Our analysis also shows that investors with large amounts invested in green activities can have at the same time large exposures to transition risk. |
| Keywords: | greenness, climate transition risk, climate-related financial disclosures, EU Taxonomy, green financial flows |
| JEL: | G2 G3 Q54 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:jrs:wpaper:202114&r= |
| By: | Lozano, Mark; Kendall, Alissa; Arnold, Gwen; Harvey, John; Butt, Ali |
| Abstract: | The range of efforts to address climate change can span from international collaboration to personal action. This study looks at environmental efforts at the local jurisdictional level. Over the last decade, cities and counties have released climate action plans (CAPs) to set emissions reduction targets and outline actions that will help meet those goals. However, the range of information included in CAPs varies dramatically across jurisdictions. This study examines CAPs released by jurisdictions in California, focusing on the quantity and quality of information presented on the expected GHG emissions reduction, cost, and equity impacts of proposed climate actions. This research develops a framework to assess their inclusion, which could also be used to guide future CAP development, and develops a set of guiding questions to promote the inclusion of equity themes in climate action planning and implementation. To gauge the current state of climate action by local jurisdictions, a survey was implemented to better understand the (i) relative consideration of factors in climate action planning and implementation, (ii) factors which affect the inclusion of equity in climate action, (iii) the primary sources of funding for CAP implementation, and (iv) which factors affect the likelihood that an action is implemented. The survey found that, of the considered factors, expected emissions reduction is considered most during planning and implementation, while external impacts are considered the least. When comparing factors between planning and implementation, cost is significantly more important during implementation. For both phases, equity impacts received average levels of consideration. Free responses revealed that recent pushes by community members has encouraged local jurisdictions to include more equity themes in their climate planning. However, lifecycle equity, which considers local impacts across the lifecycle of an action, and thus beyond jurisdictional borders, is considered infeasible due to resource limitations and beyond the scope of local planning. Better equity planning would require systemic change at the jurisdiction, industry, state, and federal levels. View the NCST Project Webpage |
| Keywords: | Law, Social and Behavioral Sciences, Local government, Climate action plan, Life cycle assessment, Equity |
| Date: | 2022–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsdav:qt9f57q92r&r= |
| By: | Gary Clyde Hufbauer (Peterson Institute for International Economics); Jisun Kim (POSCO Research Institute (POSCO Research Institute); Jeffrey J. Schott (Peterson Institute for International Economics) |
| Abstract: | Reforms proposed in the European Union’s "Fit for 55" climate policy package are likely to sharply increase the cost paid by European firms for their greenhouse gas (GHG) emissions. Recognizing that increased carbon prices would put European firms at a disadvantage in competing with imports from countries that produce without incurring these costs, the European Commission has proposed a Carbon Border Adjustment Mechanism (CBAM) requiring that the most carbon-intensive EU imports either incur comparable carbon charges as EU firms or pay the equivalent of a carbon-based tariff. The CBAM aims to deter carbon leakage, which could arise if firms shift carbon-intensive production out of Europe to facilities in countries that do not tax GHG emissions (or tax at a low rate) and then export the goods to Europe. European production and output would suffer and global climate efforts to reduce GHG emissions would be undercut. The loftier goal is to encourage other countries to follow the European example and strengthen their own national decarbonization policies, which in turn would exempt their goods from CBAM charges. The CBAM would cover five carbon-intensive industries: iron and steel, aluminum, fertilizer, electricity, and cement. Countries most affected by the CBAM include Russia, China, Turkey, the United Kingdom, Ukraine, South Korea, and India. Some are likely to contest the policy, claiming that the CBAM is a unilateral measure that violates World Trade Organization rules and bolsters protectionism while hampering rather than encouraging efforts in other countries to tackle climate change. A better and more feasible approach would be adoption of a CBAM moratorium while negotiations are conducted to promote carbon abatement policies that comply with the rules-based global trading system. |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:iie:pbrief:pb21-23&r= |
| By: | ITF |
| Abstract: | This report provides an overview of technological, operational and policy measures that can accelerate the decarbonisation of aviation. Its goal is to support governments and aviation stakeholders looking to introduce aviation decarbonisation measures regionally, nationally and internationally. All measures are discussed in light of their cost-effectiveness and the potential barriers to their implementation. The report summarises the conclusions from an expert workshop held in February 2020 as part of the International Transport Forum’s Decarbonising Transport initiative. |
| Date: | 2021–07–29 |
| URL: | http://d.repec.org/n?u=RePEc:oec:itfaac:94-en&r= |
| By: | Rodier, Caroline; Randall, Creighton; Garcia Sanchez, Juan Carlos; Harrison, Makenna; Francisco, Jerel; Tovar, Angelly |
| Abstract: | Over the last six years, from 2016 through 2021, a wave of new federal, state, and local funding has supported carsharing services that use electric vehicles and install electric vehicle chargers to reduce greenhouse gas emissions (GHGs) and address climate change. In addition, many of these same funding programs allow support for the location of services in underserved communities with fare levels that enable community members to access these services. This study first explores the potential climate change benefits for carsharing services and the need for these services in underserved areas by reviewing the available published literature. Next, the study discusses the evolution of carsharing in the U.S., including non-profit, for-profit, and recent government-funded carsharing, drawing on published reports, newspaper articles, and expert interviews. Finally, the authors draw conclusions of relevance for future government-funded carsharing programs. View the NCST Project Webpage |
| Keywords: | Business, Social and Behavioral Sciences, carsharing, electric vehicles, pilot, evaluation, equity |
| Date: | 2022–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsdav:qt5nf0m5mc&r= |
| By: | Lionel Fontagné (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Erica Perego; Gianluca Santoni |
| Abstract: | Pandemics, global warming, food security, ageing, depletion of certain raw materials... our economies are faced with global problems, calling for long term actions and raising intergenerational issues. To guide economic policies, it is therefore essential to have a sound framework for reflection. The MaGE (Macroeconometrics of the Global Economy) model, developed by CEPII, makes it possible to draw the fundamental trends of the world economy in the long term, up to 2050. Assuming that the current dynamics of growth and technological catch-up will continue, and taking into account demographic dynamics, the balance of economic power will be strongly transformed over the next generation. Above all, energy consumption is expected to continue to grow at a sustained rate, and even double, despite efforts to improve energy efficiency. Ambitious policies to decarbonize our economies will be necessary to make these prospects for economic growth sustainable. |
| Keywords: | Energy efficiency,Growth models,Long-term growth,Energy use,Total Factor Productivity |
| Date: | 2021–12–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03474032&r= |
| By: | Frondel, Manuel; Marggraf, Clemens; Sommer, Stephan; Vance, Colin |
| Abstract: | A large proportion of local pollutants originating from the road transport sector is generated during the so-called cold-start phase of driving, that is, the first few minutes of driving after a car has stood inactive for several hours. Drawing on data from the German Mobility Panel (MOP), this paper analyzes the factors that affect the frequency of cold starts, approximated here by the number of car tours that a household takes over the course of a week. Based on fixed-effects panel estimations, we find a negative and statistically significant effect of fuel prices on the number of tours and, hence, cold starts. Using our estimates to explore the spatial implications arising from fuel price increases stipulated under Germany's Climate Programme 2030, we find substantial impacts on the number of avoided tours even for modest fuel price increases of 20 cents per liter, particularly in urban areas. This outcome lends support to using carbon pricing as a means to improve both global climate and local air quality, pointing to a co-benefit of climate policy. |
| Keywords: | German mobility panel,fuel prices,car use |
| JEL: | I10 Q53 R41 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:896&r= |
| By: | Norbert MALANOWSKI (VDI Technologiezentrum GmbH); Jana Steinback (VDI Technologiezentrum GmbH); Annerose Nisser (VDI Technologiezentrum GmbH); Simon Beesch (VDI Technologiezentrum GmbH); Sidonia Von Proff (VDI Technologiezentrum GmbH); Els Van Der Velde (IDEA Consult); Daniela Kretz (IDEA Consult) |
| Abstract: | The study provides theoretical as well as case-study based evidence for the potential of European industries to become carbon neutral and provide job security and growth in the EU. The study identifies, maps, and analyses Global Innovation Networks, i.e. net-works between industry and other actors that facilitate innovation, and their role in making the European Green Deal a success. The study also presents the main current policy context in place in the EU, China and the U.S., e.g. regulatory and financial frameworks, and identifies the main drivers and barriers for investing in technologies relevant for Europe's Green Deal. In addition, a concise policy toolbox for Research & Development & Innovation (R&D&I) policies supporting technologies relevant for Eu-rope's Green Deal is discussed. It moves beyond the current European, national, regional and sectoral policy instruments and mixes of policies based on the insights obtained throughout the whole study. The findings offer an important knowledge base for devising new and additional policy instruments. |
| Keywords: | Green Deal, ecosystems, innovation, competitiveness |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc126482&r= |
| By: | Rafael Wildauer (Department of International Business and Economics, University of Greenwich); Stuart Leitch (University of Greenwich); Jakob Kapeller (Institute for Socio-Economics, University of Duisburg-Essen, Germany; Institute for Comprehensive Analysis of the Economy, Johannes Kepler University Linz, Austria) |
| Abstract: | This policy study asks to what extent large-scale public investment efforts could be a viable tool to provide the necessary infrastructure to break Europe’s dependency on fossil fuel and carbon emissions more broadly. We estimate semi-structural VAR models for the EU27. These are used to study the impact of permanent as well as 5-year long public investment programmes. Three key findings emerge: First, government investment multipliers for the EU27 are large and range from 5.12 to 5.25. Second, debt-to-GDP ratios are likely to fall in response to the strong economic impulse generated by additional public investment spending. The study therefore classifies additional public investment spending in the EU27 as sustainable fiscal policy. Third, single country investment initiatives will likely lead to smaller economic expansions when compared to coordinated EU-wide investment, due to Europe’s strong intra-member state trade flows. A coordinated approach to fiscal policy is thus substantially more effective not only when it comes to delivering network-dependent infrastructure (rail, grid) but also with respect to the economic stimulus it creates. |
| Keywords: | E62 Fiscal Policy; H63 Sovereign Debt |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:ico:wpaper:133&r= |
| By: | Sofia Teives Henriques (University of Porto); Paul Sharp (University of Southern Denmark); Xanthi Tsoukli (University of Bamberg); Christian Vedel (University of Southern Denmark) |
| Abstract: | Economic historians have debated the importance of energy for economic development.Energy economists would argue that energy systems need to be adaptable in the face of shocks. In this light, we consider the case of Denmark, a country which was almost entirely dependent on imports of coal, and where a long coastline made imports, largely from the UK, cheap and available. Towards the end of the First World War, however, and well into the 1920s, coal imports were cut off or difficult to obtain. We exploit detailed microlevel data from butter factories, covering the period 1900-28. We find that firms were able to adapt and make use of alternative fuels, notably peat, although its availability varied across the country. Employing a difference-in-differences approach, we find significant productivity advantages for creameries closer to available peat fields in the wake of the coal shortage. |
| Keywords: | Coal, dairying, Denmark, energy, geography, peat, productivity JEL Classification:N54, O13, Q40 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:598&r= |
| By: | Giulia Ceccantoni (Memotef, Sapienza University); Ornella Tarola (Department of Social Sciences and Economics, Sapienza University of Rome); Cecilia Vergari (Department of Economics and Management, University of Pisa) |
| Abstract: | taxes can drive a more sustainable European market. However, unilateral mitigation measures can reduce the competitiveness of carbon-intensive industries, thereby inducing relocation. In this paper, we wonder whether a tax can effectively curb emissions without hurting firms. Our analysis entry point is that the level of emissions in a region is jointly determined by (i) the number of consumers buying dirty goods and (ii) the environmental quality of these products. Thus, to curb emissions, on the one hand, firms have to reduce their goods emissions intensity. On the other hand, consumers have to reduce the consumption of dirtier goods. This leads to defining a tax whose burden depends on the number of consumers buying the brown products and the relative quality of these products. We show that under this tax, lower emissions do not come at the expense of lower profits. |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:saq:wpaper:3/22&r= |
| By: | ITF |
| Abstract: | This report assesses the potential of zero carbon supply chains via a case study of the freight transport chain linked to the port of Hamburg. It analyses the initiatives taken by selected main stakeholders to decarbonise freight transport. In addition, it offers recommendations on how the move towards zero carbon supply chains could be accelerated. |
| Date: | 2021–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:oec:itfaac:91-en&r= |
| By: | Grafström, Jonas (The Ratio Institute); Sandström, Christian (The Ratio Institute) |
| Abstract: | Can economic growth and environmental sustainability coexist? This book describes how emissions and use of natural resources has changed in Sweden over time. <p> Since 1990, Sweden’s population has increased by more than 1.6 million and the economy has almost doubled. At the same time, environmentally harmful emissions, and the use of natural resources in many areas have decreased both in absolute and relative terms. CO2 emissions decreased by 27 percent between 1990 and 2018. Per GDP, CO2 saw a decline by 60 percent during the period. <p> Consumption of water, electricity and energy has remained constant during this period, despite such an increase in GDP. Out of 26 measured pollutants, 24 had declined 1990-2018. The decline was on average 52 percent, and per GDP 77 percent. <p> These results give cause for cautious optimism. <p> If Sweden can combine a growing economy with an improved environment, other countries can follow. |
| Keywords: | Economic growth; sustainability |
| JEL: | O10 |
| Date: | 2021–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0352&r= |
| By: | Nida Cakir Melek; Musa Orak |
| Abstract: | As the atmospheric concentration of CO2 emissions has grown to record levels, calls have grown for governments to make steeper emissions cuts, requiring to reduce an economy’s use of fossil energy dramatically. Meanwhile, in the U.S., fossil energy still met 80 percent of the total energy demand as of 2019. This paper examines U.S. energy dependence, measured by its factor share, using a simple neoclassical framework in a systematic way. We find that with empirically plausible differences in substitution elasticities, particularly with a time-varying substitution elasticity between equipment capital and energy, changes in observed factor inputs can account for the variation in the income share of energy. Our analysis suggests that energy-saving technical change may simply be serving as a proxy for capital-energy substitutability. We also use our framework to think about the future. Substitution possibilities among different factor inputs can allow for a decline in the factor share of energy in the long-run. |
| Keywords: | Energy; Emissions |
| JEL: | E13 E25 J23 J68 Q41 Q42 Q48 |
| Date: | 2021–12–22 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedkrw:93601&r= |
| By: | Catalina Georgeta Dinu (Transilvania University of Brasov, Romania) |
| Abstract: | The supply of natural gas and electricity continued to be a difficult goal for many household consumers in Romania, despite sufficient natural resources. The cause was represented by the existence of a monopoly over the provision of those two services, but, due to the liberalization of the market for the supply of natural gas and electricity, several benefits are to be implemented in this area. In this sense, both the primary and the secondary legislation have been already amended, and the future domestic and non-domestic customers expect the unblocking of the situation in the shortest possible time, issue that implies the efficient mobilization of all public authorities and of the system distribution operators. Therefore, we will analyze these new legal provisions and how they will influence the already concluded concession contracts, but also whether they will improve the quality of life of the applicants. |
| Keywords: | concession contract, public service, natural gas, applicant, operator |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:smo:lpaper:0050&r= |
| By: | MARTIRANO Giacomo; PIGNATELLI Francesco (European Commission - JRC); VINCI Fabio; STRUCK Christian; COORS Volker; FITZKY Matthias; HERNÁNDEZ MORAL Gema; SERNA-GONZÁLEZ Victor; RAMOS-DÍEZ Ivan; VALMASEDA Cesar |
| Abstract: | According to studies carried out by European Commission Directorate-General for Energy (DG ENER), buildings are responsible for approximately 40% of the primary energy consumption in Europe. Therefore, there is a vital need to take actions to improve the energy efficiency of the building stock. Predictions of the heat demand at the building level, for an entire district or city, could provide valuable support to different stakeholders involved in the energy efficiency policy cycle. However, these predictions are hampered by the lack of standardised calculation methodologies and interoperable building data to perform energy simulations. Another drawback is the low degree of comparability of the predictions. The latter has different causes: different calculation methodologies, diverse accuracy of building data, heterogeneous encoding of data and different ways of representing and visualising data.Predictions of energy heat demand using the simulation software SimStadt have been produced, analysed and compared in four different case studies in three different Member States. The simulations were done with 3D building data of different accuracy and from different sources, which made it possible to identify significant causes of mismatch between simulations and real consumption scenarios. Several mapping exercises between the CityGML standard and the INSPIRE Directive data models have been documented to improve the interoperability of input and output datasets used in the simulations. |
| Keywords: | Energy efficiency, Location interoperability, energy performance of buildings, energy labels, energy heat demand, SimStadt, 3D building data, buildings, CityGML, ELISE action, Interoperability, Energy simulations |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc124885&r= |
| By: | Massimo Dragotto (Dept. of Economics and Management, University of Padova, Italy); Marco Magnani (Dept. of Economics and Management, University of Padova, Italy and Italian Regulatory Authority for Energy, Network and the Environment (ARERA)); Paola Valbonesi (Dept. of Economics and Management, University of Padova, Italy and Higher School of Economics, National Research University, (HSE-NRU), Moscow) |
| Abstract: | By exploiting an original 4-year dataset on the Italian retail electricity market, we investigate the relationship between firm incumbency — measured by market concentration at the regional level — and consumer inertia — identified by the yearly percentage of consumers switching providers and/or contract, both from the regulated to the free market and within the free market. Our main results show that i) regions recording stronger firm incumbency exhibit larger consumer inertia in leaving the regulated market, this effect being reinforced by the number of active free market retailers; ii) switching by consumers who already are in the free market is, instead, positively affected by firm incumbency. In light of these results, we provide prescriptions for policymakers targeting the migration of consumers towards free-market contracts and, consequently, full energy market liberalisation. |
| Keywords: | Electricity Retail Markets, Liberalisation in Electricity Markets, Incumbency, Consumer Behaviour |
| JEL: | D12 L11 L98 Q48 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:pad:wpaper:0277&r= |
| By: | Wang, Guihua; Miller, Marshall; Fulton, Lewis |
| Keywords: | Social and Behavioral Sciences, cost, heavy-duty trucks, battery electric vehicles, fuel cell electric vehicles |
| Date: | 2022–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsdav:qt36c08395&r= |
| By: | OECD |
| Abstract: | According to latest data from the OECD and the IEA, government support for the production and use of fossil fuels across 81 major economies totalled USD 351 billion in 2020, amounting to USD 183 billion across 50 OECD, G20, and Eastern Partnership economies. While the difficulty of reform is evident from the range and complexity of challenges confronting governments in the phasing-out of fossil-fuel subsidies, APEC economy-led fossil-fuel subsidy peer reviews play a key role in pointing out commonly faced challenges, and present options to tackle them more effectively. This report is the first comprehensive attempt to document “scalable” lessons and examples of good practice emerging from fossil-fuel subsidy peer reviews: taking stock of progress in their phase-out as reflected in the peer review reports, considering the role of the peer review process in promoting reform, and proposing potential ways to enhance the process. Eleven peer reviews are documented, seven of which were chaired by the OECD and four in which the IEA was a member of the review panel. Six of these peer reviews were conducted under the auspices of the G20, and four under APEC auspices, with the addition of the OECD-IEA review of the Netherlands, modelled on the G20 review process. The economies reviewed inventoried between three to thirty-nine measures, of an average self-declared value of USD 13 billion, for those reviews which quantified fossil fuel support measures. The “scalable” lessons drawn from the peer reviews can be used to further spur progress towards rationalising and phasing out fossil-fuel subsidies, thanks to the insights on the approaches and good practices for designing the reform process. These insights include the need to accommodate for differing contexts, objectives and definitions; to prioritise inter-ministerial co-ordination; to promote active government and stakeholder participation; and to engage a cross-sectional peer review panel. |
| Keywords: | APEC, challenges, designing reform process, Environment, fossil fuel, good practice, peer review, phase-out, reform, subsidy reform, Trade |
| JEL: | Q48 |
| Date: | 2022–02–09 |
| URL: | http://d.repec.org/n?u=RePEc:oec:envaac:29-en&r= |
| By: | Alessandro Ferrari (Bank of Italy); Valerio Nispi Landi (Bank of Italy) |
| Abstract: | In a DSGE model, we study the effectiveness of a Green QE, i.e. a program of green-asset purchases by the central bank, along the transition to a carbon-free economy. The model is characterized by green firms that produce using a clean technology and brown firms that pollute but they can pay a cost to abate emissions. The transition is driven by an emission tax. We analyze the evolution of macroeconomic variables along the transition and we compare different versions of Green QE. We show two main findings, in our baseline calibration, where the green and the brown goods are imperfect substitutes. First, Green QE helps to further reduce emissions along the transition, but its quantitative impact on the stock of pollution is small. Second, we find the largest effects when the central bank invests in green assets in the early stage of the transition. Moreover, we highlight that the elasticity of substitution between the green and the brown good is a crucial parameter: if the goods are imperfect complements (an elasticity lower than one), Green QE raise emissions. |
| Keywords: | central bank, monetary policy, quantitative easing, climate change |
| JEL: | E52 E58 Q54 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_1358_22&r= |
| By: | Wendy Annecke; Peta Wolpe |
| Abstract: | This paper explores the extent to which social policies in South Africa might serve as mechanisms to enhance the transition to a low carbon economy and contribute to mitigating some of the negative impacts towards ensuring a holistic and just transition. It attempts to contribute to the fluid and contested nature of the debate on a just transition in South Africa by mapping the entrenched historical implications of coal use, overlaying these with a description of some of the policies developed to address energy and climate change and analysing the extent to which current social protection policies, designed to facilitate well-being, might be harnessed towards a more equitable society and a just transition. |
| Keywords: | Afrique du Sud |
| JEL: | Q |
| Date: | 2022–02–11 |
| URL: | http://d.repec.org/n?u=RePEc:avg:wpaper:en13623&r= |