nep-ene New Economics Papers
on Energy Economics
Issue of 2022‒10‒10
sixty-five papers chosen by
Roger Fouquet
London School of Economics

  1. Defining gas price limits and gas saving targets for a large-scale gas supply interruption By Neuhoff, K.
  2. A potential mechanism of gas supply-security cooperation based on a game-theoretic model By D\'avid Csercsik
  3. Impact of proximity to gas production activity on birth outcomes across the US By Christopher F. Baum; Hailee Schuele; Philip J. Landrigan; Summer Sherburne Hawkins
  4. Elusive Effects of Oil and Gas Export Embargoes By Kai A. Konrad; Marcel Thum
  5. Surging Energy Prices in Europe in the Aftermath of the War: How to Support the Vulnerable and Speed up the Transition Away from Fossil Fuels By Oya Celasun; Ms. Aiko Mineshima; Mr. Nicolas Arregui; Victor Mylonas; Mr. Anil Ari; Iulia Teodoru; Mr. Simon Black; Karlygash Zhunussova; Ms. Dora M Iakova; Ian W.H. Parry
  6. Energy price shocks and stabilization policies in a multi-agent macroeconomic model for the Euro Area By Enrico Turco; Davide Bazzana; Massimiliano Rizzati; Emanuele Ciola; Sergio Vergalli
  7. Environmental Economics, Regulation, and Innovation By Mads Greaker; David Popp
  8. The Human Perils of Scaling Smart Technologies: Evidence from Field Experiments By Alec Brandon; Christopher Clapp; John List; Robert Metcalfe; Michael Price
  9. Financing the transition: seizing opportunities for a green recovery By Jan Willem van den End; Guido Schotten; Sophie Steins Bisschop
  10. Emissions pricing instruments with intermittent renewables: second-best policy By Nandeeta Neerunjun
  11. Changing Electricity Markets: Quantifying the Price Effects of Greening the Energy Matrix By Emanuel Kohlscheen; Richhild Moessner
  12. Green Energy Depends on Critical Minerals. Who Controls the Supply Chains? By Leruth, Luc; Mazarei, Adnan; Regibeau, Pierre; Renneboog, Luc
  13. De-growth vs. green growth? Let's focus on the common ground to speed up the transition to sustainability! By Martin Pfaffenbach; Tobias Kronenberg; Wolf Rogowski
  14. Technical and Economic Feasibility Analysis of Underground Hydrogen Storage: A Case Study in Intermountain-West Region USA By Fangxuan Chen; Zhiwei Ma; Hadi Nasrabadi; Bailian Chen; Mohamed Mehana; Jolante Wieke Van Wijk
  15. Potential Uses of Hydrogen in California’s Clean Energy Transition By Fulton, Lewis PhD
  16. Hydrogen Can Have a Much Lower Carbon Intensity than Fossil Fuels But This Largely Depends on How It Is Produced and Distributed By Lipman, Timothy PhD; Horvath, Arpad PhD; Collins, Stephanie; Kendall, Allisa PhD; Fulton, Lewis PhD; Busch, Pablo
  17. Panorama de la producción y el comercio de autobuses eléctricos en el mundo y en América Latina y el Caribe By Durán Lima, José Elías; Herreros, Sebastián
  18. Bidirectional coupling of a long-term integrated assessment model with an hourly power sector model By Chen Chris Gong; Falko Ueckerdt; Robert Pietzcker; Adrian Odenweller; Wolf-Peter Schill; Martin Kittel; Gunnar Luderer
  19. Le partage d'électricité et les communautés d'énergie à Bruxelles et en Wallonie By Quentin Peiffer
  20. On dividends and market valuations of Australia’s listed electricity utilities: regulated vs. merchant By Simshauser, P.
  21. TSO-DSO Coordination for the Procurement of Balancing and Congestion Management Services: Assessment of a meshed-to-meshed topology By Leandro Lind; Rafael Cossent; Pablo Frias
  22. Joint production planning, pricing and retailer selection with emission control based on Stackelberg game and nested genetic algorithm By Linda Zhang; Gang D.U.; Jun W.U.; Yujie M.A.
  23. Labor Share, Industry Concentration and Energy Prices : Evidence from Europe By Çürük, Malik; Rozendaal, Rik
  24. The Impact of the European Carbon Market on Firm Productivity: Evidence from Italian Manufacturing Firms By Filippo Maria D’Arcangelo; Giulia Pavan; Sara Calligaris
  25. Prices versus Quantities with Morally Concerned Consumers By Schmidt, Klaus M.; Herweg, Fabian
  26. Simulaciones del precio social del carbono en el sector del transporte público de América Latina y el Caribe By Priego Adriano, Marco
  27. Rendre acceptable la nécessaire taxation du carbone - Quelles pistes pour la France ? By Mireille Chiroleu-Assouline
  28. Climate Policy, Irreversibilities and Global Economic Shocks By Anwesha Banerjee; Stefano Barbieri; Kai A. Konrad
  29. Simulaciones del precio social del carbono en la infraestructura ferroviaria y comparación entre modos de transporte en países seleccionados de América Latina y el Caribe By Pica, Andrés; Arriagada, Javier; Rivera, Antonia; Martínez, Vicente
  30. Políticas de atracción de inversiones para el financiamiento de la energía limpia en América Latina By Podestá, Andrea; Eirin, María Silvina; Contreras Lisperguer, Rubén; Salgado, René
  31. United Kingdom: Technical Assistance Report-Public Investment Management Assessment: Climate Change Module By International Monetary Fund
  32. Austria: 2022 Article IV Consultation-Press Release; Staff Report By International Monetary Fund
  33. Republic of Latvia: 2022 Article IV Consultation-Press Release and Staff Report By International Monetary Fund
  34. Is Physical Climate Risk Priced? Evidence from Regional Variation in Exposure to Heat Stress By Viral V. Acharya; Timothy Johnson; Suresh Sundaresan; Tuomas Tomunen
  35. Focusing Climate Negotiations on a Uniform Common Commitment Can Promote Cooperation By Schmidt, Klaus M.; Ockenfels, Axel
  36. Climate Risks and FDI By Grace Weishi Gu; Galina Hale
  37. Climate Risks and Predictability of Commodity Returns and Volatility: Evidence from Over 750 Years of Data By Jacobus Nel; Rangan Gupta; Mark E. Wohar; Christian Pierdzioch
  38. Das Design von Klimaschutzverhandlungen By Schmidt, Klaus M.
  39. Do Climate Risks Predict US Housing Returns and Volatility? Evidence from a Quantiles-Based Approach By Elie Bouri; Rangan Gupta; Hardik A. Marfatia; Jacobus Nel
  40. Углеродный рынок и климатические проекты: перспективы и возможности для Алтайского края By Pomogaev, Vitalii
  41. Debt-for-Climate Swaps: Analysis, Design, and Implementation By Mr. Marcos d Chamon; Mr. Vimal V Thakoor; Erik Klok; Mr. Jeromin Zettelmeyer
  42. Real estate and climate transition risk: A financial stability perspective By Francesco Caloia; David-Jan Jansen; Remco van der Molen; Lu Zhang; Helga Koo
  43. A Model United Nations Experiment on Climate Negotiations By Hofmann, Elisa; Kyriacou, Lucas; Schmidt, Klaus M.
  44. Exposure to climate shocks, poverty and happiness: the ”three little pigs” effect By Leonardo Becchetti; Sara Mancini; Sara Savastano
  45. The policies, the actions, and the political-administrative organization of Emilia-Romagna region to combat the climate change: a social network approach By Clarissa Caimol
  46. Bank Stress Testing of Physical Risks under Climate Change Macro Scenarios: Typhoon Risks to the Philippines By Ms. Hiroko Oura; Mr. Fabian Lipinsky; Stephane Hallegatte; Paola Morales; Nicola Ranger; Martijn Gert Jan Regelink; Henk Jan Reinders
  47. Optimal coalition splitting with heterogenous strategies By Raouf Boucekkine; Carmen Camacho; Weihua Ruan; Benteng Zou
  48. Climate Risks and Predictability of the Trading Volume of Gold: Evidence from an INGARCH Model By Sayar Karmakar; Rangan Gupta; Oguzhan Cepni; Lavinia Rognone
  49. Walking the talk, but above all, talking the walk: Looking green for market stakeholder engagement By Javier Amores‐salvadó; Gregorio Martin‐de Castro; Elisabeth Albertini
  50. Air Quality Alerts and Don't Drive Appeals: Cautionary Evidence from Germany By Dangel, Alexander; Goeschl, Timo
  51. India’s Progressive Environmental Case Law: A Worthy Roadmap for Global Climate Change Litigation By Ram Mohan, M.P.; Kini, Els Reynaers; Prasad, Sriram
  52. Achieving an 80% Carbon Free Electricity System in China by 2035 By Abhyankar, Nikit; Lin, Jiang; Kahrl, Fredrich; Yin, Shengfei; Paliwal, Umed; Liu, Xu; Khanna, Nina; Phadke, Amol A; Luo, Qian
  53. Local economic development and oil discoveries By Jonas Hveding Hamang
  54. Identifying rent-sharing using firms' energy input mix By Mertens, Matthias; Müller, Steffen; Neuschäffer, Georg
  55. Searching for Sustainable Footprints: Does ICT increase CO2 emissions? By Olatunji A. Shobande; Simplice A. Asongu
  56. Climate action guidelines 2022–2030: City of Belmopan, Belize By De Jesús, Indhira
  57. Carbon Monitor-Power: near-real-time monitoring of global power generation on hourly to daily scales By Biqing Zhu; Xuanren Song; Zhu Deng; Wenli Zhao; Da Huo; Taochun Sun; Piyu Ke; Duo Cui; Chenxi Lu; Haiwang Zhong; Chaopeng Hong; Jian Qiu; Steven J. Davis; Pierre Gentine; Philippe Ciais; Zhu Liu
  58. Climate Experts’ Views on Hydrocarbon Energy Phase-Out By Kai A. Konrad; Raisa Sherif
  59. Transición energética en Colombia: política, costo de la carbono – neutralidad acelerada y papel del gas natural By Juan Benavides; Sergio Cabrales; Martha E. Delgado-Rojas
  60. Designing an Optimized Electric Vehicle Charging Station Infrastructure for Urban Area: A Case study from Indonesia By Nissa Amilia; Zulkifli Palinrungi; Iwan Vanany; Mansur Arief
  61. Measuring the effects of power system reform in Jiangsu province, China from the perspective of Social Cost Benefit Analysis By Li, T.; Gao, C.; Pollitt, M.; Chen, T.; Ming H.
  62. Environmental Subsidies to Mitigate Transition risk By Eric Jondeau; Grégory Levieuge; Jean-Guillaume Sahuc; Gauthier Vermandel
  63. Economic impact of climate change By Claudia Custodio; Miguel A. Ferreira; Emilia Garcia-Appendini; Adrian Lam
  64. On the Pricing Effects of Bitcoin Mining in the Fossil Fuel Market: The Case of Coal By Xolani Sibande; Riza Demirer; Rangan Gupta
  65. Explaining Household Expenditure On Cooking Fuel: Role Of Income And Socio-Economic Status By Salman Haider

  1. By: Neuhoff, K.
    Abstract: Should deliveries of Russian gas by pipeline be interrupted for an extended period of time, then gas prices could explode to up to several hundred Euros per MWh due to scarcity of supply. This risk is already reflected in future and spot gas prices and has caused much of the current extremely high gas price levels and volatility. Any additional price increase after a potential large-scale gas supply interruption would likely trigger even more government interventions in EU’s energy markets, with the objective to limit costs for households and other consumers. To avoid such ad-hoc measures, the EU Commission has proposed in the REPowerEU communication to agree already now, ahead of any potential large-scale interruption, on a coordinated European response to a large-scale gas supply interruption. We explore how the proposed measures, which include binding national gas saving targets and limits to the gas price in the case of large-scale gas supply interruptions, would impact supply and demand after an interruption. We also assess how the level of the price limit would impact the supply and demand balance after an interruption and the price formation prior to it.
    Keywords: Price cap, Security of Supply, Gas saving, Consumer welfare
    JEL: D30 D47 D61 L95
    Date: 2022–09–13
  2. By: D\'avid Csercsik
    Abstract: The escalating gas-supply crisis in the EU calls for immediate political and regulatory actions to improve the energy security. Currently, all member states are aiming to fill their reservoirs independently, while it is not clear how solidarity will or even could be put into practice in the future, i.e. how the accumulated reserves of one or more members may be potentially redistributed to help others in need. In this paper we aim to formalize a simple game-theoretic model in order to capture the basic features of the problem, considering the related uncertainty of the future conditions related to reservoir levels and possible transmission bottlenecks as well. We propose a mechanism for supply-security related cooperation, which is based on voluntary participation, and may contribute to the more efficient utilization of storage capacities if its principles may be later implemented. We demonstrate the operation of the proposed framework on a simple example and show that under the assumption of risk-averse participants, the concept exhibits potential.
    Date: 2022–09
  3. By: Christopher F. Baum (Boston College); Hailee Schuele (Boston College); Philip J. Landrigan (Boston College); Summer Sherburne Hawkins (Boston College)
    Abstract: Despite mounting evidence on the health effects of natural gas development (NGD), including hydraulic fracturing (“fracking”), existing research has been constrained to high-producing states, limiting generalizability. We examined the impacts of prenatal exposure to NGD production activity in all gas-producing US states on birth outcomes overall and by race/ethnicity. Mata routines were developed to link 185,376 NGD production facilities in 28 US states and their distance-weighted monthly output with county population centroids via geocoding. These data were then merged with 2005–2018 county-level microdata natality files on 33,849,409 singleton births from 1,984 counties in 28 states, using nine-month county-level averages of NGD production by both conventional and unconventional production methods, based on month/year of birth. Linear regression models were estimated to examine the impact of prenatal exposure to NGD production activity on birth weight and gestational age, while logistic regression models were used for the dichotomous outcomes of low birth weight (LBW), preterm birth, and small for gestational age (SGA). Overall, prenatal exposure to NGD production activity increased adverse birth outcomes. We found that a 10% increase in NGD production in a county decreased mean birth weight by 1.48 grams. A significant interaction by race/ethnicity revealed that a 10% increase in NGD production decreased birth weight for infants born to Black women by 10.19 grams and Asian women by 2.76 grams, with no significant reductions in birth weight for infants born to women from other racial/ethnic groups. Although effect sizes were small, results were highly consistent. NGD production decreases infant birth weight, particularly for those born to minoritized mothers.
    Date: 2022–09–10
  4. By: Kai A. Konrad; Marcel Thum
    Abstract: Despite the likelihood of an individual vote changing the final outcome is close to zero and voting is not costless, we see significant voter turnout in elections. Voters are often guided by reasons other than changing the outcome, collectively called the ‘expressive motives’. This paper uses an online survey conducted in the United States to identify several expressive voting motives and quantify the relative importance of each of them. One of the main reasons for respondents go to polls is the desire to be part of the democratic process irrespective of whether they can change the outcome. Many of the respondents also believe that if they do not vote, they cannot complain about the government or the state of the democracy at a later stage. Individuals who belong to minority groups are likely to state that they turn out to vote because voting is a privilege not extended to past generations. The likelihood that an individual votes expressively is positively correlated with other expressive political behaviours like donations to political parties, participating in a demonstration, and posting political opinions online. Older individuals and those with higher income and education levels are also more likely to state that they engage in expressive voting.
    Keywords: war sanction export embargo, depletable natural resources, crude oil natural gas autocratic government, insecure property rights, safety of international financial safe-havens
    JEL: Q34 Q35 D74 H12 H56 K33
    Date: 2022–03
  5. By: Oya Celasun; Ms. Aiko Mineshima; Mr. Nicolas Arregui; Victor Mylonas; Mr. Anil Ari; Iulia Teodoru; Mr. Simon Black; Karlygash Zhunussova; Ms. Dora M Iakova; Ian W.H. Parry
    Abstract: We estimate that the recent surge in international fossil fuel prices will raise European households’ cost of living in 2022 by close to 7 percent of consumption on average. Household burdens vary significantly across and within countries, but in most cases they are regressive. Policymakers have mostly responded to the shock with broad-based price-suppressing measures, including subsidies, tax reductions, and price controls. Going forward, the policy emphasis should shift rapidly towards allowing price signals to operate more freely and providing income relief to the vulnerable. The surge in energy prices will encourage energy conservation and investments in renewable energy, but the manyfold rise in natural gas prices could lead to a persistent switch towards coal. To ensure steady progress towards carbon emissions reduction goals, authorities could use the opportunity to strengthen carbon pricing when global fossil fuel prices decline in the future. Non-price incentives for investments in energy efficiency and renewable energy should also be enhanced, as envisaged in the RePowerEU plan.
    Keywords: energy prices; price pass-through; household incidence; distributional analysis; social programs; carbon pricing; climate mitigation; price signal; natural gas price; fossil fuel price; price decomposition; Fuel prices; Natural gas sector; Inflation; Non-renewable resources; Europe; Global; electricity price; Energy conservation
    Date: 2022–07–29
  6. By: Enrico Turco (Fondazione Eni Enrico Mattei and Complexity Lab in Economics, Department of Economics and Finance, Catholic University of Milan); Davide Bazzana (Fondazione Eni Enrico Mattei, Department of Economics and Management, University of Brescia); Massimiliano Rizzati (Fondazione Eni Enrico Mattei); Emanuele Ciola (Fondazione Eni Enrico Mattei, Department of Economics and Management, University of Brescia); Sergio Vergalli (Fondazione Eni Enrico Mattei, Department of Economics and Management, University of Brescia)
    Abstract: Soaring energy prices since fall 2021 have prompted European governments to introduce policy measures to support households and businesses. In this paper, we employ the MATRIX model, a multi-sector and multi-agent macroeconomic model calibrated on the Euro Area, to analyze the economic and distributional effects of different types of macro-stabilization policies in response to energy price shocks. Simulation results show that, in the absence of stabilization policies, an increase in fossil fuel price would lead to a sharp growth in price inflation and a severe contraction in real GDP, followed by a slow but steady recovery. We find no significant effects of generalized tax cuts and household subsidies, while firm subsidies promote a faster recovery but at the expense of greater financial instability in the medium term due to the resulting market distortions. If timely adopted, government-funded energy tariff reduction is the most effective policy in mitigating GDP losses at relatively low public costs, especially if coupled with an extra-profit tax on energy firms. Energy entrepreneurs benefit from rising fuel prices in all policy scenarios, but to a lesser extent under energy tariff cuts and windfall profits tax, favouring, in that case, workers and downstream firms owners.
    Keywords: Energy shocks, Policy analysis, Agent-based models, Macroeconomic dynamics
    JEL: C63 E63 O13 Q43
    Date: 2022–09
  7. By: Mads Greaker; David Popp
    Abstract: This paper provides a primer on the economics of environmental innovation. Our intention is not to write a pure review paper, but to also provide an up-to-date textbook treatment on the issue. Thus, we start by defining the marginal costs of both emissions and of emissions abatement. We then analyze theoretically how innovation may affect marginal abatement costs. We also cover the different modelling choices with respect to how the innovation process is represented mathematically and how different environmental policy measures could affect environmental innovation. Our theoretical propositions are all illustrated with examples from the empirical literature. A special emphasis is placed on the recent literature on directed technical change and the potential impact of government intervention in the research and development choices of private firms.
    JEL: Q55 Q58
    Date: 2022–09
  8. By: Alec Brandon; Christopher Clapp; John List; Robert Metcalfe; Michael Price
    Abstract: Smart-home technologies have been heralded as an important way to increase energy conservation. While in vitro engineering estimates provide broad optimism, little has been done to explore whether such estimates scale beyond the lab. We estimate the causal impact of smart thermostats on energy use via two novel framed field experiments in which a random subset of treated households have a smart thermostat installed in their home. Examining 18 months of associated high-frequency data on household energy consumption, yielding more than 16 million hourly electricity and daily natural gas observations, we find little evidence that smart thermostats have a statistically or economically significant effect on energy use. We explore potential mechanisms using almost four million observations of system events including human interactions with their smart thermostat. Results indicate that user behavior dampens energy savings and explains the discrepancy between estimates from engineering models, which assume a perfectly compliant subject, and actual households, who are occupied by users acting in accord with behavioral economists' conjectures. In this manner, our data document a keen threat to the scalability of new user-based technologies.
    Date: 2022
  9. By: Jan Willem van den End; Guido Schotten; Sophie Steins Bisschop
    Abstract: Over five years ago the world’s leaders signed the Paris Climate Agreement. That set a clear limit for global warming, namely a maximum of 2°C or preferably 1.5°C. Many countries translated the Paris objectives into specific greenhouse gas reduction targets enshrined in climate laws. The EU aims to be climate-neutral in 2050, with an intermediate target of a reduction of at least 55% of CO2 in 2030 compared to 1990. This is a more ambitious target than the Netherlands has set at national level in the Climate Act (-49%). Despite these clear, ambitious climate targets, the current efforts are still insufficient.
    Date: 2021–06
  10. By: Nandeeta Neerunjun (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique, M2P2 - Laboratoire de Mécanique, Modélisation et Procédés Propres - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)
    Abstract: I analyze emissions pricing to support the integration of a renewable resource into an electricity mix composed of an emissions-intensive technology. I consider the intermittent nature of the resource such as wind energy and incremental externalities that become severe for high emissions levels. I show that an emissions tax is inefficient when consumers are on flat-rate electricity tariffs and cannot adapt their consumption to varying production. The tax is inefficient even with flexibility in the markets when consumers are on varying tariffs. The renewable resource induces variability in fossil-fueled electricity production and associated marginal damage that does not match a predetermined tax. I study an Emissions Trading Scheme that provides flexibility at the policy level. Emissions permits are traded at varying prices. Since the emissions cap must still be predetermined, I show that it leads to inefficient permits prices that do not match the marginal damages. I also find that the two emissions pricing instruments are not implemented equivalently since the tax differs from the prices of permits.
    Keywords: electricity,renewables,intermittency,emissions tax,Emissions Trading Scheme
    Date: 2022–07–12
  11. By: Emanuel Kohlscheen; Richhild Moessner
    Abstract: We analyse the drivers of European Power Exchange (EPEX) wholesale electricity prices between 2012 and early 2022 using machine learning. The agnostic random forest approach that we use is able to reduce in-sample root mean square errors (RMSEs) by around 50% when compared to a standard linear least square model. This indicates that non-linearities and interaction effects are key in wholesale electricity markets. Out-of-sample prediction errors using machine learning are (slightly) lower than even in-sample least square errors using a least square model. The effects of efforts to limit power consumption and green the energy matrix on wholesale electricity prices are first order. CO2 permit prices strongly impact electricity prices, as do the prices of source energy commodities. And carbon permit prices impact has clearly increased post-2021 (particularly for baseload prices). Among energy sources, natural gas has the largest effect on electricity prices. Importantly, the role of wind energy feed-in has slowly risen over time, and its impact is now roughly on par with that of coal.
    Date: 2022–08
  12. By: Leruth, Luc; Mazarei, Adnan; Regibeau, Pierre; Renneboog, Luc (Tilburg University, School of Economics and Management)
    Date: 2022
  13. By: Martin Pfaffenbach; Tobias Kronenberg; Wolf Rogowski
    Abstract: In the light of anthropogenic climate change, a polarized discussion about the right measures to keep economic activity within the planet's ecological boundaries has emerged: Advocates of de-growth argue that continuous GDP growth is impossible because of natural limits to growth. They call for measures to change individual consumption patterns, to constrain affluence in wealthy countries, and to reform the economic system in such a way that it can fulfil its functions even without continuously growing GDP. Advocates of green growth argue that GDP growth and ecological impacts are conceptionally independent and call for promoting entrepreneurial activity which facilitates the transition towards a carbon-neutral, circular economy without curtailing economic growth. At first sight, the two views appear in unresolvable conflict. After sketching the two approaches, we point towards their common ground and argue that the conflict may concern ideologies rather than evidence-based policy proposals. Taken seriously, both call e.g. for urgent action; for fundamental reforms to correct faulty price signals; for promoting a circular economy powered by regenerative energy sources; for political measures which enable sufficient life styles; and for evidence-based rather than ideological economic analysis. Focusing on this common ground may accelerate the vital transition to a sustainable economy.
    Keywords: Economic growth, green growth, de-growth, ideological economics
    JEL: O44 Q54 D63
    Date: 2022–05
  14. By: Fangxuan Chen; Zhiwei Ma; Hadi Nasrabadi; Bailian Chen; Mohamed Mehana; Jolante Wieke Van Wijk
    Abstract: Hydrogen is an integral component of the current energy transition roadmap to decarbonize the economy and create an environmentally-sustainable future. However, surface storage options (e.g., tanks) do not provide the required capacity or durability to deploy a regional or nationwide hydrogen economy. In this study, we have analyzed the techno-economic feasibility of the geologic storage of hydrogen in depleted gas reservoirs, salt caverns, and aquifers in the Intermountain-West (I-WEST) region. We have identified the most favorable candidate sites for hydrogen storage and estimated the volumetric storage capacity. Our results show that the geologic storage of hydrogen can provide at least 72% of total energy consumption of I-WEST region in 2020. We also calculated the capital and levelized costs of each storage option. We found that a depleted gas reservoir is the most cost-effective candidate among the three geologic storage options. Interestingly, the cushion gas type and volume play a significant role in the storage cost when we consider hydrogen storage in saline aquifers. The levelized costs of hydrogen storage in depleted gas reservoirs, salt caverns, and saline aquifers with large-scale storage capacity are approximately $1.3, $2.3, and $3.4 per kg of H2, respectively. This work provides essential guidance for the geologic hydrogen storage in the I-WEST region.
    Date: 2022–09
  15. By: Fulton, Lewis PhD
    Abstract: Currently, hydrogen is used in California in only a few significant applications, with refining being the most dominant. However, hydrogen has the potential to be a major zero-carbon energy carrier across many applications, including transportation, buildings, and various industries. What would be required for this kind of scale-up? What is the potential for hydrogen in different sectors and in different parts of the state? How can this potential be realized? Scaling up the use of hydrogen will likely require strong policies because currently it is produced on a small scale and is therefore expensive. This brief covers basic concepts of how hydrogen could be used, and how much end-use demand potential there could be for different applications across transportation, buildings and industry; however, it should be noted that this brief does not consider hydrogen used within the electricity system). It also considers strategy to some degree – such as where the greatest efforts should be placed. It builds on research that is ongoing on UC campuses as well as other sources.
    Keywords: Engineering
    Date: 2022–09–01
  16. By: Lipman, Timothy PhD; Horvath, Arpad PhD; Collins, Stephanie; Kendall, Allisa PhD; Fulton, Lewis PhD; Busch, Pablo
    Abstract: As interest in hydrogen as an energy carrier has increased, the various ways that hydrogen is made are being categorized as “green,” “blue,” “gray,” and other colors in relation to their environmental impact. While these categorizations are somewhat useful to indicate the environmental and climate change impacts of different production pathways, they are not especially useful for policy making or industry decisionmaking purposes because they are subjective. For example, most definitions of green pathways for hydrogen production only include electrolysis from renewable electricity sources; however, Figure 1 indicates additional production pathways with some of these having near-zero or even negative greenhouse gas (GHG) emissions as well as low or no other emissions of concern. To help clarify the role of hydrogen in decarbonizing California, this brief summarizes the latest scientific findings from recent and in-progress research across the University of California Institute of Transportation Studies (UC ITS) concerning the relative carbon intensity (CI) of hydrogen production pathways. It also briefly covers the availability of biomass and biogas in California that could be applied to the production of low-CI hydrogen.
    Keywords: Engineering
    Date: 2022–09–01
  17. By: Durán Lima, José Elías; Herreros, Sebastián
    Abstract: La electrificación del transporte público es una estrategia crecientemente utilizada para avanzar hacia la descarbonización de las economías a nivel mundial. En el presente documento se examina el comercio mundial de autobuses, con especial énfasis en los autobuses eléctricos y sus insumos, con el objetivo de determinar el potencial existente para desarrollar su producción en América Latina y el Caribe. Cuatro países de la región se encuentran entre los principales productores mundiales de autobuses, pero ninguno de ellos ha incursionado en la producción de autobuses eléctricos a gran escala. El análisis permite concluir que el Brasil y México poseen la capacidad para producir vehículos eléctricos, para lo que podrían desarrollar cadenas de suministro con un conjunto de países de la región como la Argentina, Chile, Colombia, el Ecuador y algunos países de Centroamérica. Para que esto se concrete es necesario contar con políticas industriales y tecnológicas específicas tendientes a impulsar la integración productiva a nivel regional.
    Date: 2022–09–06
  18. By: Chen Chris Gong; Falko Ueckerdt; Robert Pietzcker; Adrian Odenweller; Wolf-Peter Schill; Martin Kittel; Gunnar Luderer
    Abstract: Integrated assessment models (IAMs) are a central tool for the quantitative analysis of climate change mitigation strategies. However, due to their global, cross-sectoral and centennial scope, IAMs cannot explicitly represent the spatio-temporal detail required to properly analyze the key role of variable renewable electricity (VRE) for decarbonizing the power sector and end-use electrification. In contrast, power sector models (PSMs) incorporate high spatio-temporal resolutions, but tend to have narrower scopes and shorter time horizons. To overcome these limitations, we present a novel methodology: an iterative and fully automated soft-coupling framework that combines the strengths of a IAM and a PSM. This framework uses the market values of power generation as well as the capture prices of demand in the PSM as price signals that change the capacity and power mix of the IAM. Hence, both models make endogenous investment decisions, leading to a joint solution. We apply the method to Germany in a proof-of-concept study using the IAM REMIND and the PSM DIETER, and confirm the theoretically prediction of almost-full convergence both in terms of decision variables and (shadow) prices. At the end of the iterative process, the absolute model difference between the generation shares of any generator type for any year is
    Date: 2022–09
  19. By: Quentin Peiffer
    Abstract: Sous l'impulsion du droit de l'Union européenne, les consommateurs d'électricité sont invités à participer plus activement aux marchés de l'électricité et à des projets en matière d'énergie renouvelable. Pour y parvenir, il est désormais permis aux clients de partager leur électricité, notamment au travers de communauté d'énergie.
    Keywords: communautés d'énergie; autoconsommation collective
    Date: 2022–09–03
  20. By: Simshauser, P.
    Abstract: Restructuring of Australia’s electricity supply industry during the 1990s and the string of M&A events that followed led to two clear lines of business emerging, i). regulated utilities (i.e. poles & wires), and ii). merchant utilities (i.e. competitive generation and retail). There are dozens of utility businesses in Australia but only four are listed on the Australian Stock Exchange – two regulated and two merchant. Operating in parallel for most of the past two decades, the two utility segments followed very different earnings trajectories over recent years. Unlike merchant firms, regulated utilities avoided the large swings in dividends which characterised merchant firms as Australia’s climate change policy conditions began to tighten. In turn, the comparative stability of regulated utility dividends in the context of a low interest rate environment led to soaring valuations, culminating in simultaneous takeover events. Co-incident delisting of the regulated utilities marks the end of our ability to observe continuous market valuations, and real capital market reactions to changes in network regulation. In this article, the dividend policy and market valuations of the listed regulated utilities are analysed in the context of a falling interest rate environment. Results are consistent with Grullon & Michaely’s lifecycle theory of dividend policy – it would seem the stability provided by Australia’s regulatory framework made the network utilities, rightly or wrongly, a proxy for bond investors in a falling-rate environment. For merchant utilities, the pattern of dividends and earnings are consistent with information content theory. But their valuations have been adversely impacted by a tightening of Australian climate change policies –ironically, this also being the likely trigger of regulated utility takeover events.
    Keywords: Electricity, regulated utilities, dividend policy.
    JEL: D25 D80 G32 L51 Q41
    Date: 2022–09–13
  21. By: Leandro Lind; Rafael Cossent; Pablo Frias
    Abstract: This paper proposes a comprehensive model for different Coordination Schemes (CSs) for Transmission (TSO) and Distribution System Operators (DSO) in the context of distributed flexibility procurement for balancing and congestion management. The model proposed focuses on the coordination between the EHV (TSO) and the HV (DSO) levels, exploring the meshed-to-meshed topology, including multiple TSO-DSO interface substations. The model is then applied to a realistic case study in which the Swedish power system is modeled for one year, considering a representation of the transmission grid together with the subtransmission grid of Uppsala city. The base case scenario is then subject to different scalability and replication scenarios. The paper corroborates the finding that the Common CS leads to the least overall cost of flexibility procurement. Moreover, it shows the effectiveness of the Local Flexibility Market (LFM) for the DSO in the Swedish context in reducing potential penalties in a Multi-level CS.
    Date: 2022–09
  22. By: Linda Zhang (LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique); Gang D.U.; Jun W.U.; Yujie M.A.
    Abstract: In practice, it is of paramount importance that firms make joint decisions in production planning, pricing and retailer selection while considering emission regulation. This is because the joint decisions can ensure firms to obtain higher profits while contributing to sustainable environments. However, due to the problem complexity, no models facilitating such decision making are available. This study aims to develop a model to help firms make optimal joint decisions. To model the situations where a manufacturer is the leader and the retailers are followers, we adopt the Stackelberg game theory and develop a 0–1 mixed nonlinear bilevel program to maximize the profits of both the manufacturer and his retailers. We further develop a nested genetic algorithm to solve the game model. Numerical examples demonstrate (i) the applicability of the game model and the algorithm and (ii) the robustness of the algorithm. Managerial insights are obtained, suggesting that (i) manufacturers need to identify the capacity ranges (called capacity traps) where capacity increases result in reduced profits when making decisions to optimize profits; (ii) retailers should make suitable, e.g., pricing decisions so that the manufacturers can include them in the supply chains; (iii) both manufacturers and retailers may not need to consider the carbon emission buying (or selling) price when making decisions.
    Keywords: Stackelberg game,Nonlinear bilevel programming,Nested genetic algorithm,Emission control,Joint decision making
    Date: 2020–12–15
  23. By: Çürük, Malik (Tilburg University, Center For Economic Research); Rozendaal, Rik (Tilburg University, Center For Economic Research)
    Keywords: energy prices; labor share; market concentration; factor substitution
    Date: 2022
  24. By: Filippo Maria D’Arcangelo (OECD); Giulia Pavan (Compass Lexecon); Sara Calligaris
    Abstract: The European Union Emissions Trading System has raised concerns about possible detrimental effects on firms production through an increase in polluting costs, unless firms change inputs or increase the efficiency in the way they produce. We provide evidence of the causal impact of this policy on firms’ input choices and on total factor productivity on Italian manufacturing firms. Our empirical strategy combines structural estimation of firms’ production function and techniques for policy evaluation. Moreover, we argue that a commonly used strategy in this literature, consisting in using propensity score matching on the productivity obtained from estimating the production function, does not provide valid inference. We rely instead on an innovative structural approach. We find that the policy has a small negative effect on productivity that is heterogeneous across industries. We show that these findings are consistent with firms switching fuels in production, rather than undergoing a substantial process change.
    Keywords: Emission trading, EU ETS, Environmental Policy, Manufacturing, Productivity, Production Function
    JEL: Q58 L23 L26
    Date: 2022–09
  25. By: Schmidt, Klaus M. (LMU Munich); Herweg, Fabian (University of Bayreuth)
    Abstract: It is widely believed that an environmental tax (price regulation) and cap-and-trade (quantity regulation) are equally e
    Keywords: emissions trading; carbon tax; climate change; prices versus quantities; behavioral industrial organization;
    JEL: D62 H23 Q52 Q58
    Date: 2021–01–19
  26. By: Priego Adriano, Marco
    Abstract: El sector del transporte es una fuente importante de emisiones de gases de efecto invernadero (GEI), principalmente por los vehículos a motor terrestres. El transporte público en autobuses es el principal medio de movilidad en las ciudades latinoamericanas, en algunos casos superior al 50% del reparto modal. Este estudio evalúa la factibilidad de implementar sistemas de transporte público bajo en emisiones o con tendencia a emisiones cero, mediante el costo comparativo de implementar flotas de autobuses de diferentes tecnologías, incluido el precio social del carbono. Se desarrolla una herramienta que permite hacer una evaluación socioeconómica y financiera, comparando los costos totales de proyectos de transporte público con autobuses bajos en carbono. Se considera la información básica de siete tipos de autobuses de 12 metros con tecnologías diésel (Euro IV, V y VI), GNC, híbrida (Euro VI), eléctrica de baterías y eléctrica de carga de oportunidad (OppCharge). Se realizan simulaciones considerando escenarios con diversos precios (entre 5 y 50 dólares) por tonelada de carbono para evaluar los cambios en los costos anuales equivalentes de las diferentes alternativas de flotas de autobuses.
    Date: 2022–09–01
  27. By: Mireille Chiroleu-Assouline (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: Reprendre en France la trajectoire de la taxe carbone suppose de surmonter les nombreux obstacles à son acceptation par la population. Cet article recense d'abord les arguments propres à convaincre le public de l'efficacité de la tarification du carbone pour réduire les émissions. Puis, sur la base de la littérature et à la lumière d'expériences internationales, il expose des propositions de mesures d'accompagnement propres à combattre les effets potentiellement défavorables sur l'emploi, à traiter les questions d'équité, à répondre au besoin de justice sociale, et à permettre de restaurer la confiance politique indispensable à l'acceptation de politiques climatiques efficaces.
    Keywords: Politique climatique – Taxe carbone – Contribution climat-énergie – Acceptabilité – Inégalités
    Date: 2022–08
  28. By: Anwesha Banerjee; Stefano Barbieri; Kai A. Konrad
    Abstract: Global systematic economic shocks may affect the Nash equilibrium contributions to international climate mitigation. We study how this effect depends on the flexibility countries have to adjust to these shocks. The kind of rigidities countries face because of technological irreversibilities plays a crucial role. Under the plausible assumption of “prudence,†higher global uncertainty tends to reduce equilibrium climate contributions if irreversibilities in the level of climate policy choices exist. And, if countries are committed to allocating a proportion of income to climate protection, rigidities may increase welfare. Thus, exercising the option to perfectly adjust oneís contributions to shocks may be another form of free riding.
    Keywords: Global Warming, Climate Protection, Irreversibilities Climate Policy, Global Income Shocks, International Public Goods, Option Value
    JEL: Q54 H41 Q55
    Date: 2022–06
  29. By: Pica, Andrés; Arriagada, Javier; Rivera, Antonia; Martínez, Vicente
    Abstract: El precio social del carbono es un instrumento de política con el que es posible incidir, a través de decisiones de inversión pública, en el estilo de desarrollo de los países. En este estudio se propone una metodología y una herramienta para el cálculo de las emisiones de gases de efecto invernadero en el ciclo de vida de diferentes proyectos de transporte interurbano de pasajeros y de carga, planteando proyectos representativos de ampliación de carreteras, ferroviarios, de aviación y de dirigibles. Esta metodología podría aplicarse a otros países no incluidos en este estudio con relativa facilidad. Se lleva a cabo un ejercicio de evaluación social simplificado, para proyectos genéricos, que permite analizar el impacto del uso de un precio social del carbono en las evaluaciones sociales de proyectos de ampliación de carreteras, ferroviarios y de aviación. Los resultados indican que, en los casos analizados, los proyectos de ferrocarril pueden ser una solución rentable socialmente y con beneficios respecto de las emisiones expresadas en dióxido de carbono equivalente (CO2e) para el transporte interurbano de carga y pasajeros. La alternativa tradicional de ampliar una carretera es una solución valida, pero menos beneficiosa en términos de evaluación social y emisiones de CO2e.
    Date: 2022–09–07
  30. By: Podestá, Andrea; Eirin, María Silvina; Contreras Lisperguer, Rubén; Salgado, René
    Abstract: En este documento se busca identificar y analizar políticas e instrumentos para el financiamiento de la inversión en las energías renovables, a fin de avanzar hacia una movilidad y conectividad urbana más limpia y sostenible, presentándose un análisis en cuatro países seleccionados: Argentina, Brasil, Colombia y México. La implementación de estas políticas e instrumentos podría constituir una importante estrategia de parte de los países de la región para enfrentar las dificultades estructurales que plantean los bajos niveles de inversión y productividad y la incertidumbre para el crecimiento económico producto de los efectos de la pandemia de enfermedad por coronavirus (COVID-19) y, más recientemente, del conflicto entre la Federación de Rusia y Ucrania.
    Date: 2022–08–26
  31. By: International Monetary Fund
    Abstract: This Technical Report discusses the results of applying the climate-focused module of the Public Investment Management Assessment (PIMA) to the United Kingdom (UK) in October 2021. The UK has some of the most ambitious climate mitigation targets in the world, requiring a strong role for public investment. The Climate-PIMA found that the UK has a relatively well-designed system to manage climate relevant public investment, but there is room to strengthen its institutional design and improve effectiveness. The application of the PIMA is covered in a separate companion report.
    Keywords: A. climate change framework; B. climate change objective; climate change governance framework; I. climate change; climate change risk priority area; Climate change; Public investment spending; Global
    Date: 2022–09–02
  32. By: International Monetary Fund
    Abstract: Austria is highly vulnerable to spillovers from the war in Ukraine given its high dependence on energy imports from Russia, deep integration into global value chains, and large banking exposures. After high growth in the first half of 2022, growth is projected to fall sharply through 2023 due to impact of the war and the related energy crisis. Over the medium term, annual growth is projected to stabilize around 1¾ percent. However, output will remain below the pre-crisis trend. Uncertainty is extraordinarily high with significant downside risks.
    Keywords: gas storage; staff appraisal; staff projection; gas reserve; HICP regulation; External sector statistics; Personal income tax; Inflation; Labor markets; Energy prices; Europe; Global
    Date: 2022–09–02
  33. By: International Monetary Fund
    Abstract: The economy fared relatively well during the pandemic, but the war in Ukraine is another major shock. The key vulnerabilities are Latvia’s significant reliance on imported gas from Russia until recently, the impact of high international energy prices on inflation and economic activity, and refugee inflows. Thus far, almost 33,000 refugees have entered Latvia. Parliamentary elections later this year may put pressure on the government budget.
    Keywords: government finance statistics yearbook; green transition goal; financial asset; supply bottleneck; wage-price spiral; government finance statistics database; price pressure; World Bank-International Monetary Fund mission; General government operation; Energy prices; Inflation; Income; Baltics; Global
    Date: 2022–08–23
  34. By: Viral V. Acharya; Timothy Johnson; Suresh Sundaresan; Tuomas Tomunen
    Abstract: We exploit regional variations in exposure to heat stress to study if physical climate risk is priced in municipal and corporate bonds as well as in equity markets. We find that local exposure to damages related to heat stress equaling 1% of GDP is associated with municipal bond yield spreads that are higher by around 15 basis points per annum (bps), the effect being larger for longer-term, revenue-only and lower-rated bonds, and arising mainly from the expected increase in energy expenditures and decrease in labor productivity. Among S&P 500 companies, one standard deviation increase in exposure to heat stress is associated with yield spreads that are higher by around 40 bps for sub-investment grade corporate bonds, with little effect for investment grade bond spreads, and with conditional expected returns on stocks that are higher by around 45 bps. These results are (i) observed robustly only starting in 2013–15, (ii) mostly absent for physical risks other than exposure to heat stress, and (iii) consistent with the class of macroeconomic models where climate change has a direct and large negative impact on aggregate consumption.
    JEL: G12 G32 Q54
    Date: 2022–09
  35. By: Schmidt, Klaus M. (LMU Munich); Ockenfels, Axel (University of Cologne)
    Abstract: International cooperation on the reduction of greenhouse gas emissions, disarmament, or free trade needs to be negotiated. The success of such negotiations depends on how they are designed. In the context of international climate change policy, it has been proposed [e.g., Weitzman J of the Association of Environmental and Resource Economists (2014)] that shifting the negotiation focus to a uniform common commitment (such as a uniform minimum carbon price) would lead to more ambitious cooperation. Yet, a proof-of-concept for this important claim is lacking. Based on game theoretical analyses, we present experimental evidence that strongly supports this conjecture. In our study, human subjects negotiate contributions to a public good. Subjects differ in their benefits and costs of cooperation. Participation in the negotiations and all commitments are voluntary. We consider treatments in which agreements are enforceable, and treatments in which they have to be self-enforcing. In both situations, negotiating a uniform common commitment is more successful in promoting cooperation than negotiating individual commitments (as in the Paris agreement) and complex common commitments that tailor the commitment to the specific situation of each party (as attempted with the Kyoto protocol). Furthermore, as suggested by our model, a uniform common commitment benefits most from being enforced.
    Keywords: cooperation; negotiation design; common commitment; reciprocity; climate policy;
    Date: 2021–01–04
  36. By: Grace Weishi Gu; Galina Hale
    Abstract: Climate-related risks have increased in recent decades, both in terms of the frequency of extreme weather events (physical risk) and implementation of climate-change mitigation policies (transition risk). This paper explores whether multinational firms react to such risks by altering their presence in countries that are more affected. We measure this by examining foreign direct investment (FDI) dynamics at different levels of aggregation as well as at firm level. We propose a theoretical framework for firm production location choice that explicitly incorporates transition and physical risks. The model predicts a reduction in FDI resulting from both physical and transition risks but an ambiguous interaction effect of these risks with emission productivity of the firm. In an extensive empirical analysis we find some support for model predictions, but overall we do not find consistent evidence for statistically significant effects of physical and transition risks on FDI. However, firm-level evidence suggests that firms that are more exposed to climate risks react more negatively to physical climate risk following Paris Climate Accord. We also find that FDI outflows following extreme weather events from affected countries are smaller for industries with higher emission productivity. Our theory and empirical results point to the importance of accounting for heterogeneity in emission productivity when analyzing effects of climate risks.
    JEL: F21 F23 F64
    Date: 2022–09
  37. By: Jacobus Nel (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa); Rangan Gupta (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa); Mark E. Wohar (College of Business Administration, University of Nebraska at Omaha, 6708 Pine Street, Omaha, NE 68182, USA); Christian Pierdzioch (Department of Economics, Helmut Schmidt University, Holstenhofweg 85, P.O.B. 700822, 22008 Hamburg, Germany)
    Abstract: We analyze whether metrics of climate risks, as captured primarily by changes in temperature anomaly and its stochastic volatility, can predict returns and volatility of 25 commodities, covering the overall historical period of 1258 to 2021. To this end, we apply a higher-order nonparametric causality-in-quantiles test to not only uncover potential predictability in the entire conditional distribution of commodity returns and volatility, but also to account for nonlinearity and structural breaks which exist between commodity returns and the metrics of climate risks. We find that, unlike in the misspecified linear Granger causality tests, climate risks do predict commodity returns and volatility, though the impact on the latter is stronger, in terms of the coverage of the conditional distribution. Insights from our findings can benefit academics, investors, and policymakers in their decision-making.
    Keywords: Climate risks, Commodities, Returns and volatility predictions, Higher-order nonparametric causality-in-quantiles test
    JEL: C22 C53 Q02 Q54
    Date: 2022–09
  38. By: Schmidt, Klaus M. (LMU Munich)
    Abstract: In seiner Thünen-Vorlesung vor dem Verein für Socialpolitik im Herbst 2020 hat Klaus Schmidt das Design von Klimaschutzverhandlungen untersucht. Er geht dabei von einem Vorschlag Martin Weitzmans aus, künftige Verhandlungen auf einen einheitlichen CO2-Mindestpreis zu fokussieren. Wäre ein solches Vorgehen demjenigen, wie es in den Abkommen von Paris und Kyoto praktiziert wurde, tatsächlich überlegen? Schmidt berichtet von zwei experimentellen Studien, in denen er gemeinsam mit Koautoren Licht auf diese Frage geworfen hat. Die Ergebnisse beider Studien unterstützen den Vorschlag von Weitzman.
    Keywords: Klimaschutzverhandlungen; Verhandlungsdesign; Reziprozität; CO2-Preis;
    JEL: C81 C93 F51 H87 Q54
    Date: 2021–01–19
  39. By: Elie Bouri (School of Business, Lebanese American University, Beirut, Lebanon); Rangan Gupta (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa); Hardik A. Marfatia (Department of Economics, Northeastern Illinois University, BBH 344G, 5500 N. St. Louis Avenue, Chicago, IL 60625, USA); Jacobus Nel (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa)
    Abstract: We analyse the ability of textual-analysis-based daily proxies of physical (natural disasters and global warming) and transition (US climate policy and international summits) climate risks to predict daily movements in the US housing market over the period 2nd August, 2007 to 29th November, 2019. To this end, we apply a nonparametric causality-in-quantiles test not only to uncover potential predictability in the entire conditional distribution of housing returns and volatility but also to account for nonlinearity and structural breaks which exist between housing returns and climate risk factors. We find that climate risk factors (and the associated uncertainty) do predict housing returns and volatility across the conditional distribution. These results are robust to alternative daily data of aggregate housing prices for the US and ten major metropolitan statistical areas (MSAs). Insights from our findings can benefit academics, investors, and policymakers in their decision-making.
    Keywords: Physical and transitional climate risks, US housing returns and volatility, higher-order nonparametric causality-in-quantiles test, natural disasters and global warming, US climate policy and international summits
    JEL: C22 C32 Q54 R30
    Date: 2022–09
  40. By: Pomogaev, Vitalii
    Abstract: Scientific and experimental data, mathematical modeling of climate change confirm the inevitability of warming as a result of anthropogenic impact. Agriculture, and especially crop production, is the most sensitive to climate change, in connection with which the world-famous practices for preventing and combating the effects of climate change in agriculture have become actively used in Russia: mitigation, adaptation and food monitoring. At the same time, agriculture is both a global sink and the world's third largest emitter of CO2. All together, this gives rise to a new trend in agriculture – climate-optimized agriculture (the UN version of the name). One of the tools for its implementation are climate projects based on geoengineering technologies. Of all the known methods of geoengineering, the most attractive are those related to natural technologies: based on photosynthesis and carbon storage tanks in the form of soil and biomass. In the Altai Territory in recent decades, there has been an increase in the temperature of the warm season, which is not compensated by an increase in precipitation, which leads to the desiccation of the territory. Arable land is being reduced and the proportion of fallow land (including degraded) is increasing. There is a reduction in the forests of the Forestry of the region. When planning climate projects, it is necessary to take into account two biogeochemical climate-regulating factors of terrestrial ecosystems in the region: 1) the rate of removal of carbon from the atmosphere; 2) reserves and stability of deposited carbon derived from the biogeochemical cycle. To do this, it is recommended to conduct full-scale experiments on the territory where it is breaded before the start of the climate project. The total cost of carbon sequestration by the ecosystems of the region amounted to 2782.7 million rubles, and the potential of the territories of the region is very unequal. This should be taken into account when planning climate projects in the region. It is advisable at the regional level to have a decarbonization strategy for agriculture (including subsidiary support measures) that takes into account the prospects for changing natural and climatic conditions. It is extremely important to develop a system of measures to train industry workers in both low-carbon farming methods and new rules for the functioning of the economy in conditions of adaptation to climate change and the maintenance of "green" standards.
    Keywords: Mitigation, adaptation, food monitoring, food security, climate change, geoengineering, agriculture, carbon market, nature-like technologies, carbon landfill, carbon farm.
    JEL: Q51 Q52 Q54 Q55 Q56 Q57 Q58
    Date: 2021–11–18
  41. By: Mr. Marcos d Chamon; Mr. Vimal V Thakoor; Erik Klok; Mr. Jeromin Zettelmeyer
    Abstract: This paper compares debt-for-climate swaps—partial debt relief operations conditional on debtor commitments to undertake climate-related investments—to alternative fiscal support instruments. Because some of the benefits of debt-climate swaps accrue to non-participating creditors, they are generally less efficient forms of support than conditional grants and/or broad debt restructuring (which could be linked to climate adaptation when the latter significantly reduces credit risk). This said, debt-climate swaps could be superior to conditional grants when they can be structured in a way that makes the climate commitment de facto senior to debt service; and they could be superior to comprehensive debt restructuring in narrow settings, when the latter is expected to produce large economic dislocations and the debt-climate swap is expected to materially reduce debt risks (and achieve debt sustainability). Furthermore, debt-climate swaps could be useful to expand fiscal space for climate investment when grants or more comprehensive debt relief are just not on the table. The paper explores policy actions that would benefit both debt-climate swaps and other forms of climate finance, including developing markets for debt instruments linked to climate performance.
    Keywords: Debt-for-climate swaps; climate mitigation; climate adaptation; climate finance; fiscal space; debt; NDCs; climate swap; debt risk; Debt-Climate swap; IMF working papers; climate investment; Debt conversion; Debt relief; Debt restructuring; Debt service; Global; debt swap operation; trilateral debt swaps; financial support; debt relief debt swap
    Date: 2022–08–12
  42. By: Francesco Caloia; David-Jan Jansen; Remco van der Molen; Lu Zhang; Helga Koo
    Abstract: Real estate plays an important role in debates on the transition to a carbon-neutral economy. Based on detailed real-estate data and climate scenario analysis, this study analyzes climate transition risks in real estate and their impact on Dutch financial institutions. First, for a substantial part of the real estate exposure, transition risk may already materialize before 2030. Second, a significant share of homeowners may face financing constraints, which would increase credit risks. Third, stricter standards may impair asset values, which would mean significant financial losses for investors. Such climate financial risks underline the importance of an orderly and, therefore, timely transition to carbon neutrality.
    Date: 2022–02
  43. By: Hofmann, Elisa (University of Jena); Kyriacou, Lucas (University of Bern); Schmidt, Klaus M. (LMU Munich)
    Abstract: Weitzman (2014) proposed that focusing international climate negotiations on a uniform carbon price is more effective than Paris style negotiations in achieving ambitious climate action. We put this hypothesis to an experimental test by simulating international negotiations on climate change in collaboration with Model United Nations associations. This novel experimental format combines some of the advantages of lab and field experiments. Our results show that negotiating a common commitment on a uniform carbon price yields significantly higher emissions reductions, more participation, and more equal contributions than individual commitments to a non-binding common goal à la Paris.
    Keywords: climate negotiations; negotiation design; model United Nations; uniform carbon price;
    JEL: C81 C93 F51 H87 Q54
    Date: 2021–01–04
  44. By: Leonardo Becchetti; Sara Mancini; Sara Savastano
  45. By: Clarissa Caimol (University of Ferrara – Department of Economics and Management (Ferrara, Italy);)
    Abstract: The importance of local stakeholders in the regional governments regarding climate change policies has received a deeper attention during the last years, especially include adaptation policies. The achievement of the European targets is the implementation of both mitigation and adaptation policies by providing multiple funds from European to sub-national level. The directives to combat the issues of climate heating system come from the international level to the regional one. However, European regions require a higher level of adaptation than mitigation commitments due to the vulnerability of the territories. This paper applies a network perspective in the Emilia Romagna region to map the level of climate commitment in the local stakeholders’ involvement. These local actors have been clustered to facilitate the investigation in order to uncover the way specific stakeholders has relevant impact on climate change issues. A particular consideration has been given to the degree of participation in adaptation policies
    Keywords: climate change, adaptation, local stakeholders, social network analysis, regional policy
    Date: 2022–09
  46. By: Ms. Hiroko Oura; Mr. Fabian Lipinsky; Stephane Hallegatte; Paola Morales; Nicola Ranger; Martijn Gert Jan Regelink; Henk Jan Reinders
    Abstract: Bank stress tests of climate change risks are relatively new, but are rapidly proliferating. The IMF and World Bank staff collaborated to develop an experimental macro scenario stress testing approach to examine physical risks for banks by building a dynamic stochastic general equilibrium model linked to global climate and a catastrophe risk model specifically for the Philippines. Our model shows that the impact of extremely rare typhoons on GDP could already be systemic and worsen substantially with climate change. However, bank capital declines only modestly unless the event is compounded with other disasters, partly thanks to the strength of Philippines’ banks and economy before the COVID crisis. However, more work is needed before drawing strong conclusions about the relevance of climate risk, as the model focused only on typhoons’ physical capital destructions and their macroeconomic-level transmissions to banks.
    Keywords: Climate change; bank; stress test; financial stability; CAT model; disasters; bank stress testing; bank stress tests; climate change macro scenario; annex I. macro scenario model; climate change stress test; Natural disasters; Stress testing; Financial sector stability; Global; climate scenario; climate model; physical capital; simulation result
    Date: 2022–08–19
  47. By: Raouf Boucekkine (ESC Rennes School of Business - ESC [Rennes] - ESC Rennes School of Business); Carmen Camacho (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Weihua Ruan (Purdue University Northwest); Benteng Zou (University of Luxembourg [Luxembourg])
    Abstract: We consider a group of players initially members of a coalition managing cooperatively a public bad, in this case, the stock of pollution. Countries are technologically heterogeneous but the pollution damage is uniform. We essentially attempt to characterize the conditions under which a country may eventually split and when it splits within an infinite horizon multi-stage differential game. In contrast to the existing literature, we do not assume that after splitting, the splitting player and the remaining coalition will adopt Markovian strategies. Instead, we assume that the latter will remain committed to the collective control of pollution and play open-loop, while the splitting player plays Markovian. Within a full linear-quadratic model, we characterize the optimal strategies. We later compare with the outcomes of the case where the splitting player and the "remaining" coalition play both Markovian. We highlight several interesting results in terms of the implications for longterm pollution levels and the duration of coalitions with heterogenous strategies.
    Keywords: Coalition splitting,environmental agreements,differential games,multistage optimal control,precommitment vs Markovian
    Date: 2022–09
  48. By: Sayar Karmakar (Department of Statistics, University of Florida, 230 Newell Drive, Gainesville, FL, 32601, USA); Rangan Gupta (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa); Oguzhan Cepni (Copenhagen Business School, Department of Economics, Porcel16A, Frederiksberg DK-2000, Denmark; Central Bank of the Republic of Turkey, Haci Bayram Mah. Istiklal Cad. No:10 06050, Ankara, Turkey); Lavinia Rognone (Alliance Manchester Business School, The University of Manchester, Booth St W, Manchester M15 6PB, UK)
    Abstract: We investigate the ability of textual analysis-based metrics of physical or transition risks associated with climate change in forecasting the daily volume of trade contracts of gold. Given the count-valued nature of gold volume data, our econometric framework is a loglinear Poisson integer-valued generalized autoregressive conditional heteroskedasticity (INGARCH) model with a particular climate change-related covariate. We detect a significant predictive power for gold volume at 5- and 22-day-ahead horizons when we extend our model using physical risks. Given the underlying positively evolving impact of such risks on the trading volume of gold, as derived from a full-sample analysis using a time-varying INGARCH model, we can say that gold acts as a hedge against physical risks at 1-week and 1-month horizons. Such a characteristic is also detected for platinum, and to a lesser extent, for palladium, but not silver. Our results have important investment implications.
    Keywords: Climate Risks, Precious Metals, Forecasting, Trading Volumes, Count Data, INGARCH
    JEL: C22 C53 Q02 Q54
    Date: 2022–09
  49. By: Javier Amores‐salvadó (UCM - Universidad Complutense de Madrid = Complutense University of Madrid [Madrid]); Gregorio Martin‐de Castro (UCM - Universidad Complutense de Madrid = Complutense University of Madrid [Madrid]); Elisabeth Albertini (IAE Paris - Sorbonne Business School, UP1 - Université Paris 1 Panthéon-Sorbonne)
    Abstract: In recent years, corporate environmental commitment is showing different postures going from greenwashing to undue modesty and from environmental excellence to environmental inaction. In this paper, we go a step beyond the most recent research work on the dichotomy greenwashing-brownwashing and develop a more comprehensive model that reflect more subtly four main corporate environmental strategic positions based on both firm's environmental performance and disclosure achievements. Jointly with their characterization, and adopting a question-driven approach we add to the literature on environmental disclosure-firm performance proposing an explorative research question that consider cluster membership on market firm performance under the general assumption that, at least theoretically, each of the four main corporate environmental strategic positions under analysis can result in market performance improvements. Our empirical results from a panel data of international industrial companies show very interesting and novel insights, highlighting the fact that being green is good, but above all, it is good to look green.
    Keywords: brownwashing,environmental disclosure,environmental performance,greenwashing,market performance,panel data,question-driven approach,stakeholder engagement
    Date: 2022
  50. By: Dangel, Alexander; Goeschl, Timo
    Abstract: We study an air quality alert program that informs the public of high ambient air pollution levels and broadcasts a Don't Drive Appeal (DDA) to encourage motorists not to drive on poor air quality days. We use fixed effects panel models and a rigorous sub-sampling method to analyze 28 months of traffic data from Stuttgart, Germany and evaluate whether DDAs reduce driving. We find DDAs inadvertently increase driving by up to 2% in Greater Stuttgart. This overall effect is driven by heightened weekend and periphery traffic during DDAs. Notably, DDAs successfully reduce city center traffic on some weekdays and for the first five days of DDA events. However, estimated traffic reductions never exceed 5% of daily traffic flows, suggesting that high switching costs and dynamic norm factors may deter most motorists from choosing the DDA's desired response. These results provide cautionary evidence about implementing DDAs to reduce driving.
    Keywords: information-based regulation; voluntary policies; air quality alerts; prosocial behavior; transportation choice
    Date: 2022–09–16
  51. By: Ram Mohan, M.P.; Kini, Els Reynaers; Prasad, Sriram
    Abstract: This paper explores how the long-standing tradition of common law countries such as India, which have acknowledged the fundamental right to a healthy and pollution free life for many decades, can assist Judges in other jurisdictions and inform global climate governance. More specifically, many other common law and civil law jurisdictions are faced for the first time with having to interpret and assess whether there is a fundamental right to a healthy and pollution free environment. This question forces them to review whether state inaction on climate change infringes this fundamental right. This paper examines how Indian courts have adjudicated environment and climate litigation. We further scrutinize the classification of cases as climate litigation in the Indian context to try and truly unearth Indian jurisprudence on environment and climate protection. The paper also examines the trends observable and the way forward for environment and climate litigation in India. We compare the four human rights based climate litigations before the European Court of Human Rights with Indian jurisprudence to understand transnational climate litigation better.
    Date: 2022–09–20
  52. By: Abhyankar, Nikit; Lin, Jiang; Kahrl, Fredrich; Yin, Shengfei; Paliwal, Umed; Liu, Xu; Khanna, Nina; Phadke, Amol A; Luo, Qian
    Abstract: Dramatic reductions in solar, wind, and battery storage costs create new opportunities to reduce emissions and costs in China’s electricity sector, beyond current policy goals. This study examines the cost, reliability, emissions, public health, and employment implications of increasing the share of non-fossil fuel (“carbon free”) electricity generation in China to 80% by 2035. The analysis uses state-of-the-art modeling with high resolution load, wind, and solar inputs. The study finds that achieving an 80% carbon free electricity system in China by 2035 could reduce wholesale electricity costs, relative to a current policy baseline, while maintaining high levels of reliability, reducing deaths from air pollution, and increasing employment. In our 80% scenario, wind and solar generation capacity reach 3 TW and battery storage capacity reaches 0.4 TW by 2035, implying a rapid scale up in these resources that will require changes in policy targets, markets and regulation, and land use policies.
    Date: 2022–09–22
  53. By: Jonas Hveding Hamang
    Abstract: In this paper I use data on the location of all historic petroleum discoveries onshore to establish a new stylized fact: Economically developed areas are significantly more likely (about five percentage points) to contain an oil discovery, compared to undeveloped areas. This result is robust to accounting for reverse causality, confounding geology and observed or unobserved country characteristics. By implication, there are large underexplored oil and gas deposits in currently undeveloped areas. I calculate these deposits to be approximately 600 billion barrels of oil — amounting to about 50% of the globe’s currently known onshore endowment — and to be mainly located outside of Europe and North America. Exploring alternative mechanisms, I find that infrastructure access may explain the documented discovery differential.
    Date: 2022–09
  54. By: Mertens, Matthias; Müller, Steffen; Neuschäffer, Georg
    Abstract: We present causal evidence on the rent-sharing elasticity of German manufacturing firms. We develop a new firm-level Bartik instrument for firm rents that combines the firms' predetermined energy input mix with national energy carrier price changes. Reduced-form evidence shows that higher energy prices depress wages. Instrumental variable estimation yields a rent-sharing elasticity of approximately 0.20. Rent-sharing induced by energy price variation is asymmetric and driven by energy price increases, implying that workers do not benefit from energy price reductions but are harmed by price increases. The rent-sharing elasticity is substantially larger in small (0.26) than in large (0.17) firms.
    Keywords: Bartik instrument,energy prices,rent-sharing,wage inequality
    JEL: C26 J30 P18
    Date: 2022
  55. By: Olatunji A. Shobande (Teesside University, UK); Simplice A. Asongu (Yaoundé, Cameroon)
    Abstract: Generally, the revolutionary idea behind using information and communication technology (ICT) has improved potential productivity in many industries, particularly in Africa. ICT is an essential tool in the oil and gas industry and plays a complementary role in technological dynamics and cross-sectoral productivity. For the educational sector, ICT facilitates research and development as well as in imparting knowledge. ICT remains the password to essential inputs required for any given output in terms of improved productivity and economic development. With regard to employment creation, ICT accounts for more than 50% of employment globally. Despite the significant role of ICT in the economy, evidence shows that more than 90% of carbon emissions have been linked to ICT production, installation, and usage. This study aims to determine whether ICT causes environmental sustainability in Nigeria and South Africa. The methodological contribution of the study lies in combining the STIRPAT framework and time series based on the VAR/VEC Granger causality, enabling the study to uncouple the dynamic interaction among environmental sustainability indicators. The findings show that ICT has contributed to South Africa's environmental sustainability, whereas evidence in Nigeria is relatively mixed. Therefore, the study recommends the urgent need to provide intervention programs tailored toward investing in environmental infrastructure to mitigate the threat of climate change in Nigeria.
    Keywords: CO2 emissions; ICT; Economic development; Sub-Saharan Africa
    JEL: C52 O38 O40 O55 P37
    Date: 2022–01
  56. By: De Jesús, Indhira
    Abstract: The city of Belmopan, built away from the coast during the second half of the twentieth century to ensure continuity of government functions even after severe storms, is an early example of climate adaptation. In the past 20 years, the city’s fast population growth, driven mostly by immigration, has strained services and infrastructure. Belmopan —the “garden city”— has ample green spaces and an overall negative carbon footprint, but faces challenges posed by climate change. The Climate action guidelines 2022–2030 respond to the need to address those challenges while contributing to Belize’s overall ambition, expressed in its nationally determined contribution (NDC). The guidelines aim to reduce Belmopan´s emissions, mainly by expanding green areas and forestation, promoting non-vehicular transportation and improving waste management. Adaptation will involve improving the city’s stormwater management system, prioritizing nature-based solutions, conducting risk assessments and enforcing zoning regulations to reduce population vulnerability. Implementing these guidelines will require the city to improve capacities at City Hall, revise regulations and create citizen awareness and engagement programmes.
    Date: 2022–08–29
  57. By: Biqing Zhu; Xuanren Song; Zhu Deng; Wenli Zhao; Da Huo; Taochun Sun; Piyu Ke; Duo Cui; Chenxi Lu; Haiwang Zhong; Chaopeng Hong; Jian Qiu; Steven J. Davis; Pierre Gentine; Philippe Ciais; Zhu Liu
    Abstract: We constructed a frequently updated, near-real-time global power generation dataset: Carbon Monitor-Power since January, 2016 at national levels with near-global coverage and hourly-to-daily time resolution. The data presented here are collected from 37 countries across all continents for eight source groups, including three types of fossil sources (coal, gas, and oil), nuclear energy and four groups of renewable energy sources (solar energy, wind energy, hydro energy and other renewables including biomass, geothermal, etc.). The global near-real-time power dataset shows the dynamics of the global power system, including its hourly, daily, weekly and seasonal patterns as influenced by daily periodical activities, weekends, seasonal cycles, regular and irregular events (i.e., holidays) and extreme events (i.e., the COVID-19 pandemic). The Carbon Monitor-Power dataset reveals that the COVID-19 pandemic caused strong disruptions in some countries (i.e., China and India), leading to a temporary or long-lasting shift to low carbon intensity, while it had only little impact in some other countries (i.e., Australia). This dataset offers a large range of opportunities for power-related scientific research and policy-making.
    Date: 2022–09
  58. By: Kai A. Konrad; Raisa Sherif
    Abstract: Climate experts delegated by countries to COP 24 and COP 25 show much agreement on international energy policy measures in the context of climate protection. Experts on average also agree with the proposal of compensating countries with large oil and gas reserves for not extracting them. But experts are more likely to agree with the proposed policy when they believe that their countries are reliant on oil and gas revenues, and hence potential recipients of the compensation.
    Keywords: Hydrocarbons Climate Change Energy Transition UN Climate Change Conference Climate Policy Compensation Payments Natural Gas Oil Reserves
    JEL: Q54 Q35 Q38
    Date: 2022–05
  59. By: Juan Benavides; Sergio Cabrales; Martha E. Delgado-Rojas
    Abstract: La transición de Colombia debe envolver tecnologías limpias rentables, aumentar el consumo de energía por habitante, adoptar una política de portafolio para desarrollar sus recursos energéticos, proclamar una política de apoyo al desarrollo del gas natural por las dos décadas siguientes, no deteriorar la capacidad productiva de las nuevas adiciones en capital en manufactura y equipos con tecnologías distantes de la frontera comercial en el lado de la demanda, no desmantelar activos que provean servicios esenciales y cuyo reemplazo sería muy costoso por unidad de GEI removida. Además, debe aumentar el fondeo para investigación y desarrollo en energía, estructurar fondos de financiación combinada, innovar en modelos de negocios y de atención de zonas no interconectadas, impulsar el aprovechamiento de la biomasa residual en los entornos rurales, y prepararse para la transición justa en regiones productoras de carbón térmico.******Abstract: Colombia's transition must involve profitable clean technologies, increase energy consumption per inhabitant, adopt a portfolio policy to develop its energy resources, proclaim a policy of support for the development of natural gas for the next two decades, and do not deteriorate the productive capacity of new capital additions in manufacturing and equipment with technologies distant from the commercial frontier on the demand side, do not dismantling assets that provide essential services and whose replacement would be very costly per unit of GHG removed. In addition, it must increase funding for research and development in energy, structure combined financing funds, innovate in business models and care for non-interconnected areas, promote the use of residual biomass in rural environments, and prepare for the just transition in thermal coal producing regions.
    Keywords: Transición Energética, Carbono - Neutralidad, Gas Natural, Consumo de Energía, Descarbonización Acelerada, Energy Transition, Carbon - Neutrality, Gas, Energy Consumption, Accelerating Decarbonization
    JEL: L71 Q35 Q42 Q48
    Date: 2022–08–26
  60. By: Nissa Amilia; Zulkifli Palinrungi; Iwan Vanany; Mansur Arief
    Abstract: The rapid development of electric vehicle (EV) technologies promises cleaner air and more efficient transportation systems, especially for polluted and congested urban areas. To capitalize on this potential, the Indonesian government has appointed PLN, its largest state-owned electricity provider, to accelerate the preparation of Indonesia's EV infrastructure. With a mission of providing reliable, accessible, and cost-effective EV charging station infrastructure throughout the country, the company is prototyping a location-optimized model to simulate how well its infrastructure design reaches customers, fulfills demands, and generates revenue. In this work, we study how PLN could maximize profit by optimally placing EV charging stations in urban areas by adopting a maximal covering location model. In our experiments, we use data from Surabaya, Indonesia, and consider the two main transportation modes for the locals to charge: electric motorcycles and electric cars. Numerical experiments show that only four charging stations are needed to cover the whole city, given the charging technology that PLN has acquired. However, consumers' time-to-travel is exceptionally high (about 35 minutes), which could lead to poor consumer service and hindrance toward EV technologies. Sensitivity analysis reveals that building more charging stations could reduce the time but comes with higher costs due to extra facility installations. Adding layers of redundancy to buffer against outages or other disruptions also incurs higher costs but could be an appealing option to design a more reliable and thriving EV infrastructure. The model can provide insights to decision-makers to devise the most reliable and cost-effective infrastructure designs to support the deployment of electric vehicles and much more advanced intelligent transportation systems in the near future.
    Date: 2022–09
  61. By: Li, T.; Gao, C.; Pollitt, M.; Chen, T.; Ming H.
    Abstract: The paper uses a social cost benefit analysis (SCBA) approach to measure the effects of the power system reform starting from 2015 in Jiangsu province, China. We review the background of Jiangsu power system and summarize the implemented policies since the publication of “Document #9†. Then we pick the average industrial and commercial retail price and analyse the sources of price reductions. We show that the nominal industrial and commercial price fell by 21.3% between January 2012 and May 2021. We then analyse the likely overall welfare change facing industrial and commercial customers using SCBA and conclude that there is a permanent gain equivalent to 9.1% lower prices per year mainly because of the reform. This figure is a significantly more positive consumer gain than that calculated in previous SCBAs of electricity reform in other countries.
    Keywords: Power system reform (PSR), social cost benefit analysis (SCBA), electricity market, industrial and commercial electricity price
    JEL: L94
    Date: 2022–09–13
  62. By: Eric Jondeau; Grégory Levieuge; Jean-Guillaume Sahuc; Gauthier Vermandel
    Abstract: We explore the role of public subsidies in mitigating the transition risk associated with a climate-neutral objective by 2060. We develop and estimate an environmental dynamic stochastic general equilibrium model for the world economy featuring an endogenous market structure for green products. We show that public subsidies, financed by a carbon tax, are an efficient instrument to promote firm entry into the abatement goods sector by fostering competition and lowering the selling price of such products. We estimate that the subsidy, optimally distributed between startups at 60% and existing companies at 40%, will save nearly $2.9 trillion in world GDP each year by 2060.
    Keywords: Climate change, E-DSGE model, Bayesian estimation, stochastic growth, endogenous market structure, environment-related products
    JEL: E32 H23 Q50 Q55 Q58
    Date: 2022
  63. By: Claudia Custodio; Miguel A. Ferreira; Emilia Garcia-Appendini; Adrian Lam
    Abstract: We estimate the economic impact of climate change by exploiting variation in local temperature across suppliers of the same client. We find that suppliers experiencing a 1°C increase in average daily temperature decrease their sales by 2%. The effect is more pronounced among suppliers in manufacturing and heat-sensitive industries, which is consistent with lower labor productivity and supply when temperatures are higher. Financially constrained suppliers are more affected due to their lack of financial flexibility to adapt to changes in temperatures. We also find that episodes of extremely hot and cold weather lead to large drops in sales.
    Keywords: Climate change, Climate finance, Economic costs, Firm sales, Production networks, Productivity, Financial constraints
    JEL: G31 G32 L11 L14 Q54
    Date: 2022
  64. By: Xolani Sibande (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa); Riza Demirer (Department of Economics and Finance, Southern Illinois University Edwardsville, Edwardsville, IL 62026-1102, USA); Rangan Gupta (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa)
    Abstract: This paper examines the effect of crypto-currency mining activities on fossil fuel price dynamics, focusing on the coal market. Specifically, we utilise static and time-varying Granger causality tests to explore the causal linkages between Bitcoin electricity consumption and coal prices captured by the Argus/McCloskey's Coal Price Index for coal imported into northwest Europe. The results unsurprisingly reveal a time-varying causal link from the coal price to Bitcoin mining activities' electricity consumption. That is, the coal price is a constraint on mining activities. Surprisingly the evidence in the opposite direction is stronger, suggesting that electricity consumption from Bitcoin mining activities impacts the coal price. This interplay suggests that electricity consumption from Bitcoin mining activities may be larger than current estimates.
    Keywords: Time-varying Granger causality, Crypo-currency market, Commodity Markets, Coal price
    JEL: C12 C32 C58 G14 Q02
    Date: 2022–09
  65. By: Salman Haider (CDE and IEG, Delhi)
    Abstract: This study aims at analysing the determinant of cooking fuel expense at household level in Uttar Pradesh (UP). For this purpose, panel data from CPHS (CMIE) and the household fixed effect model have been used. As clean cooking fuel demands larger expenditure, it is expected that higher expenses on cooking fuel represent transition to clean cooking fuel. Cooking fuel expenses show positive elasticity with respect to per capita income. However, this elasticity is lower for the higher income (consumption) group than for the bottom income group. Looking at the caste angle, schedule tribe (STs) spend less while the general caste and schedule castes (SCs) spend more as compared to the other backward castes (OBCs). Households with less educational attainments show lower spending on cooking fuel, while households with better electricity access unravel a higher propensity. This suggests positive spill-over effects of modern energy services on clean cooking fuel. Finally, the present study has implications for designing policies to penetrate LPG as cooking fuel.
    Keywords: Cooking fuel expenditure, Energy cost burden, Sustainable development, India, Survey analysis.
    Date: 2022–07–01

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