nep-ene New Economics Papers
on Energy Economics
Issue of 2022‒11‒28
58 papers chosen by
Roger Fouquet
London School of Economics

  1. The Health Benefits of Solar Power Generation: Evidence from Chile By Nathaly Rivera; Elisheba Spiller; J. Cristobal Ruiz-Tagle
  2. Looking ahead to COP27—from climate pledges to action: The Global Methane Pledge—opportunities and risks By Etienne Romsom; Kathryn McPhail
  3. Carbon Emissions Trading and Environmental Protection: International Evidence By Jennie Bai; Hong Ru
  4. Can Bitcoin Mining Increase Renewable Electricity Capacity? By August Bruno; Paige Weber; Andrew J. Yates
  5. Working Paper 08-21 - Bon vent: setting sail for a climate neutral Belgian energy system – Future Belgian offshore wind unravelled By Danielle Devogelaer; Dominique Gusbin
  6. Do manufacturing plants respond to exogenous changes in electricity prices? Evidence from administrative micro-data By von Graevenitz, Kathrine; Rottner, Elisa
  7. Moving transport to net zero: What it takes to decarbonise the global transport sector By Wang-Helmreich, Hanna; Obergassel, Wolfgang; Lah, Oliver
  8. EU carbon border adjustment mechanism faces many challenges By Gary Clyde Hufbauer; Jeffrey J. Schott; Megan Hogan; Jisun Kim
  9. Supporting the Era of Green Pharmaceuticals in the UK By Firth, I.; Hitch, J.; Henderson, N.; Cookson, C.
  10. The Political Economy of South Africa’s Carbon Tax By Baker, Lucy
  11. The Role of Institutions on the Global Economy-Emissions Nexus By Alanda Venter; Roula Inglesi-Lotz
  12. Lessons from the EU effort sharing decision for supranational climate cooperation: A firm-level analysis By Gavarda, Claire; Diethelm, Lukas
  13. U.S Electric Utility Adaptation to Natural Disasters Shocks and Green Power Mandates By Robert Huang; Matthew E. Kahn
  14. The portfolio of economic policies needed to fight climate change By Olivier J Blanchard; Christian Gollier; Jean Tirole
  15. The determinants of crude oil prices: Evidence from ARDL, and nonlinear ARSL approaches By Leila BEN SALEM; Ridha NOUIRA; KHALED JEGUIRIM; Christophe RAULT
  16. Do Lenders Price the Brown Factor in Car Loans? Evidence from Diesel Cars By Winta Beyene; Matteo Falagiarda; Steven Ongena; Alessandro Scopelliti
  17. Carbon Monitor Europe, near-real-time daily CO$_2$ emissions for 27 EU countries and the United Kingdom By Piyu Ke; Zhu Deng; Biqing Zhu; Bo Zheng; Yilong Wang; Olivier Boucher; Simon Ben Arous; Chuanlong Zhou; Xinyu Dou; Taochun Sun; Zhao Li; Feifan Yan; Duo Cui; Yifan Hu; Da Huo; Jean Pierre; Richard Engelen; Steven J. Davis; Philippe Ciais; Zhu Liu
  18. A proposal for a decarbonization tax discount to increase Australian lithium production to meet electric vehicles and net zero global targets By Smyth, Russell; Vespignani, Joaquin
  19. Climate Policies, Macroprudential Regulation, and the Welfare Cost of Business Cycles By Barbara Annicchiarico; Marco Carli; Francesca Diluiso
  20. Green Transformation in Oligopoly Markets under Common Ownership By Hirose, Kosuke; Matsumura, Toshihiro
  21. The EU-CEAP impacts on developing countries: An analysis of the plastic packaging, electric vehicles and batteries sectors By To, Jenny
  22. An electricity price modeling framework for renewable-dominant markets By Hain, Martin; Kargus, Tobias; Schermeyer, Hans; Uhrig-Homburg, Marliese; Fichtner, Wolf
  23. Efficient market versus regulatory capture: a political economy assessment of power market reform in China By Lin, Jiang Dr.; Xiang, Chenxi Ms
  24. Municipal Building Codes and the Adoption of Solar Photovoltaics By Stefano Carattini; Béla Figge; Alexander Gordan; Andreas Löschel
  25. Measuring the Carbon Content of Wealth Evidence from France and Germany By Yannic Rehm; Lucas Chancel
  26. Is There a Green Dividend of National Redistribution? By Eren Gürer; Alfons Weichenrieder
  27. The Expected Effects of Climate Change on Colombia’s Current Account By Camila Agudelo-Rivera; Clark Granger-Castaño; Andrés Sánchez-Jabba
  28. The impact of air pollution on labour productivity in France By Clara Kögel
  29. Carbon Default Swap - Disentangling the Exposure to Carbon Risk through CDS By Alexander Blasberg; Rüdiger Kiesel; Luca Taschini
  30. Impact of Oil Price and Oil Production on Inflation in the CEMAC By Edouard Mien
  31. The historical role of energy in UK inflation and productivity and implications for price inflation in 2022 By Jennifer L. Castle; David F. Hendry; Andrew B. Martinez
  32. The Economics of Carbon Accounting and Carbon Offsets By Geoffrey Heal
  33. Placer l’environnement au cœur de la politique économique By Frédéric Reynès; Meriem Hamdi-Cherif; Gissela Landa; Paul Malliet; Alexandre Tourbah
  34. Independent Power Producers and Deregulation in an Island Based Small Electricity System: The Case of Papua New Guinea By Nepal, Rabindra; Sofe, Ronald; Jamasb, Tooraj
  35. Solar irrigation in Pakistan: a situation analysis report By Ali Shah, Muhammad Azeem; Akbar, Muhammad Zain Bin
  36. Puits de carbone : l’ambition de la France est-elle réaliste ? By Julia Grimault; Clothilde Tronquet; Valentin Bellassen; Thomas Bonvillain; Claudine Foucherot
  37. The effects of political short-termism on transitions induced by pollution regulations By Giovanni Di Bartolomeo; Enrico Saltari; Willi Semmler
  38. Working Paper 06-22 - Évaluation ex ante de la réforme de la taxation des voitures de société en Belgique By Laurent Franckx
  39. The effects of climate change on the natural rate of interest: a critical survey By Mongelli, Francesco Paolo; Pointner, Wolfgang; van den End, Jan Willem
  40. Emissionswirkungen der 2021 reformierten Kfz-Steuer: Eine empirische Analyse By Flintz, Joschka; Frondel, Manuel; Horvath, Marco
  41. Motivate the crowd or crowd- them out? The impact of local government spending on the voluntary provision of a green public good By Bartels, Lara; Kesternich, Martin
  42. Durabilités et spatialités des pratiques de mobilité des coworkers By Patricia Lejoux
  43. Measuring the environmental impacts of artificial intelligence compute and applications: The AI footprint By OECD
  44. Thresholds of external flows in financial development for environmental sustainability in sub-Saharan Africa By Simplice A. Asongu; Barbara D. Mensah
  45. The Moral Power of Youth Climate Activists - Transforming International Climate Politics? By Nisbett, Nicole; Spaiser, Viktoria
  46. Oil Windfalls, Taxation, and Demand for Government Accountability By Alexander James; Dilek Uz
  47. Did the German Aviation Tax Affect Passenger Numbers? New Evidence Employing Difference-in-differences By Helmers, Viola; van der Werf, Edwin
  48. The Electric Ceiling: Limits and Costs of Full Electrification By James Bushnell; David Rapson
  49. Adaptation in the global stocktake: Options to deliver on its mandate By Sirini Jeudy-Hugo; Sofie Errendal; Izumi Kotani
  50. Move on up - Electrification and Internal Migration By Budjan, Angelika
  51. Réorienter les usages du bois pour améliorer le puits de carbone By Océane Le Pierres; Julia Grimault; Valentin Bellassen
  52. The birth of an ITMO: Authorisation under Article 6 of the Paris Agreement By Luca Lo Re; Jane Ellis; Sandra Greiner
  53. An Ex-Ante Method to Verify Commercial U.S. Nuclear Power Plant Decommissioning Cost Estimates By Lordan-Perret, Rebecca; Bärenbold, Rebekka; Weigt, Hannes; Rosner, Robert
  54. An Event Study of the Ethereum Transition to Proof-of-Stake By Elie Kapengut; Bruce Mizrach
  55. Assessment of the European Union Green Public Procurement criteria for four product groups By Antonio Delre; Maria Grazia La Placa; Felice Alfieri; Giorgia Faraca; Malgorzata Agata Kowalska; Candela Vidal Abarca Garrido; Oliver Wolf
  56. Hohe Spritpreise: Autofahrer gehen vom Gas. Eine Betrachtung des Autobahnverkehrs mit Pkw der Jahre 2021 und 2022 in Nordrhein-Westfalen By Puls, Thomas; Wendt, Jan
  57. Firming up price inflation By Bunn, Philip; Anayi, Lena; Bloom, Nicholas; Mizen, Paul; Thwaites, Gregory; Yotzov, Ivan
  58. Understanding U.S. Inflation During the COVID Era By Laurence M. Ball; Daniel Leigh; Prachi Mishra

  1. By: Nathaly Rivera; Elisheba Spiller; J. Cristobal Ruiz-Tagle
    Abstract: Renewable energy can yield social benefits through local air quality improvements and their subsequent effects on human health. We estimate some of these benefits using data gathered during the rapid adoption of large-scale solar power generation in Chile over the last decade. Relying on exogenous variation from incremental solar generation capacity over time, we find that solar energy displaces fossil fuel generation, primarily coal-fired generation, and curtails hospital admissions, particularly those due to lower respiratory diseases. These effects are noted mostly in cities downwind of displaced fossil fuel generation and are present across the most vulnerable age groups. Our results document the existence of an additional channel through which renewable energy can increase social welfare.
    Date: 2022–11
  2. By: Etienne Romsom; Kathryn McPhail
    Abstract: The global energy transition is happening, but too slowly to limit climate change to acceptable levels, for diverse reasons. Carbon emissions policies and measures focus too little on absolute emission targets and too much on relative measures such as carbon intensity. Focus is needed on early emission reduction actions, while current efforts aim to for carbon neutrality at a distant date. High-profile listed companies disposing of high-carbon-emitting assets to unlisted organizations ('hand-me-down assets') is reducing transparency on emissions and emissions-reducing investments.
    Keywords: Natural gas, Emissions, Health, Air pollution, Technology, Transparency, Emissions targets
    Date: 2022
  3. By: Jennie Bai; Hong Ru
    Abstract: We study how the implementation of emissions trading systems (ETS) impacts emissions reductions and the usage of renewable energy using a panel sample of the largest 100 countries worldwide. Exploiting the cross-country variations in ETS implementations, we show that ETS adoption materially reduced greenhouse gas (carbon dioxide) emissions by 12.1% (18.1%). Moreover, ETSs reduced overall emissions by cutting fossil fuel usage, such as coal, by 23.70% while boosting the usage of renewable energy by 61.59%, on average. In contrast, the introduction of carbon taxes has a less effective impact on emissions reduction and fails to boost the usage of renewable energy.
    JEL: E62 H23 Q54 Q58
    Date: 2022–10
  4. By: August Bruno; Paige Weber; Andrew J. Yates
    Abstract: Proponents of Bitcoin argue that demand for electricity from Bitcoin miners can lead to an increase in renewable electricity capacity. We rigorously evaluate this claim by estimating a Bitcoin electricity demand curve and include this demand curve in a long-run model of the Texas electricity market. We find that while Bitcoin mining can indeed increase renewable capacity, it also increases carbon emissions. When Bitcoin miners provide grid management services in the form of demand response, their emissions impact is largely mitigated.
    Keywords: cryptocurrency, electricity markets, renewable energy, Bitcoin
    JEL: Q49 Q42 Q41
    Date: 2022
  5. By: Danielle Devogelaer; Dominique Gusbin
    Abstract: This paper examines what role offshore wind can play in helping Belgium achieve climate neutrality by 2050. The Belgian Exclusive Economic Zone is limited and its exploitation for energy purposes cannot be extended indefinitely. Therefore, this paper looks at the development of joint hybrid offshore wind projects that both provide renewable energy capacity and can serve as interconnectors linking different countries. Two scenarios are defined and studied. They differ in the level of ambition for these hybrid hubs and the necessary electricity supply for a de-fossilised Belgian economy.
    Keywords: Electricity, Electricity demand, Hydrogen, Renewable energy sources, Long-term energy projections, Energy modelling, energy transition
    JEL: C61 L94 Q41 Q42
    Date: 2021–10–18
  6. By: von Graevenitz, Kathrine; Rottner, Elisa
    Abstract: Climate policy often implies increasing energy prices. Due to incomplete regulation across the globe, concerns about their competitiveness and employment effects play an important role in the policy debate. Using micro-data on electricity network charges and the official census data for Germany, we study the impact of rising electricity costs on plant performance in German Manufacturing. Electricity network charges are determined through regulation in Germany and therefore exogenous to manufacturing plants, while making up a substantial share of final electricity prices. Our estimates imply a negative own-price elasticity of electricity of -0.4 to -0.6 in the short-run: A one cent increase in average network charges leads to a decrease in electricity procurement of roughly 3 %. There is suggestive evidence that this elasticity of response is decreasing over time, in line with nonlinearly increasing marginal abatement costs. Generally, we do not find significant effects on revenues, investments or capital stocks.
    Keywords: Network charges,Electricity Use,Firm Performance,Climate Policy,Manufacturing
    JEL: D22 L60 Q41 Q48
    Date: 2022
  7. By: Wang-Helmreich, Hanna; Obergassel, Wolfgang; Lah, Oliver
    Abstract: What is necessary to reach net zero emissions in the transport sector on a global level? To keep limiting global warming to 1.5ê C within reach, the world has to decarbonise by mid-century, with every sector contributing as much as possible as soon as possible. This paper identifies what has to be done in road transport, aviation, and shipping to achieve net zero emission in the transport sector. For this purpose, it first sets the scene by providing an overview of the origins and impacts of the concept of net zero emissions in international climate policy as well as of the current state and future prospects of global transport emissions using currently available scenarios for low-emission and net zero transport. While for staying below 1.5ê C, the basic approach to reducing transport emissions remains unchanged from what has been suggested in the past, the set, intensity and pace of actions as to shift fundamentally. Without first drastically reducing traffic volume and shifting transport demand to low-emission modes, reaching net zero transport will not be feasible: the amount of additional electricity required to fully electrify the sector with renewable energy is otherwise just too huge. After portraying key instruments for achieving net zero emissions in land transport, aviation, and shipping, this paper identifies key barriers for net zero transport. Based on this analysis, the authors recommend the following to be able to move transport to net zero: 1. Adapt Decarbonisation Strategies to Different Transport Sub-sectors 2. Prioritise and Significantly Increase Investment in Zero-/low-carbon Infrastructure 3. Massively Invest in the Development and Roll out of Zero-/low-emission Technologies 4. Focus on a Just Transition to Overcome Social and Political Barriers 5. Increase International Support and Cooperation.
    Date: 2022
  8. By: Gary Clyde Hufbauer (Peterson Institute for International Economics); Jeffrey J. Schott (Peterson Institute for International Economics); Megan Hogan (Peterson Institute for International Economics); Jisun Kim (POSCO Research Institute)
    Abstract: This Policy Brief assesses the evolving EU Emissions Trading System and EU carbon border adjustment mechanism (CBAM) and explains objections within Europe and from major trading countries likely to be affected by the proposed CBAM import levies. While EU officials have sought to ensure that the CBAM is consistent with obligations under the World Trade Organization (WTO), key aspects of the CBAM could violate WTO rules and are likely to be contested, taking years to play out. Meanwhile, several other countries will adopt new carbon-inspired border restrictions, adding to global trade frictions. Major carbon-emitting countries, therefore, need to act cooperatively instead of unilaterally to both advance the fight against climate change and update the rules-based global trading system. Two-thirds of greenhouse gas emissions result from nontraded activities, such as road transport, electricity generation, and home and office heating. Countries can curb emissions in these activities, while developing guidelines for carbon abatement in traded sectors.
    Date: 2022–10
  9. By: Firth, I.; Hitch, J.; Henderson, N.; Cookson, C.
    Abstract: Tackling the climate crisis is an international priority. Healthcare has a high carbon footprint, accounting for 5% of the UK's carbon footprint (Lenzen et al., 2020) and NHS England has estimated that the manufacture, supply, and use of pharmaceuticals account for 25% of the NHS's total carbon footprint (NHS England, 2020). The UK government and the NHS in England have shown international leadership by setting ambitious net zero targets in recent years. However, it is widely recognised that to meet net zero targets, the private sector has an important role to play in reducing the carbon and broader environmental footprints of the products and services they supply to society. Many pharmaceutical companies have made commitments to reach net zero carbon across their operations, but in order to deliver, several significant, industry-specific challenges must be overcome. This report sets out the high-priority activities that the NHS, UK government and industry should undertake to tackle these challenges. To adopt the recommendations, investment is needed from the industry, the UK Government and the NHS. No one actor can be expected to foot the bill for the upfront and ongoing investment needed to achieve long-term sustainability within the pharmaceutical industry. Any action taken in the UK will need to be replicated internationally to have any impact. Meaningful engagement, collaboration and action need to be taken now by governments, health systems, medicines regulators and companies globally to secure the era of green pharmaceuticals. The core analysis for this report was undertaken before the energy crisis began. The crisis is caused by a number of global factors that have been worsened by local factors to result in high energy prices. The soaring cost of energy serves to reinforce both the urgency for action and the recommended actions outlined in this report. Specifically, the energy crisis shows how vulnerable the global pharmaceutical supply chain is to geo-political events (such as the war in Ukraine), fluctuations in the price of energy due to shortages of supply and the effects of climate change like heatwaves, fires and draughts. In the context of high energy prices, any actions to improve energy efficiency will pay for themselves more quickly increasing the incentives on companies to invest in energy efficiency to reduce the vulnerability of the industry to global shocks in the future.
    Keywords: Policy, Organisation and Incentives in Health Systems
    JEL: I1
    Date: 2022–11–01
  10. By: Baker, Lucy
    Abstract: The subject of carbon pricing is rising up the global policy agenda, as countries take action in the aftermath of the United Nations Framework Convention on Climate Change’s Conference of the Parties 26 summit in November 2021. South Africa is the only country in sub-Saharan Africa to have enacted a carbon tax to date, and, globally speaking, was ahead of the curve when it started to consider its implementation at the start of 2010. With a historically energy-intensive and carbon-intensive economy as a core feature of its minerals-energy complex, South Africa is the world’s 14th largest emitter of greenhouse gases, and the largest emitter on the continent. Its electricity grid is the world’s most carbon-intensive, and its primary energy consumption is ranked 17th globally. While the country’s gross domestic product is the 30th highest in the world, it is also one of the most unequal. It has a legacy of socioeconomic and political exclusion, and marginalisation created by the apartheid history that has persisted in the decades since the democratic transition in 1994. This paper asks to what extent and in what way has South Africa’s political economy shaped the process and implementation of its carbon tax? In answering this question, the report explores and analyses the design and implementation of the tax; the key criticisms to which it has been subjected; the effectiveness of the tax, not least in light of the considerable allowances and exemptions that have been included in its design; the relationship between the carbon tax and other existing climate change policies; and the potential relevance of South Africa’s experience for other countries on the continent.
    Keywords: Governance,
    Date: 2022
  11. By: Alanda Venter (Department of Economics, University of Pretoria, Pretoria, South Africa); Roula Inglesi-Lotz (Department of Economics, University of Pretoria, Pretoria, South Africa)
    Abstract: In 2015, the COP21 countries made pledges to reduce CO2 emissions, focusing on decreasing emissions in the energy sector. A challenge most of these countries experience is reducing CO2 emissions while sustaining economic growth; a possible solution to this challenge might be to account for the effect of institutional quality. This study examines potential pairwise relationships between economic growth and CO2 emissions while considering the institutional quality. The study uses a panel dataset of 106 countries from 2003 to 2018, divided into four income groups. The findings at a disaggregated level confirm no causal relationship is found for low-income countries; however, causal relationships start to form as results are shown for middle-income to high-income countries. At an aggregate level, the results indicate economic growth granger causes CO2 emissions, while granger causation was also found between economic growth and institutional quality.
    Keywords: Energy, Institutions, Emissions, Institutional quality, Economic growth
    Date: 2022–11
  12. By: Gavarda, Claire; Diethelm, Lukas
    Abstract: As an example of supranational climate policy coordination for sectors not covered by carbon trading, the European Effort Sharing Decision set national targets for emission reductions for the time period 2013-2020. Member States were free to decide the national policies to implement to achieve these objectives. This is the first quantification of the impact this regulation had on the emissions of the corresponding firms. We exploit the differences along three variables: a national-level treatment intensity, an exposure index defined at the firm level and a time dimension (before or after the introduction of the policy). We find that, even in countries with no stringent target, emissions from exposed firms tended to decrease more than emissions from non-exposed firms. In addition, each percentage point increase in the stringency of the treatment leads to a 6.1% reduction in emissions for an average exposed firm. This provides interesting insights for other supranational climate agreements.
    Keywords: carbon emissions,effort sharing decision,firms,climate policy
    JEL: D22 F53 L51 Q54 Q58
    Date: 2022
  13. By: Robert Huang; Matthew E. Kahn
    Abstract: Access to electricity is a crucial determinant of quality of life and productivity. The United States has a highly reliable electricity grid but it faces new resilience challenges posed by more intense natural disasters and rising state level green power requirements. Using a U.S electric utility panel dataset from 2013 to 2020, we document that natural disaster exposure disrupts service, but utilities have made some progress in adapting to such shocks. Over the last decade, there has been a tradeoff between achieving local carbon mitigation goals and offering reliable power access.
    JEL: H40 L0 Q40
    Date: 2022–10
  14. By: Olivier J Blanchard (Peterson Institute for International Economics); Christian Gollier (Toulouse School of Economics); Jean Tirole (Toulouse School of Economics)
    Abstract: Climate change poses an existential threat. The authors argue that carbon pricing and green research and development (R&D) support are good economics, but their implementation can be improved. Even if carbon prices are generalized and given more substance, green R&D is still likely to be smaller than needed. Much more money must be spent on it than is now the case, and this money must be properly allocated in order to have an impact. Moreover, done well, other policies, such as standards, bans, and targeted subsidies, can be good economics. But they have often been incoherent and their implementation is delicate. The authors also argue that domestic and international compensation is key to the acceptability of efficient policies. Finally, although a country’s emissions will not materially alter the course of climate change, individual countries can still show the way ahead: They can develop technologies that can be used by other, poorer, countries. They can provide leadership/momentum on global agreements and on the need to fund climate change policies in developing economies.
    Keywords: Climate change, carbon price, green R&D, carbon border adjustment, climate finance
    JEL: D61 F18 H23 Q37 Q54
    Date: 2022–11
  15. By: Leila BEN SALEM; Ridha NOUIRA; KHALED JEGUIRIM; Christophe RAULT
    Keywords: , Crude oil price, ARDL, Nonlinear ARDL, symmetric and asymmetric
    Date: 2022
  16. By: Winta Beyene (University of Zurich - Department of Banking and Finance; Swiss Finance Institute); Matteo Falagiarda (European Central Bank (ECB)); Steven Ongena (University of Zurich - Department of Banking and Finance; Swiss Finance Institute; KU Leuven; NTNU Business School; Centre for Economic Policy Research (CEPR)); Alessandro Scopelliti (KU Leuven, Department Accounting, Finance and Insurance; University of Zurich - Department of Banking and Finance)
    Abstract: The transition to a green economy strongly depends on the existence of appropriate economic incentives for agents. The loan market for car purchases is a paradigmatic example in this respect, as lenders may set credit conditions which may discourage or support the purchase of high emission vehicles. Using car loan-level data we study whether banks adjust their lending terms and conditions in response to different shocks to the perceived environmental quality of diesel vehicles. Focusing on the impact of the diesel emissions scandal in the automobile sector in 2015 and on local policy changes regarding circulation restrictions due to air pollution, we find that bank lending particularly by captive banks may further reinforce the market and regulatory failures that led to extensive levels of pollution by the automobile sector.
    Date: 2022–10
  17. By: Piyu Ke; Zhu Deng; Biqing Zhu; Bo Zheng; Yilong Wang; Olivier Boucher; Simon Ben Arous; Chuanlong Zhou; Xinyu Dou; Taochun Sun; Zhao Li; Feifan Yan; Duo Cui; Yifan Hu; Da Huo; Jean Pierre; Richard Engelen; Steven J. Davis; Philippe Ciais; Zhu Liu
    Abstract: With the urgent need to implement the EU countries pledges and to monitor the effectiveness of Green Deal plan, Monitoring Reporting and Verification tools are needed to track how emissions are changing for all the sectors. Current official inventories only provide annual estimates of national CO$_2$ emissions with a lag of 1+ year which do not capture the variations of emissions due to recent shocks including COVID lockdowns and economic rebounds, war in Ukraine. Here we present a near-real-time country-level dataset of daily fossil fuel and cement emissions from January 2019 through December 2021 for 27 EU countries and UK, which called Carbon Monitor Europe. The data are calculated separately for six sectors: power, industry, ground transportation, domestic aviation, international aviation and residential. Daily CO$_2$ emissions are estimated from a large set of activity data compiled from different sources. The goal of this dataset is to improve the timeliness and temporal resolution of emissions for European countries, to inform the public and decision makers about current emissions changes in Europe.
    Date: 2022–11
  18. By: Smyth, Russell (Department of Economics, Monash University); Vespignani, Joaquin (Tasmanian School of Business & Economics, University of Tasmania)
    Abstract: Current commitments with net zero 2050 require that more than two billion electric vehicles (EVs) be produced globally by 2035. Australia produces more than 55% of the global lithium in the world. We argue that Australia's most significant contribution to realizing net zero 2050 could be to increase lithium production 10-20-fold by 2035. A similar case could equally be made for increasing other critical minerals. This would also contribute to securing Australia’s energy and national security. To realize these benefits current investment in lithium is much lower than the production of lithium batteries used in EVs requires, reflecting suboptimal tax rates. We conclude by proposing that a decarbonization tax discount for critical minerals is needed.
    Keywords: electric vehicles, lithium, net zero 2050, effective taxation rate
    JEL: E20 E60 Q20 Q28
    Date: 2022
  19. By: Barbara Annicchiarico (CEIS & DEF, University of Rome "Tor Vergata"); Marco Carli (DEF, University of Rome "Tor Vergata"); Francesca Diluiso (Mercator Research Institute on Global Commons and Climate Change)
    Abstract: We study the performance of alternative climate policies in a dynamic stochastic general equilibrium model that includes an environmental externality and agency problems associated with financial intermediation. Heterogeneous polluting producers finance their capital acquisition by combining their resources with loans from banks, are subject to environmental regulation, are hit by idiosyncratic shocks, and can default. The welfare analysis suggests that a cap-and-trade system will entail substantially lower costs of the business cycle than a carbon tax if financial frictions are stringent, firm leverage is high, and agents are sufficiently risk-averse. Simple macroprudential policy rules can go a long way in reining in business cycle fluctuations, aligning the performance of price and quantity pollution policies, and reducing the uncertainty inherent to the chosen climate policy tool.
    Keywords: Business Cycle; Cap-and-Trade; Carbon Tax; E-DSGE
    JEL: Q58 E32 E44
    Date: 2022–10–31
  20. By: Hirose, Kosuke; Matsumura, Toshihiro
    Abstract: A theoretical investigation is conducted on how common ownership (or the extent of cooperation in an industry) affects firms' incentives to adopt green fuel in an oligopoly. The findings show that common ownership hinders the switch from brown to green fuels in two ways. First, an increase in the degree of common ownership reduces a firm's incentive to adopt green fuel. Second, an increase in the degree of common ownership induces a production substitution from green to brown fuel firms. Both these effects reduce the share of green fuel.
    Keywords: green transition; green fuel; brown fuel; competition restricting effect; production substitution
    JEL: L13 M14 Q57
    Date: 2022–11–01
  21. By: To, Jenny
    Abstract: The European Union Circular Economy Action Plan (EU-CEAP) is key to transitioning to a circular economy and climate neutrality under the EU Green Deal - and developing and emerging countries (DECs) play important roles, They are essential for primary material chains, for example, for electric vehicle batteries, DECs are also part of secondary material chains, and Europe relies on them to recycle its plastic packaging, Despite the crucial roles that DECs play in Europe's transition to a circular economy, literature and policy discourses have not yet examined the EU-CEAP's impact, This discussion paper fills this gap by outlining the EU- CEAP's challenges and opportunities for DECs and presents recommendations for development cooperation.
    Keywords: circular economy,green economy,EU Green Deal,EU Circular Economy Action Plan,plastic waste,plastic packaging,electric vehicles,electric vehicle batteries,developing and emerging countries
    Date: 2022
  22. By: Hain, Martin; Kargus, Tobias; Schermeyer, Hans; Uhrig-Homburg, Marliese; Fichtner, Wolf
    Abstract: Renewables introduce new weather-induced patterns and risks for market participants active in the energy commodity sector. We present a flexible framework for power spot prices that is capable of incorporating a weather model for the joint distribution of local weather conditions. This not only allows us to make use of a long history of local weather data in the calibration procedure but also makes it possible to assess how changes in the renewable generation portfolio impact the characteristics of future wholesale spot prices. Empirical tests demonstrate the model's capability to reproduce salient features of market variables. We furthermore show why our model offers unique benefits for market players compared to existing approaches.
    Date: 2022
  23. By: Lin, Jiang Dr.; Xiang, Chenxi Ms
    Abstract: China began implementing market-based economic dispatch through power sector reform in 2015, but the reform has encountered some political and economic challenges. This paper identifies the reform’s efficiency changes and explores and quantifies the influences of market-driven and politically driven mechanisms behind these changes, employing a partial market equilibrium model integrating high-frequency data in southern China. We found that the dispatch transition improves the overall efficiency, but regulatory capture in provincial markets limits its full potential. The preference for local enterprises over central state-owned enterprises (SOEs) by local governments, in the form of allocated generation quotas, demonstrates the political challenge for market reform. The allocated generation quota protects small coal-fired and natural gas generators owned by local SOEs, lessening their motivation to improve generation efficiency, even after the reform. As a result, nearly half of the potential carbon dioxide emission reduction and social welfare gains through market reform is not realized.
    Keywords: Social and Behavioral Sciences, Economic dispatch, electricity market, Regulatory capture, Efficiency gains, China
    Date: 2022–11–11
  24. By: Stefano Carattini; Béla Figge; Alexander Gordan; Andreas Löschel
    Abstract: Conflicting societal goals can lead to national and local policies that are at odds with each other. National policies promoting the adoption of solar photovoltaics may be counteracted by local policies defining the aesthetics of the built environment. As solar photovoltaic energy approaches grid parity globally, non-pecuniary barriers to the adoption of this important renewable energy source become increasingly salient. Using a unique survey of municipalities regarding such building codes and administrative data on all solar installations in Germany, a leader in solar adoption, we document the impact that municipalities amending their building codes to restrict solar installations, often with an eye toward preserving the historical nature of the town, has on solar adoption. We find that municipalities that implement solar policies have 10.4 percent less solar photovoltaic capacity than municipalities in the control group. We confirm our results when applying spatial techniques and analyzing the impact of such policies on regulated areas within municipalities.
    Keywords: building codes, solar photovoltaics, policy evaluation, NIMBY
    JEL: D62 H77 Q48 Q58 R52
    Date: 2022
  25. By: Yannic Rehm (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); Lucas Chancel (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, WIL - World Inequality Lab)
    Abstract: This paper estimates the distribution of annual wealth-related greenhouse gas (GHG) emissions in France and Germany, using a novel method to combine newly released air emission accounts, national accounts, and survey data on wealth. In our proposed framework, wealth holders are responsible for the emissions that occur in production processes they implicitly control. Our findings suggest that wealth-related emissions are at least as much concentrated at the very top than wealth itself, possibly even more. In addition, wealth-related emissions appear to be more even more concentrated in Germany than in France. Large emissions inequalities persist even when individuals are attributed a combination of direct and indirect GHG emissions. Wealth-related emissions of the average top 10% wealth holder exceed total emissions (including direct and indirect emissions from consumption) of the average individual in the bottom 50% in France and Germany. All emissions considered, the life of the average top 10% wealth holder appears to be 3-5 times more carbon-intensive than the average individual in the bottom 50%. Finally, we discuss the paper's findings implications for a per-ton tax on the carbon content of wealth.
    Keywords: Capital,Carbon tax,Emissions,Inequality,National accounts,Survey,Taxation,Wealth
    Date: 2022–09
  26. By: Eren Gürer; Alfons Weichenrieder
    Abstract: CO2 emissions are disproportionately caused by more affluent consumers. In the political debate, this fact has triggered the demand for income redistribution and wealth taxes not only to reduce inequality but also to reduce CO2 emissions. This paper calculates the possible size of such a green dividend of redistribution in 26 countries and concludes that, for most EU countries, it is negative if the redistribution is efficient, in the sense that it keeps average incomes constant. If the redistribution introduces inefficiencies that lead to total income losses, the negative green dividend, otherwise associated with additional redistribution, may be avoided.
    Keywords: environment, redistribution, CO2 emissions, inequality, green dividend
    JEL: Q56 D12 D30
    Date: 2022
  27. By: Camila Agudelo-Rivera; Clark Granger-Castaño; Andrés Sánchez-Jabba
    Abstract: This study analyzes the expected effects of climate change on Colombia’s current account. To this end, we present a literature review that outlines how climate-related risks could impact the balance of payments, complemented with an analysis that illustrates how the 2014-2015 oil shock affected the country's external sector. Subsequently, we show a projection of the current account balance through 2050 under different climate scenarios in order to establish whether the incidence of these risks would affect the country’s long-run current account. Our results indicate that achieving net-zero emissions by 2050 could widen the current account deficit, relative to a continuation of current climate policies, by an amount ranging between 2.6% and 4.6% of GDP. RESUMEN: Este estudio muestra los efectos esperados del cambio climático sobre la cuenta corriente en Colombia. Para ello presentamos una revisión de literatura que expone cómo los riesgos asociados con este fenómeno podrían impactar la balanza de pagos, complementando con un análisis que ilustra cómo el choque petrolero de 2014-2015 afectó el sector externo del país. Posteriormente, realizamos una proyección del balance corriente hasta 2050 bajo distintos escenarios climáticos con el objetivo de establecer si la incidencia de estos riesgos afectaría el balance corriente en el largo plazo. Nuestros resultados indican que la consecución de cero emisiones netas podría ampliar el déficit corriente hacia 2050, relativo a una continuidad de las políticas climáticas actuales, en una cantidad que oscilaría entre 2,6% y 4,6% del PIB.
    Keywords: Climate change, current account, climate-related risks, fully modified OLS, cambio climático, cuenta corriente, riesgos asociados al cambio climático, mínimos cuadrados totalmente modificados
    JEL: F32 G18 Q51 Q54
    Date: 2022–10
  28. By: Clara Kögel (OCDE - Organisation de Coopération et de Développement Economiques = Organisation for Economic Co-operation and Development, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper investigates the effect of air pollution on labour productivity in French establishments in both manufacturing and non-financial market services sectors from 2001 to 2018. An instrumental variable approach based on planetary boundary layer height and wind speed allows identifying the causal effect of air pollution on labour productivity. The finding shows that a 10% increase in fine particulate matter leads, on average, to a 1.5% decrease in labour productivity, controlling for firm-specific characteristics and other confounding factors. The analysis also considers different dimensions of heterogeneity driving this adverse effect. The negative effect of pollution is mainly driven by service-intensive firms and sectors with a high share of highly skilled workers. This finding is in line with the expectation that air pollution affects cognitive skills, concentration, headache, and fatigue in non-routine cognitive tasks. Compared to an estimation of the marginal abatement cost of PM 2.5 reductions by the Air Quality Directive 2008/50/EC, gains only from the labour productivity channel are equivalent to one-third of the abatement cost over the implementation period. All in all, these estimates suggest that the negative impact of air pollution is much larger than previously documented in the literature.
    Keywords: air pollution,labour productivity,planetary boundary layer height
    Date: 2022–10
  29. By: Alexander Blasberg; Rüdiger Kiesel; Luca Taschini
    Abstract: Using Credit Default Swap spreads, we construct a forward-looking, market-implied carbon risk factor and show that carbon risk affects firms’ credit spread. The effect is larger for European than North American firms and varies substantially across industries, suggesting the market recognises where and which sectors are better positioned for a transition to a low-carbon economy. Moreover, lenders demand more credit protection for those borrowers perceived to be more exposed to carbon risk when market-wide concern about climate change risk is elevated. Finally, lenders expect that adjustments in carbon regulations in Europe will cause relatively larger policy-related costs in the near future.
    Keywords: climate change, carbon risk, credit risk, Credit Default Swap spreads
    JEL: C21 C23 G12 G32 Q54
    Date: 2022
  30. By: Edouard Mien (CERDI - Centre d'Études et de Recherches sur le Développement International - UCA [2017-2020] - Université Clermont Auvergne [2017-2020] - CNRS - Centre National de la Recherche Scientifique)
    Abstract: There are different channels through which variations in international crude oil prices translate into changes in net-oil exporting countries' domestic prices. This article identifies two of these causal mechanisms, namely the pass-through effect and the Dutch disease effect. It intends to disentangle these two effects in the five oil producers of the Central African Economic and Monetary Community: Cameroon, the Republic of Congo, Chad, Equatorial Guinea, and Gabon. It also investigates the heterogeneity across countries in the face of international oil price and domestic oil production shocks based on a multiple time-series strategy covering the period 1995-2019. Applying Dynamic Ordinary Least Squares and Autoregressive Distributed Lag models, it concludes to the presence of a pass-through effect in Cameroon, Chad, and the Republic of Congo and of a Dutch disease effect in Equatorial Guinea. This contributes to the understanding of the relationships between international commodity prices and domestic consumer price variations but can also help policymakers in the CEMAC by assessing the vulnerability of its members toward external shocks.
    Date: 2022–12
  31. By: Jennifer L. Castle; David F. Hendry; Andrew B. Martinez
    Abstract: We model UK price and wage inflation, productivity and unemployment over a century and a half of data, selecting dynamics, relevant variables, non-linearities and location and trend shifts us¬ing indicator saturation estimation. The four congruent econometric equations highlight complex interacting empirical relations. The production function reveals a major role for energy inputs ad-ditional to capital and labour, and although the price inflation equation shows a small direct impact of energy prices, the substantial rise in oil and gas prices seen by mid-2022 contribute half of the increase in price inflation. We find empirical evidence for non-linear adjustments of real wages to inflation: a wage-price spiral kicks in when inflation exceeds about 6–8% p.a. We also find an addi-tional non-linear reaction to unemployment, consistent with involuntary unemployment. A reduction in energy availability simultaneously reduces output and exacerbates inflation.
    Date: 2022–09–07
  32. By: Geoffrey Heal
    Abstract: I provide a rigorous framework for accounting for corporate greenhouse gas emissions, based on the Greenhouse Gas Protocol. I show that only Scope 1 emissions are of interest from a national policy perspective: that emissions in Scopes 2 and 3 are duplicative, and that downstream Scope 3 emissions in total are equal to total Scope 1 emissions. The correct measure of a company's contributions to national GHG emissions is its Scope 1 emissions plus a part of the emissions of the household and government sectors. This is not generally the same as the level of emissions for which a company bears some responsibility, legal or otherwise. I apply some of these ideas to an analysis of carbon offsets, trying to understand the conditions under which offsets are a valid mechanism for reducing emissions by formalizing the ideas of additionality and leakage.
    JEL: Q00
    Date: 2022–11
  33. By: Frédéric Reynès (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po, NEO - Netherlands Economic Observatory); Meriem Hamdi-Cherif (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Gissela Landa (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Paul Malliet (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Alexandre Tourbah (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)
    Abstract: L'objectif de ce Policy brief est de faire le diagnostic des politiques de lutte contre le changement climatique en France et de mettre en avant les grands chantiers nécessaires. Nous revenons d'abord sur les performances de la France en matière de baisse des émissions de gaz à effet de serre. Bien que des efforts soient engagés, les politiques mises en oeuvre sont en retard par rapport à l'objectif de la neutralité carbone à l'horizon 2050. Au rythme de baisse des émissions des 10 dernières années, cet objectif ne serait atteint qu'en 2130. Il est donc primordial dès le prochain quinquennat de relancer concrètement la politique environnementale de la France. Pour mettre la France sur une trajectoire de décarbonation ambitieuse et réaliste, deux stratégies sont souvent opposées. La première repose sur les évolutions technologiques tandis que la seconde s'appuie sur la sobriété énergétique. Nous montrons au contraire la complémentarité des deux approches qui ont chacune leurs incertitudes : pari technologique versus pari de la modification des comportements. Le point commun de toute stratégie compatible avec la neutralité carbone en 2050 est qu'un effort significatif à mettre en oeuvre sans délai est nécessaire. Un enjeu important de l'élection présidentielle est de trancher démocratiquement sur quoi doit porter cet effort et sur les instruments à privilégier : inciter à des modes de consommation plus sobres, investir massivement dans des modes de production d'énergie décarbonée, faire des choix technologiques, etc. Cela nous amène à discuter des avantages et des inconvénients des principaux instruments économiques (prix du carbone, subventions, investissements publics, normes, sensibilisations) dont disposent les décideurs politiques pour mettre en oeuvre la transition bas carbone. Nous en tirons plusieurs conclusions. Aucun instrument n'étant parfait, la politique environnementale nécessite de s'appuyer sur une combinaison d'instruments et donc d'être pensée dans sa globalité. Le manque de considération des questions d'acceptabilité et de justice sociale sont des éléments clé pour expliquer les blocages autour des politiques de lutte contre le changement climatique. Nous proposons deux pistes pour relancer les politiques environnementales :
    Date: 2022–02–09
  34. By: Nepal, Rabindra (School of Business, Faculty of Business and Law, University of Wollongong, Australia); Sofe, Ronald (National Research Institute, Papua New Guinea); Jamasb, Tooraj (Department of Economics, Copenhagen Business School)
    Abstract: The island economy of Papua New Guinea (PNG) is facing severe electricity shortages and is therefore turning to implementing broader power sector reforms as a vehicle to attract private capital and investments in electricity generation. This study, based on a case-study approach, revisits the reform progress and plans in the electricity sector of PNG alongside the development and integration of IPPs in its small power system. Lessons of reform experiences and IPPs integration are drawn from three other smaller power systems belonging to Nepal, Nicaragua and the Northern Territory of Australia including stakeholder consultations, which includes two IPPs of PNG. We find a widening gap between reform ‘theory’ and ‘practice’ in the PNG power sector. Cost reflective pricing is implemented but cost recovery is never achieved by the vertically integrated state-owned utility while the insolvency of this state-owned single buyer poses the greatest perceived revenue risk to the IPPs. This lack of revenue reimbursement to the IPPs by the single buyer is a barrier towards attracting private capital into electricity generation We recommend that strong political will and strengthening of institutional arrangements are urgent reform measures to attract private capital in power generation as political instability continue.
    Keywords: reforms; small systems; political instability; independent power producers; regulation
    JEL: L50 L94
    Date: 2022–10–27
  35. By: Ali Shah, Muhammad Azeem (International Water Management Institute); Akbar, Muhammad Zain Bin (International Water Management Institute)
    Keywords: Solar energy; Irrigation systems; Groundwater; Water extraction; Pumps; Water use; Tube wells; Water quality; Policies; Sustainability; Farmers
    Date: 2021
  36. By: Julia Grimault (I4CE-Institute for Climate Economics); Clothilde Tronquet (I4CE-Institute for Climate Economics); Valentin Bellassen (CESAER - Centre d'Economie et de Sociologie Rurales Appliquées à l'Agriculture et aux Espaces Ruraux - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Dijon - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement); Thomas Bonvillain (I4CE-Institute for Climate Economics); Claudine Foucherot (I4CE-Institute for Climate Economics)
    Abstract: Pour atteindre ses engagements climatiques, la France s'est dotée d'une feuille de route nationale, la Stratégie Nationale Bas‑Carbone (SNBC). Cette stratégie détermine les trajectoires et orientations à suivre pour chaque secteur de l'économie, de manière à atteindre la neutralité carbone à l'horizon 2050, en cohérence avec les objectifs de l'Accord de Paris et avec les recommandations du GIEC. Ainsi, d'ici 30 ans, la France devra absorber autant de gaz à effet de serre (GES) qu'elle n'en émet, c'est-à-dire près de 80 MtCO2. Cet objectif correspond en fait à un doublement du volume des absorptions de CO2, ou puits de carbone, d'ici 2050. Pour atteindre cet objectif, la SNBC fixe ainsi des objectifs chiffrés pour les différents secteurs associés au puits de carbone : la forêt et le bois ; l'agriculture ; les technologies de captage et stockage géologique de CO2. Les projections de ces compartiments et les hypothèses techniques sous-jacentes ont été décryptées et confrontées à la littérature existante dans une analyse approfondie, avec l'objectif d'éclaircir les enjeux et les conditions de cette augmentation massive de la séquestration du carbone. Il en ressort que les transformations attendues des secteurs sont profondes et que certaines orientations du secteur forêt-bois risquent de ne pas être réalisables.
    Keywords: Carbon neutrality,climate change,carbon storage,agriculture,forest,wood
    Date: 2022
  37. By: Giovanni Di Bartolomeo; Enrico Saltari; Willi Semmler
    Abstract: We study the dynamic problem of pollution control enacted by some policies of regulation and mitigation. The transition dynamics from one level of regulation and mitigation to another usually involve inter-temporal trade-offs. We focus on how different policymaker's time horizons affect these trade-offs. We refer to shorter lengths in policymaker's time horizons as political short-termism or inat-tention, which is associated with political economy or information constraints. Formally, inattention is modeled by using Nonlinear Model Predictive Control. Therefore, it is a dynamic concept: our policymakers solve an inter-temporal de-cision problem with a finite horizon that involves the repetitive solution of an optimal control problem at each sampling instant in a receding horizon fashion. We find that political short-termism substantially affects the transition dynam-ics. It leads to quicker but costlier transitions. It also leads to an under-evaluation of the environmental costs that may accelerate climate change.
    Keywords: climate policy; global warming; non-linear model predictive control; short-termism
    JEL: Q54 Q58 P28 C61
    Date: 2022–11
  38. By: Laurent Franckx
    Abstract: In Belgium, the Law on Fiscal and Social Greening of Mobility of 25 November 2021 eliminates corporate tax deductibility for all company cars except those with zero CO2 emissions. The main effect of the tax reform is an accelerated electrification of the company car fleet and an accelerated decline in CO2 emissions. Compared to the no-reform scenario, the reform leads to an increase in net tax revenues of about 1 billion euro on an annual basis.
    Keywords: Company car taxation, Fiscal reform, Car demand, CO2, Car fleet greening, Discrete choice modelling
    JEL: C25 H2 H3 Q58 R48
    Date: 2022–10–12
  39. By: Mongelli, Francesco Paolo; Pointner, Wolfgang; van den End, Jan Willem
    Abstract: This survey reviews the literature about the impact of climate change on the natural rate of interest (r*), an important yardstick for monetary policy. Economic and financial developments can lower r* in scenarios with increasing climate-related damages and uncertainty that reduce productivity growth and raise precautionary savings. Instead, in scenarios that assume innovations and investments induced by transition policies, r* could be affected positively. Orderly climate policies have a pivotal role by facilitating the transition to a carbon-neutral economy and supporting a steady investment flow. We discuss the main models used to simulate the effects of climate change on r* and summarize the outcomes. The downward effects of climate change on r* can be substantial, even taking into account the high degree of uncertainty about the outcomes. Moreover, the downward pressure on r* will further challenge monetary policy in the long run, by limiting its policy space. JEL Classification: E52, Q54
    Keywords: climate change, interest rate, monetary policy, natural rate of interest, social cost of carbon
    Date: 2022–10
  40. By: Flintz, Joschka; Frondel, Manuel; Horvath, Marco
    Abstract: Jüngst wurde die emissionsabhängige Komponente der Kfz-Steuer angepasst und progressiv gestaltet, sodass sich die Steuerbelastung für Fahrzeuge mit hoher Emissionsintensität überproportional erhöht hat. Vor diesem Hintergrund analysiert dieser Beitrag die Effektivität der reformierten Kfz-Steuer in Bezug auf ihre Lenkungswirkung und ihr Einsparpotential an Kohlendioxid (CO2) mit Hilfe des diskreten Nachfragemodells von Berry et al. (1995). Dieses Modell ermöglicht eine realitätsnähere Darstellung der Nachfrageseite als Standard-Logit- oder Nested-Logit-Modelle. Unsere Schätzergebnisse zeigen, dass infolge der Reform jährlich ungefähr 21.000 Autos weniger verkauft werden, die mittlere CO2-Intensität sich um 0,74 g/km verringert und der jährliche CO2-Ausstoß neu gekaufter Fahrzeuge um rund 60.000 Tonnen sinkt. Diese geringen Effekte sind intuitiv verständlich: Eine durchschnittliche Steuererhöhung von rund 11 Euro für die Fahrzeughalter in Deutschland entfaltet nicht die Lenkungswirkung, derer es bedarf, um die Emissionen substanziell zu senken. Unsere Simulationsergebnisse einer fiktiven Kfz-Besteuerung mit stärker progressiven Steuersätzen, die eine mittlere Steuererhöhung von ca. 90 Euro zur Folge hätte, zeigen: Dies würde deutlich stärkere Effekte haben und die durchschnittlichen spezifischen CO2-Emissionen neuer Autos um gut 5 g/km senken sowie die Anzahl an Neuzulassungen um rund 195.000 Pkw. Dadurch könnten jährlich rund 450.000 Tonnen CO2 eingespart werden. Verglichen mit den jährlichen Emissionen der Autoflotte in Deutschland von ca. 100 Millionen Tonnen wären aber selbst die Effekte der fiktiven KfzBesteuerung mit höheren Steuersätzen recht begrenzt.
    Keywords: Zulassungsteuer,Automobilflotte,spezifische CO2-Emissionen
    JEL: D12 H23
    Date: 2022
  41. By: Bartels, Lara; Kesternich, Martin
    Abstract: Cities are increasingly hold accountable for climate action. By demonstrating their proenvironmentality through own climate-related activities, they not at least aspire to encourage individual climate protection efforts. Based on standard economic theory there is little reason to assume that this is a promising strategy. Financed by taxpayers' money, cities' contributions are considered as substitutes that crowd-out private contributions to the same public good. Inspired by research on providing information on reference group behavior, we challenge this argument and conduct a framed-field experiment to analyze the impact of reference group information on the voluntary provision of a green public good. We investigate whether information on previous contributions by fellow citizens or the city affect individual contributions. We do not find statistical evidence that city-level information crowds-out additional individual contributions. A reference to fellow citizens significantly increases the share of contributors as it attracts subjects that are not per-se pro-environmentally oriented.
    Keywords: Voluntary provision of environmental public goods,Social Norms,Crowding-out,Willingness to pay,Framed-field experiment
    JEL: C93 C83 D9 H41 Q54
    Date: 2022
  42. By: Patricia Lejoux (LAET - Laboratoire Aménagement Économie Transports - UL2 - Université Lumière - Lyon 2 - ENTPE - École Nationale des Travaux Publics de l'État - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Do coworking spaces promote more sustainable mobility practices? - Questioning the sustainability of coworkers' mobility practices. In France, the creation of CSs was accompanied by a very proactive discourse from the public authorities, who encouraged their development. This support was justified by the presumed virtuous effects of coworking on sustainable mobility. By offering workers the possibility to work close to their home, CSs are supposed to reduce the environmental nuisances generated by commuting (CO2 emissions, air pollution, etc.). The objective of the project was to break with this old debate, which appeared in the 1990s with the emergence of telecommuting, and to broaden the questioning around the sustainability of coworkers' lifestyles, captured through their mobility practices. The objective of the project was to understand to what extent the possibility offered by coworking to choose one's place of work, by teleworking, could contribute to modify the mobility practices of individuals (daily trips, but also travels, choice of place of residence, etc.) and eventually make them more sustainable, not only environmentally, but also economically and socially.
    Abstract: Les espaces de coworking favorisent-ils des pratiques de mobilité plus durables ? - Questionner la durabilité des pratiques de mobilité des coworkers. En France, la création d'ECW s'est accompagnée d'un discours très volontariste des pouvoirs publics qui ont encouragé leur développement. Ce soutien a été notamment justifié par les effets présumés vertueux, mais non démontrés, du coworking en matière de mobilité durable. En offrant aux actifs la possibilité de travailler à proximité de leur domicile, les ECW sont supposés réduire les nuisances environnementales générées par les déplacements domicile-travail (émissions de CO2, pollution de l'air, etc.). L'objectif du projet était de rompre avec ce débat ancien, apparu dans les années quatre-vingt-dix avec l'émergence du télétravail, et d'élargir le questionnement autour de la durabilité des modes de vie des coworkers, saisis à travers leurs pratiques de mobilité. L'objectif du projet était de comprendre dans quelle mesure la possibilité qu'offrait le coworking de choisir davantage son lieu de travail, grâce au développement du travail à distance, pouvait contribuer à modifier les pratiques de mobilité des individus (déplacements quotidiens, mais aussi voyages, choix du lieu de résidence, etc.) et les rendre éventuellement plus durables, sur le plan environnemental, mais aussi économique et social.
    Keywords: Pratiques de mobilité,Coworkers,Durabilité urbaine
    Date: 2022–03
  43. By: OECD
    Abstract: Artificial intelligence (AI) systems can use massive computational resources, raising sustainability concerns. This report aims to improve understanding of the environmental impacts of AI, and help measure and decrease AI’s negative effects while enabling it to accelerate action for the good of the planet. It distinguishes between the direct environmental impacts of developing, using and disposing of AI systems and related equipment, and the indirect costs and benefits of using AI applications. It recommends the establishment of measurement standards, expanding data collection, identifying AI-specific impacts, looking beyond operational energy use and emissions, and improving transparency and equity to help policy makers make AI part of the solution to sustainability challenges.
    Date: 2022–11–15
  44. By: Simplice A. Asongu (Yaounde, Cameroon); Barbara D. Mensah (University of Professional Studies, Accra, Ghana)
    Abstract: The study complements extant literature by assessing linkages between financial development, external flows and CO2 emissions in 27 sub-Saharan African countries for the period 2002 to 2018. The empirical evidence is based on interactive quantile regressions and external flows consist of remittances, foreign aid, trade openness and foreign investment. The findings establish minimum thresholds of external flows that are needed for the corresponding external flows to interact with financial development in view of promoting environmental sustainability by means of reducing CO2 emissions.
    Keywords: foreign aid, remittances, foreign direct investment, official development assistance, trade, CO2 emissions, quantile regressions
    JEL: C52 O38 O40 O55 P37
    Date: 2022–10
  45. By: Nisbett, Nicole; Spaiser, Viktoria
    Abstract: Youth Climate Activists are an important norm entrepreneur as humanity is increasingly awakening to the realities of accelerating climate change. They push for seeing climate change not merely through cost-benefit analysis frames but through frames of multiple climate justices and our responsibility to protect the most vulnerable, including our own children, against the unfolding climate crisis. But how successful have these activists been in shifting perspectives in the context of international climate politics, where often the fundamental parameters are set for national climate politics? Here we computationally investigate to what extent the normative framework advanced by this movement is increasingly penetrating the international public climate debate, changing arguments, priorities, and frames used at international climate policy negotiations hosted by UNFCCC and we investigate the key actors pushing for normative change. We find that indeed the normative framework advanced by the movement has successfully penetrated the discourse around UNFCCC and that youth climate activists were able gain support from norm champions furthering their cause and further contributing to the diffusion of their normative framework. We also find that their normative framework is slowly starting to spread among government actors.
    Date: 2022–10–25
  46. By: Alexander James (Department of Economics, University of Alaska Anchorage); Dilek Uz (Department of Economics, University of Nevada Reno)
    Abstract: What determines demand for government accountability? According to the theory of the rentier state, taxation engages an otherwise acquiescent electorate and increases demand for public transparency, accountability, and fiscal efficiency. This paper tests this theory using an online survey-experiment administered in the United States in which subjects are randomly assigned to one of five informational treatments describing the waste or embezzlement of income or oil-tax revenue. We then assess subject demand for accountability. Several insights emerge. First, intentions matter; embezzlement is punished more severely than incompetence. Second, income-tax embezzlement is punished more severely than oil-tax embezzlement, but only among high-income earners. Third, there is weak evidence that patronage (in the form of an oil-financed tax cut) reduces demand for accountability. Considered jointly, these results suggest an interesting Catch-22 in which a lack of taxation causes government waste and corruption, which is often then used to justify opposition to taxation.
    Keywords: Rentier States, Public Finance, Voter Apathy, Political Resource Curse, Survey Experiment
    JEL: Q38 Q32 D72 H71
    Date: 2022–10
  47. By: Helmers, Viola; van der Werf, Edwin
    JEL: Q58
    Date: 2022
  48. By: James Bushnell; David Rapson
    Abstract: Electrification is a centerpiece of global decarbonization efforts. Yet there are reasons to be skeptical of the inevitability, or at least the optimal pace, of the transition. We discuss several under-appreciated costs of full, or even deep, electrification. Consumer preferences can operate in favor of and in opposition to electrification goals; and electrification is likely to encounter physical and economic obstacles when it reaches some as-yet-unknown level. While we readily acknowledge the external benefits of decarbonization, we also explore several under-appreciated external costs. The credibility and eventual success of decarbonization efforts is enhanced by foreseeing and ideally avoiding predictable but non-obvious costs of promising abatement pathways. Thus, even with all of its promise, the degree of electrification may ultimately reach a limit.
    Keywords: Electrification
    JEL: L43 Q40
    Date: 2022–10–21
  49. By: Sirini Jeudy-Hugo (OECD); Sofie Errendal (OECD); Izumi Kotani (OECD)
    Abstract: This paper explores what the first global stocktake (GST1) under the Paris Agreement could usefully do in relation to two elements of its mandate on adaptation, namely, to review the adequacy and effectiveness of adaptation, and to enhance the implementation of adaptation action. This paper also discusses potential outputs from GST1, and how they could facilitate the intended outcomes of the process on adaptation, taking into account a learning-by-doing approach. This paper highlights that a comprehensive collective assessment of the adequacy and effectiveness of adaptation requires data that is currently not available for various reasons. Nonetheless, this paper finds that the GST’s ability to incorporate learning and its scope for continuous improvement provides an important opportunity to develop, apply and refine approaches and methodologies over time to better address the GST’s mandate on adaptation in subsequent cycles. The paper concludes that the GST1 process could help to inform and enhance Parties’ adaptation efforts by identifying priority data needs and gaps, increasing understanding of different approaches to assessing adaptation actions, identifying enabling factors for effective adaptation, and building linkages with parallel processes including on the Global Goal on Adaptation. In this way, the GST1 could play an important role in helping to set a foundation for improved approaches and data on adaptation over time that can feed into future GSTs and support the long-term goals of the Paris Agreement.
    Keywords: Adaptation, Climate change, Global stocktake, Monitoring and evaluation, Paris Agreement, UNFCCC
    JEL: F53 Q54 Q56 Q58 O29
    Date: 2022–11–02
  50. By: Budjan, Angelika
    JEL: H54 J60 L94
    Date: 2022
  51. By: Océane Le Pierres (I4CE-Institute for Climate Economics); Julia Grimault (I4CE-Institute for Climate Economics); Valentin Bellassen (CESAER - Centre d'Economie et de Sociologie Rurales Appliquées à l'Agriculture et aux Espaces Ruraux - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Dijon - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement)
    Abstract: Cette étude passe en revue les produits bois à longue durée de vie pouvant être obtenus à partir de ressources aujourd'hui dédiés aux filières du papier et de l'énergie, les contraintes techniques qui pèsent sur leur production, et les possibles débouchés sur le marché français. Deux leviers prometteurs ont été identifiés pour mieux valoriser le bois récolté : 1) Optimiser la valorisation matière du bois d'oeuvre, c'est-à- dire des gros bois de qualité supérieure généralement destinés à des usages longs, en transformant autant que possible le bois récolté en sciages, quitte à mobiliser de nouvelles technologies. 2) Réorienter une part de la ressource actuellement utilisée par les filières du papier et de l'énergie, comme les bois de plus petits diamètres et les produits dérivés de la transformation du bois, à des usages à longue durée de vie comme les panneaux de construction et les isolants en bois.
    Keywords: Carbon neutrality,wood products,reorientation,climate change mitigation,France
    Date: 2022
  52. By: Luca Lo Re (International Energy Agency); Jane Ellis (OECD); Sandra Greiner
    Abstract: “Authorisation” is a new but as yet undefined component of the guidance for implementation of Article 6 of the Paris Agreement. Authorisation is important as it triggers both corresponding adjustments and reporting requirements. This paper identifies and analyses open questions related to what is authorised, by what process, for what purpose, the format and timing of authorisation, and how any ex-post changes to authorisation can be made. The answers to these questions can affect the attractiveness for Parties and the private sector to participate in Article 6 cooperation. The paper also outlines areas of Article 6.2 guidance that could be usefully clarified at the international level, and implications of different options for the domestic implementation of Article 6 authorisation provisions, drawing from examples of a few frontrunner Parties who have already established bilateral agreements and domestic structures for international cooperation under Article 6. The paper concludes that some of the open questions could be clarified at the international level, such as how to report any changes to authorisations and if the authorisation needs to be provided concurrently by the participating Parties. Other questions could be clarified at the national level by the participating Parties providing the authorisation. These include whether participating Parties can choose to include additional elements in their authorisations, and which roles authorised entities could play.
    Keywords: Article 6, Carbon markets, Kyoto Protocol, Paris Agreement, UNFCCC
    JEL: F53 Q29 Q49 Q54 Q56 Q58
    Date: 2022–11–02
  53. By: Lordan-Perret, Rebecca (University of Basel); Bärenbold, Rebekka (University of Basel); Weigt, Hannes (University of Basel); Rosner, Robert
    Abstract: There are billions of dollars at stake in the US nuclear power plant decommissioning market. Approximately 100 nuclear power plants are still operating but will come offline and need to be decommissioned over the next few decades. The US Nuclear Regulatory Commission (NRC) mandates that the operators of these plants set money aside in segregated funds to finance decommissioning work. However, it is hard for external stakeholders to verify the cost estimations, which ultimately determine how much operators are required to save. In this paper, we develop a method to validate the existing cost models and calculate a contingency empirically for these models. We extend Reference Class Forecasting methods using adaptive kernel fitting and the Wilks' formula. Based on this method, and assuming a social tolerance for potential cost overruns of 20%, we calculate a new contingency of 48% of the estimated radiological decommissioning cost. After a "stress test" of the current decommissioning trust funds of operating reactor sites, we find that 48% of reactors we considered have sufficient funding-in many cases substantially more than required-and could therefore finance the potential scale of overrun. However, we find that 28 plants (52%) would fall short on average $211 million. Still, overruns at every plant are not a foregone conclusion because-while overruns are probable, based on past experience-the actual scale and frequency is not known. Nevertheless, our results add further evidence to the mounting call for the NRC to revise its cost models in light of new information.
    Keywords: nuclear power; decommissioning; cost estimation; contingency; Wilks' formula; reference class forecasting
    JEL: C13 K32 L50 L94 Q48
    Date: 2022–11–10
  54. By: Elie Kapengut; Bruce Mizrach
    Abstract: On September 15, 2022, the Ethereum network adopted a proof-of-stake (PoS) consensus mechanism. We study the impact on the network and competing platforms in a short event window around the Beacon chain merge. We find that the transition to PoS has reduced energy consumption by 99.98%. Miners have not transformed into validators, and total block reward income has fallen by 95.6%. The validator network's Herfindahl index is 1,159, 8.6% lower than the miners' prior to the merge. Ethereum supply growth has fallen nearly 95%. Transaction fees for Ether have nearly doubled and token transaction fees have increased 23.7%. The time between consecutive blocks is now steady at 12 seconds, a speed increase of 18.9%. Fewer transactions are being included in each block though, so the transactions per second have actually fallen by 58.2%. On Polygon, Matic fees rose 21.7% and token fees 31.7%. Polygon also slows, processing 12.7% fewer transactions per second. Solana's fees and speed are unaffected by the merge. Stablecoin transfer volumes rise on all three networks. Polygon has the largest gain for USD Coin, 230%, and the Mainnet the largest for Tether, 86%.
    Date: 2022–10
  55. By: Antonio Delre (European Commission - JRC); Maria Grazia La Placa (European Commission - JRC); Felice Alfieri (European Commission - JRC); Giorgia Faraca (European Commission - JRC); Malgorzata Agata Kowalska (European Commission - JRC); Candela Vidal Abarca Garrido (European Commission - JRC); Oliver Wolf (European Commission - JRC)
    Abstract: In the European Union (EU), sustainable consumption is promoted by the ‘Circular Economy Action Plan’. In particular, the voluntary scheme of the EU Green Public Procurement (EU GPP) provides guidance to reduce the environmental impacts of the public sector. To this end, the European Commission proposes EU GPP criteria for 20 product groups. The fitness for use of EU GPP criteria needs to be periodically assessed, because technological developments, changes in the regulatory and strategic context, and other factors could affect their suitability and effectiveness. For this reason, this report assesses the fitness for use of EU GPP criteria for four product groups: 1) electrical and electronic equipment used in the health care sector (Health Care EEE), 2) copying and graphic paper, 3) water-based heaters and 4) waste water infrastructure. The study was developed within an administrative arrangement between the Joint Research Centre (JRC) and the Directorate-General for Environment (DG ENV), which is responsible for the EU GPP policy. The performed desk research revealed that all the investigated sets of EU GPP criteria are not up to date. In particular, this is mainly due to: (a) the new regulatory and strategic context for Health Care EEE, water-based heaters and waste water infrastructure, (b) the introduction of new technologies for water-based heaters, (c) specific industry practices for copying and graphic paper, and (d) lack of references in the verification process for waste water infrastructure. The presence of no up-to-date criteria could negatively affect the uptake of the EU GPP policy.
    Keywords: Circular Economy Action Plan, CEAP, medical device, Green Deal, wood fibre, sustainable forest management, SFM, sewage sludge, emerging pollutants, energy efficiency, energy label, right to repair, waste electrical and electronic equipment, WEEE
    Date: 2022–01
  56. By: Puls, Thomas; Wendt, Jan
    Abstract: Im Jahr 2022 wurde der Verkehr in Deutschland von einem Energiepreisschock getroffen. Trotz Tankrabatt lagen die Zapfsäulenpreise für Diesel zwischen Mitte Mai und Ende August 2022 im Durchschnitt um 42 beziehungsweise 18 Prozent über den Werten des Vorjahres. Für das vorliegende Papier wurde für den genannten Zeitraum der Pkw-Verkehr auf den Autobahnen in Nordrhein-Westfalen erfasst, welche keinem dauerhaften Tempolimit unterlagen. Diese Daten wurden dann mit einem äquivalenten Datensatz aus dem Jahr 2021 verglichen. Auf diese Weise wird ein Verhaltensvergleich möglich, dessen Ergebnis stark von dem drastischen Anstieg der Kraftstoffpreise geprägt worden ist. Zusammengefasst lassen sich die vorliegenden Daten so interpretieren, dass es einander entgegenlaufende Effekte gab. Bedingt durch im Jahresvergleich höhere Präsenzanforderungen kam es zu mehr Pendlerverkehr auf den betrachteten Autobahnen. Gleichzeitig schrumpfte der Freizeitverkehr und die meisten Autofahrer gingen vom Gas, um Sprit zu sparen.
    JEL: R41 D12
    Date: 2022
  57. By: Bunn, Philip (Bank of England); Anayi, Lena (Bank of England); Bloom, Nicholas (Stanford University); Mizen, Paul (University of Nottingham); Thwaites, Gregory (University of Nottingham); Yotzov, Ivan (Bank of England)
    Abstract: We use data from a large panel survey of UK firms to analyze the economic drivers of price setting since the start of the Covid pandemic. Inflation responded asymmetrically to movements in demand. This helps to explain why inflation did not fall much during the negative initial pandemic demand shock. Energy prices and shortages of labor and materials account for most of the rise during the rebound. Inflation rates across firms have become more dispersed and skewed since the start of the pandemic. We find that average price inflation is positively correlated with the dispersion and skewness of the distribution. Finally, we also introduce a novel measure of subjective inflation uncertainty within firms and show how this has increased during the pandemic, continuing to rise in 2022 even as sales uncertainty dropped back.
    Keywords: Inflation; Covid-19; uncertainty
    JEL: C83 D22 D84 E31
    Date: 2022–08–19
  58. By: Laurence M. Ball; Daniel Leigh; Prachi Mishra
    Abstract: This paper analyzes the dramatic rise in U.S. inflation since 2020, which we decompose into a rise in core inflation as measured by the weighted median inflation rate and deviations of headline inflation from core. We explain the rise in core with two factors, the tightening of the labor market as captured by the ratio of job vacancies to unemployment, and the pass-through into core from past shocks to headline inflation. The headline shocks themselves are explained largely by increases in energy prices and by supply chain problems as captured by backlogs of orders for goods and services. Looking forward, we simulate the future path of inflation for alternative paths of the unemployment rate, focusing on the projections of Federal Reserve policymakers in which unemployment rises only modestly to 4.4 percent. We find that this unemployment path returns inflation to near the Fed’s target only under optimistic assumptions about both inflation expectations and the Beveridge curve relating the unemployment and vacancy rates. Under less benign assumptions about these factors, the inflation rate remains well above target unless unemployment rises by more than the Fed projects.
    JEL: E31
    Date: 2022–10

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