nep-ene New Economics Papers
on Energy Economics
Issue of 2023‒09‒04
23 papers chosen by
Roger Fouquet, National University of Singapore

  1. The political economics of green transitions By Besley, Timothy; Persson, Torsten
  2. Energy supply shocks’ nonlinearities on output and prices By De Santis, Roberto A.; Tornese, Tommaso
  3. The fiscal implications of stringent climate policy By Richard S. J. Tol
  4. Corporate carbon reporting: Improving transparency and accountability By Comello, Stephen; Reichelstein, Julia; Reichelstein, Stefan
  5. Fiscal Policy in Oil and Gas-Exporting Economies: Good Times, Bad Times and Ugly Times By Olivier Durand-Lasserve; Fatih Karanfil
  6. Determinants of climate change perception and behaviour of European households By Horbach, Jens
  7. The effect of cap and trade policy on the economy, welfare and renewable energy for the Moroccan case: a partial equilibrium approach By Mohamed Adib Ed-daoudi; Kenza Oubejja
  8. Regional vulnerability to the green transition By Rodríguez-Pose, Andrés; Bartalucci, Federico
  9. How do South-South and North-South FDI affect energy intensity in developing countries? By Herzer, Dierk; Schmelmer, Niklas
  10. An investigation of auctions in the Regional Greenhouse Gas Initiative By Khezr, Peyman; Pourkhanali, Armin
  11. Emission regulation. Prices, quantities and hybrids with endogenous technology choice By Halvor Briseid Storrøsten
  12. Iceland: Financial Sector Assessment Program-Technical Note on Management and Supervision of Climate-Related Financial Risks in the Banking Sector By International Monetary Fund
  13. Examples of shifting development pathways: lessons on how to enable broader, deeper, and faster climate action By Harald Winkler; Franck Lecocq; Hans Lofgren; Maria Virginia Vilariño; Sivan Kartha; Joana Portugal-Pereira
  14. Deep Policy Gradient Methods in Commodity Markets By Jonas Hanetho
  15. Whom to Inform about Prices? Evidence from the German Fuel Market By Felix Montag; Alina Sagimuldina; Christoph Winter
  16. Unpacking the green box: Determinants of Environmental Policy Stringency in European countries By Donatella Gatti; Gaye-Del Lo; Francisco Serranito
  18. A Common Shock Model for multidimensional electricity intraday price modelling with application to battery valuation By Thomas Deschatre; Xavier Warin
  19. Imperfect Price Information, Market Power, and Tax Pass-Through By Felix Montag; Robin Mamrak; Alina Sagimuldina; Monika Schnitzer
  20. Stock Market Bubbles and the Realized Volatility of Oil Price Returns By Rangan Gupta; Chien-Chiang Lee; Joshua Nielsen; Christian Pierdzioch
  21. "Balancing Growth and Green: Strategies for Sustainable Development in Developing Economies" By Yeboah, Samuel
  22. Briefing note: A dynamic model of disposable income impacts on mental health By Lomax, Nik; Clay, Robert; Archer, Luke; Rice, Hugh Patrick; Heppenstall, Alison
  23. When Climate Meets Real Estate: A Survey of the Literature By Justin Contat; Caroline Hopkins; Luis Mejia; Matthew Suandi

  1. By: Besley, Timothy; Persson, Torsten
    Abstract: Reducing the emissions of greenhouse gases may be almost impossible without a green transition—a substantial transformation of consumption and production patterns. To study such transitions, we propose a dynamic model, which differs in two ways from the common approach in economics. First, consumption patterns reflect not just changing prices and taxes, but changing values. Transitions of values and technologies create a dynamic complementarity that can help or hinder a green transition. Second, and unlike fictitious social planners, policymakers in democratic societies cannot commit to future policy paths, as they are subject to regular elections. We show that market failures and government failures can interact so as to prevent a welfare-increasing green transition from materializing, or make an ongoing green transition too slow.
    Keywords: 693402; 2015-00253
    JEL: D71 D72 D91 Q58
    Date: 2023–08–01
  2. By: De Santis, Roberto A.; Tornese, Tommaso
    Abstract: We use a Bayesian Threshold Vector Autoregression model identified through sign and narrative restrictions to uncover non-linearities in the propagation of energy supply shocks. We find that the transmission of energy supply shocks on consumer prices is stronger in high-inflation regimes, supporting state-dependent models. The faster pass-thorough of energy supply shocks to consumer prices (excl. energy) cushions the drop in output in the short term. Energy supply shocks have a stronger impact on output in the medium-term with manufacturing being more adversely affected than GDP. Large energy supply shocks shift the economy to another state but after two and half years the mean-reversion to lower inflation implies a more moderate transmission mechanism, highlighting the importance of state-dependent impulse responses. The energy supply shocks between July 2021 and June 2022 are massive amounting to 3.9 standard deviations on average each month. JEL Classification: C32, E32
    Keywords: Business cycles, energy shocks, narrative identification, non-linearities, TVAR
    Date: 2023–07
  3. By: Richard S. J. Tol
    Abstract: Stringent climate policy compatible with the targets of the 2015 Paris Agreement would pose a substantial fiscal challenge. Reducing carbon dioxide emissions by 95% or more by 2050 would raise 7% (1-17%) of GDP in carbon tax revenue, half of current, global tax revenue. Revenues are relatively larger in poorer regions. Subsidies for carbon dioxide sequestration would amount to 6.6% (0.3-7.1%) of GDP. These numbers are conservative as they were estimated using models that assume first-best climate policy implementation and ignore the costs of raising revenue. The fiscal challenge rapidly shrinks if emission targets are relaxed.
    Date: 2023–07
  4. By: Comello, Stephen; Reichelstein, Julia; Reichelstein, Stefan
    Abstract: Numerous multinational firms have recently pledged to reduce their greenhouse gas emissions to a net-zero position by the year 2050. These pledges currently lack a unified measurement and reporting structure, leaving the public unsure about the extent of the corporate commitments. Here, we propose a Time-Consistent Corporate Carbon Reporting (TCCR) standard that entails an initial forecast of a firm's future carbon emissions trajectory, periodic revisions of the earlier forecasts, and updates on emissions reductions actually achieved at different points in time. The TCCR standard is applicable to alternative carbon footprint metrics, including a company's direct emissions, carbon emissions in goods sold, or the carbon footprint assessed for individual sales products. Companies adopting the TCCR standard will provide added transparency and accountability for their carbon disclosures.
    Keywords: Carbon emissions, Net-zero pledges, Accountability
    JEL: M41 Q53 Q54
    Date: 2023
  5. By: Olivier Durand-Lasserve; Fatih Karanfil (King Abdullah Petroleum Studies and Research Center)
    Abstract: Revenues from oil and gas exports represent an important source of government budgets in some emerging countries. At the same time, these revenues fluctuate considerably due to changing global economic conditions and energy prices. Economic theory prescribes that governments should try to stabilize their economies by saving windfall oil and gas revenues and spending them in periods of price downturns. However, oil- and gas-exporting countries often run procyclical policies, that is, they increase spending during windfall periods and reduce it in the event of a shortfall, which may result in severe recessions. Understanding what drives the response of fiscal policy to oil and gas revenue shocks is important as it helps to explain what makes the economies of commodity exporters more or less vulnerable to commodity price shocks, and how they can adjust to price volatility and to the long-term energy transition.
    Date: 2023–04–07
  6. By: Horbach, Jens
    Abstract: The success of climate change measures is highly dependent on household behaviour as one of the most important emission sources of carbon dioxide. Private heating, electricity consumption or private transport are important key levers to reduce households' impacts on climate change. The paper analyses the determinants of climate change related attitudes and activities based on econometric estimations of European survey data. The results show that personal factors such as female gender, qualification and a high income are positively correlated to green behaviour. Persons having difficulties to pay their bills show a lower probability of buying local, climatefriendly products, but a bad economic situation is not a barrier for green attitudes. The results for the political orientation show that politically left and middle oriented persons are more likely for supporting climate change related actions.
    Keywords: Climate change, green household behaviour, European data, multivariate probit model
    JEL: C25 D12 D91 Q01
    Date: 2023
  7. By: Mohamed Adib Ed-daoudi (University Mohamed 5 of Rabat); Kenza Oubejja (University Mohamed 5 of Rabat)
    Abstract: In this paper, we are interested in cap-and-trade policy, or the implementation of pollution permits, as a mean to decrease CO2 emissions, which is the main cause of global warming, for the case of Morocco. To do so, we used a partial equilibrium model for the cereals market and the energy sector by simulating three scenarios of total emissions caps, namely a 1% decrease in emissions, a 5% decrease and a 7.5% decrease. We used this approach because we are concerned with one market, namely the cereals market and after designing the model wich is a system of equations capturing the interactions between fossil energy, renewable energy and cereals market, we log-linearized the model that we solved using matrix algebra with Octave. The results show that these forced emissions decreases have a very small effect on the decrease in income representing households welfare, remaining the same even in the 7.5% decrease scenario, as well as an increase in solar energy production and consumption. Therefore, a cap and trade system with a reasonnable cap will reduce emissions without affecting that much households welfare, while encouraging renewable energy production at the same time.
    Keywords: Emissions Partial equilibrium model Cereals market Energy Cap and trade Renewable energies, Emissions, Partial equilibrium model, Cereals market, Energy, Cap and trade, Renewable energies
    Date: 2023–08
  8. By: Rodríguez-Pose, Andrés (Cañada Blanch Centre and Department of Geography and Environment, London School of Economics); Bartalucci, Federico (Cañada Blanch Centre and Department of Geography and Environment, London School of Economics)
    Abstract: The impacts of climate change are unevenly distributed across territories. Less is known about the potential effects of climate policies aimed at mitigating the negative consequences of climate change, while transitioning economies towards low-carbon standards. This paper presents an analytical framework for identifying and assessing the regional impacts of the green transition. We develop a Regional Green Transition Vulnerability Index, a composite measure of the regional vulnerability of European regions to the socio- economic reconfigurations prompted by the green transition. The index brings to light strong regional variations in vulnerability, with less developed, peri-urban, and rural regions in Southern and Eastern Europe more exposed to the foreseeable changes brought about by the green transition. We also draw attention to the potential rise of pockets of growing ‘green’ discontent, especially if the green transition contributes, as is likely to be the case, to leaving already left-behind regions further behind.
    Keywords: Green transition, environment, left-behind regions, development trap, European Union
    JEL: O44 Q56 R11
    Date: 2023–07
  9. By: Herzer, Dierk; Schmelmer, Niklas
    Abstract: This study is the first to examine the impact of both FDI from developed to developing countries (North-South FDI) and FDI from developing to other developing countries (South-South FDI) on energy intensity in developing countries. It is also the first in the FDI-energy intensity literature to carefully control for the endogeneity of FDI using several IV techniques, as well as the first in this literature to use a panel Granger causality approach. Applying these methods to an unbalanced panel of up to 57 economies over the period 2009 to 2019, we find that South-South FDI contributes to reductions in energy intensity in developing countries. This finding holds even when we use panel cointegration methods. In contrast, we find across all our estimation methods no evidence that North-South FDI reduces energy intensity in developing countries. The obvious policy implication of these findings is that policy makers in developing countries should focus on attracting South-South FDI, rather than on attracting North-South FDI.
    Keywords: Energy intensity; developing countries; South-South FDI; North-South FDI
    JEL: F21 F23 O13 Q43
    Date: 2023–08–03
  10. By: Khezr, Peyman; Pourkhanali, Armin
    Abstract: The Regional Greenhouse Gas Initiative (RGGI), as the largest cap-and-trade system in the United States, employs quarterly auctions to distribute emissions permits to firms. This study examines firm behavior and auction performance from both theoretical and empirical perspectives. We utilize auction theory to offer theoretical insights regarding the optimal bidding behavior of firms participating in these auctions. Subsequently, we analyze data from the past 58 RGGI auctions to assess the relevant parameters, employing panel random effects and machine learning models. Our findings indicate that most significant policy changes within RGGI, such as the Cost Containment Reserve, positively impacted the auction clearing price. Furthermore, we identify critical parameters, including the number of bidders and the extent of their demand in the auction, demonstrating their influence on the auction clearing price. This paper presents valuable policy insights for all cap-and-trade systems that allocate permits through auctions, as we employ data from an established market to substantiate the efficacy of policies and the importance of specific parameters.
    Keywords: Emissions permit, auctions, uniform-price, RGGI
    JEL: C5 D21 Q5
    Date: 2023–04–24
  11. By: Halvor Briseid Storrøsten (Statistics Norway)
    Abstract: This paper examines the investment incentives of market-based regulation, with focus on the technology characteristics the different regulatory schemes tend to incentivize. The firms' technology choice is socially optimal if and only if the aggregate emission allowance supply is completely inelastic. Further, in the presence of uncertainty, elastic emission allowance supply and strictly convex environmental damage, it is optimal to tax investment in technologies that induce large variance in emissions. Last, price elastic supply of emission allowances may increase the volatility in the product market, depending on the risk environment the firms face. The results indicate that introduction of permit price stabilizing measures in an emission trading system will come at the cost of suboptimal technology investments. It may also cause increased fluctuations in product prices.
    Keywords: Regulation; technology choice; uncertainty; investment; welfare
    JEL: Q52 Q58 D81 H41
    Date: 2023–06
  12. By: International Monetary Fund
    Abstract: The Icelandic authorities are committed to addressing climate change issues and reaching ambitious objectives to reduce GHG emissions. Iceland is naturally exposed to significant natural hazards, such as volcanic eruptions and extreme weather conditions. The country is also exposed to physical risks resulting from climate change, such as sea acidification and melting glaciers (a long-term risk), as well as climate change transition risks, for instance, concerning the fisheries and transportation sectors. Still, Iceland can leverage its unique assets to overcome challenges of adapting to climate change. One asset is Iceland’s abundant domestically produced renewable energies that cover nearly all the country’s heat and electricity production needs. The 2020 Climate Action Plan and the 2021 Iceland’s Strategy on Adaptation to Climate Change include ambitious objectives toward GHG emissions’ neutrality.
    Date: 2023–07–28
  13. By: Harald Winkler (University of Cape Town); Franck Lecocq (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique); Hans Lofgren (Chercheur indépendant); Maria Virginia Vilariño; Sivan Kartha (Stockholm Environment Institute - Stockholm Environment Institute); Joana Portugal-Pereira (COPPE-UFRJ - Instituto Alberto Luiz Coimbra de Pós-Graduação e Pesquisa de Engenharia - UFRJ - Universidade Federal do Rio de Janeiro, IDMEC - Instituto de Engenharia Mecânica [Lisboa], ULISBOA - Universidade de Lisboa = University of Lisbon)
    Abstract: Abstract To respond to the climate crisis, we need to accelerate system transformations at a pace, scale, and breadth not seen before. This means that it is urgent to shift development pathways towards net zero greenhouse gas emissions, even while progressing towards other sustainable development objectives. This paper argues that accelerated mitigation can not only benefit from policies that are outside the domain of conventional emission-focused mitigation policies but require such policies. We refer to this process as shifting development pathways towards sustainability . Here, we explore what enabling conditions make such shifts possible. We develop a framework to select examples of shifts — in realms such as educational access, housing access, fiscal arrangements, and institutional reform. We analyse them against key enablers. Our findings suggest that countries could learn from what has worked elsewhere, though context matters. Some enablers are more widely applicable, including finance, long-term vision, and focus on sustainable development objectives. Multiple enablers, integrated policy packages, and involvement of a broad range of actors help achieve multiple objectives. Some enablers may yield results in the near term, while others take time to yield results. Based on our analysis, we suggest that climate mitigation requires an "all of economy, all of society" approach. Graphical Abstract
    Keywords: Shifting development pathways towards sustainability, Enabling conditions, Sustainable development, Mitigation, Policy packages, Decarbonisation
    Date: 2022
  14. By: Jonas Hanetho
    Abstract: The energy transition has increased the reliance on intermittent energy sources, destabilizing energy markets and causing unprecedented volatility, culminating in the global energy crisis of 2021. In addition to harming producers and consumers, volatile energy markets may jeopardize vital decarbonization efforts. Traders play an important role in stabilizing markets by providing liquidity and reducing volatility. Several mathematical and statistical models have been proposed for forecasting future returns. However, developing such models is non-trivial due to financial markets' low signal-to-noise ratios and nonstationary dynamics. This thesis investigates the effectiveness of deep reinforcement learning methods in commodities trading. It formalizes the commodities trading problem as a continuing discrete-time stochastic dynamical system. This system employs a novel time-discretization scheme that is reactive and adaptive to market volatility, providing better statistical properties for the sub-sampled financial time series. Two policy gradient algorithms, an actor-based and an actor-critic-based, are proposed for optimizing a transaction-cost- and risk-sensitive trading agent. The agent maps historical price observations to market positions through parametric function approximators utilizing deep neural network architectures, specifically CNNs and LSTMs. On average, the deep reinforcement learning models produce an 83 percent higher Sharpe ratio than the buy-and-hold baseline when backtested on front-month natural gas futures from 2017 to 2022. The backtests demonstrate that the risk tolerance of the deep reinforcement learning agents can be adjusted using a risk-sensitivity term. The actor-based policy gradient algorithm performs significantly better than the actor-critic-based algorithm, and the CNN-based models perform slightly better than those based on the LSTM.
    Date: 2023–06
  15. By: Felix Montag (Tuck School at Dartmouth College); Alina Sagimuldina (LMU Munich); Christoph Winter (EY-Parthenon)
    Abstract: Combining a theoretical model of imperfect information with empirical evidence, we show how the effect of providing price information to consumers depends on how well informed they are beforehand. Theoretically, an increase in consumer information decreases prices more, the fewer ex ante informed consumers there are. Empirically, we study mandatory price disclosure in the German fuel market for two fuel types that differ in ex ante consumer information. The decline in prices is stronger when there are fewer ex ante informed consumers. The magnitude of the treatment effect declines over time but is intensified by local follow-on information campaigns.
    Keywords: mandatory price disclosure; consumer information; retail fuel market;
    JEL: D83 L41
    Date: 2023–08–09
  16. By: Donatella Gatti (University Sorbonne Paris Nord, CEPN UMR-CNRS 7234); Gaye-Del Lo (University Sorbonne Paris Nord, CEPN UMR-CNRS 7234); Francisco Serranito (University Paris Nanterre, EconomiX UMR-CNRS 7235)
    Abstract: This paper identifies the determinants of OECD Environmental Policy Stringency (EPS) index using a panel of 21 European countries for the period 2009-2019. If there is a large literature on the macroeconomic, political, and social determinants of EPS, the people’s attitudes or preferences toward environmental policies is still burgeoning. Thus, the main goal of this paper is to estimate the effects of people’s awareness regarding environmental issues on the EPS indicator. Due to the endogeneity of preferences, we have applied an instrumental variable framework to estimate our empirical model. Our most important result is to show that individual environmental preferences have a positive and significant effect on the level of EPS indicator : on average, a rise in individual preferences of 10% in a country will increase its EPS indicator by 2.30%. Our results have important policy implications.
    Keywords: Environmental policy stringency, Environmental attitudes/concerns, Inequality, Environmental Kuznets curve, EU
    JEL: Q0 Q1 Q3 Q50 Q54 Q56
    Date: 2023–08
  17. By: Nabil EL MAJDOUB (FSJES - Faculté des Sciences Juridiques, Economique et Sociales de Mohammedia - UH2MC - Université Hassan II [Casablanca])
    Abstract: The COVID-19 pandemic has fostered a collective awareness of the environmental issue and accelerated a sustainable investment trend that has been established for several years. Considered as one of the financial instruments that can play an important role in financing the transition to a sustainable and climate-friendly economy, the Green Bond market has shown strong resilience to the COVID-19 crisis reaching record levels of issuances. This article discusses the evolution of the Green Bond market with a focus on the case of Morocco, a country heavily involved in a development process that promotes a balance between environmental, economic and social aspects.
    Abstract: La pandémie de la COVID-19, qui a terrassé l'économie mondiale, a favorisé une prise de conscience collective de la question environnementale et accéléré une tendance à l'investissement durable déjà bien ancrée depuis plusieurs années. Le marché des Green Bonds, considérés comme l'un des instruments financiers pouvant jouer un rôle important dans le financement de la transition vers une économie durable et respectueuse du climat, a démontré une forte résilience face à la crise de la COVID-19 atteignant des niveaux records d'émissions. Le présent article traite l'évolution du marché des Green Bonds avec un focus sur le cas du Maroc, pays fortement impliqué dans un processus de développement qui favorise un équilibre entre les aspects environnementaux, économiques et sociaux.
    Keywords: Green Bond, COVID-19, Morocco, Maroc
    Date: 2023–07–29
  18. By: Thomas Deschatre; Xavier Warin
    Abstract: In this paper, we propose a multidimensional statistical model of intraday electricity prices at the scale of the trading session, which allows all products to be simulated simultaneously. This model, based on Poisson measures and inspired by the Common Shock Poisson Model, reproduces the Samuelson effect (intensity and volatility increases as time to maturity decreases). It also reproduces the price correlation structure, highlighted here in the data, which decreases as two maturities move apart. This model has only three parameters that can be estimated using a moment method that we propose here. We demonstrate the usefulness of the model on a case of storage valuation by dynamic programming over a trading session.
    Date: 2023–07
  19. By: Felix Montag (Tuck School at Dartmouth College); Robin Mamrak (LMU Munich); Alina Sagimuldina (LMU Munich); Monika Schnitzer (LMU Munich)
    Abstract: Pass-through determines how consumers respond to taxes. We investigate the impact of imperfect price information on pass-through of commodity taxes. Our theoretical model predicts that the pass-through rate increases with the share of well-informed consumers. Pass-through is higher for the minimum price, paid by well-informed consumers, than for the average price, paid by uninformed consumers. Moreover, pass-through to the average price is non-monotonic with respect to the number of sellers. An empirical analysis of multiple recent tax changes in the German and French retail fuel markets confirms our theoretical predictions. Our results have implications for tax policy and shed light on the relative effectiveness of Pigouvian taxes versus regulation.
    Keywords: pass-through ; taxes; imperfect information; competition;
    Date: 2023–08–09
  20. By: Rangan Gupta (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa); Chien-Chiang Lee (School of Economics and Management, Nanchang University, Nanchang, China); Joshua Nielsen (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa); Christian Pierdzioch (Department of Economics, Helmut Schmidt University, Holstenhofweg 85, P.O.B. 700822, 22008 Hamburg, Germany)
    Abstract: Using monthly data for the G7 countries from 1973 to 2020, we study whether stock market bubbles help to forecast out-of-sample the realized volatility of oil price returns. We use the Multi-Scale Log-Periodic Power Law Singularity Confidence Indicator (MS-LPPLS-CI) approach to identify both positive and negative bubbles in the short-, medium, and long-term. First, we successfully detect major crashes and rallies using the MS-LPPLS-CIs. Having established the relevance of the bubbles indicators, and given the large number of them, we use widelystudied shrinkage (Lasso, elastic net, ridge regression) approaches to estimate our forecasting models. We find that stock market bubbles have predictive value for realized volatility at a short to intermediate forecast horizon. The number of bubble predictors included in the penalized forecasting models tend to increase in the forecast horizon. We obtain our main finding for the various types of stock market bubbles, and for good and bad realized volatilities.
    Keywords: Realized volatility, Oil price, Stock market bubbles, Forecasting, Shrinkage estimators
    JEL: C22 C53 G15 Q02
    Date: 2023–08
  21. By: Yeboah, Samuel
    Abstract: In this systematic review, the intricate relationship between growth and sustainability in developing economies is explored, focusing on Sustainable Development Goal 8 (Decent Work and Economic Growth). The research aims to identify strategies that foster economic growth while promoting responsible consumption and production practices, contributing to a more sustainable future for these nations. By conducting a comprehensive literature search using various databases and keywords, relevant studies meeting the inclusion criteria were selected. Through meticulous data extraction, key insights were gathered to analyse the challenges and opportunities faced by developing economies in achieving a balance between economic prosperity and environmental preservation. The findings shed light on a range of sustainable growth strategies, including those promoting decent work opportunities and social welfare while ensuring environmental sustainability. Successful cases of responsible consumption and production practices are also examined, demonstrating the potential for sustainable development. The implications of this systematic review are vital for policymakers, researchers, and stakeholders. Understanding the interconnectedness of growth and sustainability enables decision-makers to devise informed policies and initiatives, guiding developing economies towards green and inclusive pathways of development. This review emphasizes the urgency of achieving SDG 8 and underscores the critical role of developing economies in global sustainability efforts.
    Keywords: Sustainable development, economic growth, sustainability, developing economies, responsible consumption, production practices, SDG 8, green pathways, environmental preservation, social welfare.
    JEL: O10 O20 O44 Q56
    Date: 2023–04–18
  22. By: Lomax, Nik; Clay, Robert; Archer, Luke; Rice, Hugh Patrick (University of Leeds); Heppenstall, Alison
    Abstract: This note provides an overview of the provisional results from a dynamic microsimulation model called MINOS which assesses the impact on an individual's mental health (measured as SF-12 Mental Component Score) that result because of changes to household disposable income. There are five pathways that link household disposable income to mental heath (housing quality, neighbourhood safety, nutritional quality, tobacco use, and loneliness). We estimate change in SF-12 under three different scenarios: an uplift to the living wage for low earning employees; an uplift to child benefit, applied universally as £25 per child translated to household disposable income; and the impact that the new energy price `cap' will have on household disposable income. As well as the change in SF-12 MCS at the whole population level, we present the change in the sub-populations impacted by each policy experiment and assess the spatial distribution of each policy in the city of Glasgow, Scotland. We find that raising disposable income through the living wage and child benefit uplift scenarios have a modest positive impact on overall mental health and a larger impact in the intervention groups. The impact of increased energy prices has the effect of reducing household disposable income, and so has a negative impact on overall mental health. This note represents work in progress: further detailed methodology, reproducible code and latest results can be accessed via the project github page at
    Date: 2023–07–25
  23. By: Justin Contat (Federal Housing Finance Agency); Caroline Hopkins (Federal Housing Finance Agency); Luis Mejia (Federal Housing Finance Agency); Matthew Suandi (Federal Housing Finance Agency)
    Abstract: In this paper, we survey a growing body of academic research at the intersection of climate risks, housing, and mortgage markets, with a focus on the United States. With near unanimity, climate scientists project disasters to increase in frequency, severity, and geographic scope over the next century. While natural hazards, such as hurricanes, riverine flooding, and wildfires have historically posed risks to regional housing markets, the systemic risk that climate change may pose to housing and mortgage markets is of increasing concern. To understand the components of systemic climate risk, we survey existing work relating physical and transition risks to mortgage and housing markets, including both single-family and multifamily segments. Our review of physical risks addresses price, loan performance, and migratory effects stemming from flooding, wildfires, and sea level rise. In surveying transition risks, we discuss papers on energy use and decarbonization as they relate to real estate. Where possible, we explain how these topics may intersect with housing affordability and sustainability, especially for historically disadvantaged communities. We conclude by drawing attention to critical areas for research into flood and other climate-related perils likely to pose significant challenges for real estate in the coming century.
    Keywords: climate change, hazard risk, sustainability, affordability
    JEL: C5 E3 R1 R3

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